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Imagine finding out that someone with less experience than you—my subordinate, even—makes much more than you (to the tune of $40K), and on top of that, you were denied a raise. Would you stay with that company? Yeah, neither would I. Nearly 68% of hiring managers have threatened to quit over pay discrepancies with a new hire. A tech worker, Rich, posted a similar experience online and got the following advice.
1. Cost of Living
Someone mentioned that switching jobs in the tech sector always grants a raise to the worker, but when they stay with the same company, their raise is usually only up to the current cost of living. Companies that want better employee retention should revamp their raise policy.
2. Bad Business
One commenter wanted to know if business schools taught the value of labor retention. Keeping good, quality workers is much less expensive than hiring new trainees. Yes, the newbies earn less, but they also make more mistakes, and if you pay for their training, there’s another business expense.
3. Pension Pullers
I knew a guy who had spent nearly 25 years with a retail grocery chain. He was close to retirement, and the company fired him over a small mistake. Corporations will always look at their bottom line before considering the people they hurt. Money talks and walks to them, and you rarely find a different financial approach.
4. Who You Know
The worst business is the “who you know” type. This scenario happens when some severely unqualified person gets a manager or leadership position in a company simply because of who they know. One person shared that his company gave a manager’s job and a director’s salary to the son of the Chief Financial Officer’s (CFO) buddy. He got demoted twice and eventually fired. The financial sense and ethics of this CFO could have been better.
5. It’s a Set-up
One contributor mentioned that someone could have set Rich up expressly in this manner to make him leave. The contributor theorized that the newbie is likely doing her job alongside his and only making her salary. It’s a sad but all-too-realistic possibility.
6. Job Hop
Somebody mentioned that the more time you spend in the trade world, the more you get. But in corporate America, changing jobs may be the only way to make more money. Job hopping is one of those things they always tell you not to do, and now we know why.
7. Masters of Business
While an MBA might look good on paper, it’s unlikely to carry you anywhere suitable if you don’t have a head for business. Just because everyone else expects you to can people when profits start to dip doesn’t mean that’s the best route to take. However, calling yourself a master of anything sets you up for failure if you don’t know what you’re doing.
8. Fresh Meat
One of the reasons the subordinate’s massive salary so aggravated Rich was that she was right out of school and much less experienced. But there’s a reason companies like new starts. They don’t have to pay them nearly as much, although the fact that this young woman was starting at $40K more than Rich is a slap in the face.
9. Subject Matter Expert
Good experience is an excellent way to earn a worthy raise, but being a subject matter expert should make you a shoo-in for more than just that measly 3%. Subject matter experts are what they sound like — experts. They’re not playing games or trying to guess the correct answer regarding their field of knowledge; they’re giving it to you straight, and for that, you should quickly and readily compensate them for their time and what they bring to your company. The fact that Rich was underpaid for his expertise is sad for his former employer.
10. Overlooked and Underpaid
Unfortunately, Rich’s situation is not rare. It’s an all-too-common experience, especially in America, where the bigger a company becomes, the less and less they worry about their employees. Their bottom line makes the decisions, and they fire good people, great workers, to salvage their profit margin.
