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 Post subject: What to do when you know you are under-valued
PostPosted: Wed Jul 07, 2010 8:28 am 

Joined: Mon Mar 16, 2009 7:45 pm
Posts: 38
Hello everyone,

I am finding myself in a strange predicament these days, and am hoping to see if someone has gone through this before and what their experience was.

I currently work for a now growth-stage company, when I started, I was employee #11 and the company had just moved out of "the garage". We are now clocking about 50 employees, with a target of 150 by next year. When I started, I loved the environment, pay was ok, not great by any means, but not dead terrible either. I got myself some options that I've since converted to stock and that should yield me a few extra 10k when the company goes public or gets sold.
That being said, I know that I am undervalued for the work I do. I work in Pre-/Post- Sales Engineering, I've gotten promoted since I've been with this company, but the salary increase was modest at best for the added workload that has come to me. Furthermore, the company recently lost two of the four Sales Engineers to other companies.
I noticed some increased interest in my skill-set from outside recruiters lately, and have them had me convinced to attend some interviews over the next few weeks.
I like what I do now and still like the company overall, but from my research into what my position is valued at for my geographical area and my field, I am at about 60-70% of what I ought to be at, both for base and incentive compensation.

Has anyone else dealt with this before? I am debating if I should try to negotiate for a raise, or should just flat out go for trying to find a new job that would value me at market price. I know that raises have happened in the past, however, I doubt that I could negotiate an extra 30-40%.

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Wed Jul 07, 2010 9:54 am 

Joined: Fri Sep 12, 2008 12:29 pm
Posts: 1655
Location: Seattle, WA
Typically at a startup, part of the compensation is supposed to be in equity. You have a stake in the company; if it succeeds, you get a huge payoff; if it fails, you get nothing.

That said, it's not entirely inconceivable that you could get a huge raise. They might be more open to it given that they've lost half of your peers recently. It doesn't hurt to have a frank discussion with your boss (or whoever is in control of salaries), even just to get a feel for your chances of a huge raise and to ask what you'd need to do to get it.

On the other hand, I have a relative in the same situation and he's basically been told, there's no money or plan to give you a raise, because we are going to use the money to hire all these new people. It sucks but I guess that's how they roll. In that case you either have to live with it, or jump ship.

The conventional wisdom (that I've heard) is that switching jobs regularly is the only way to get continuing, large pay increases.

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Tue Jul 27, 2010 7:35 am 

Joined: Tue Jul 27, 2010 5:55 am
Posts: 4
I tend to agree with the post above - an honest, non threatening approach to the subject is entirely reasonable. Maybe you could raise the subject of feeling like you are undervalued and how it is affecting your motivation. Tell them you are committed to the success and growth of the company, but need to be paid what you believe yourself to be worth - and let them know you have done your homework in this regard and have had some interest from other companies...

Good luck..

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Tue Jul 27, 2010 8:40 am 

Joined: Mon Mar 16, 2009 7:45 pm
Posts: 38
Thank to both of you.

I am getting closer to having a competitive offer from another company, but I want to wait before I make any attempts to bring this up at my current company. I don't think I would fuss so much if I didn't know that where I work now, they are looking to hire some replacements for those folks that left and I know that their entry price is 40% over mine.
I will keep you posted on how this develops, it's both exciting and a little scary.

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Tue Jul 27, 2010 11:56 am 

Joined: Thu Nov 19, 2009 11:52 am
Posts: 114
Good luck! I agree; wait to see what happens, and if you ultimately get a job from another competitor, approach your boss and ask for a raise. You have nothing to lose. I agree with the poster upthread - your current company might be more agreable to giving you a raise. If they intend to triple the workforce, I think they can probably scrape together some cash and give you a raise.

Check out my blog! http://crimsonandclover.typepad.com

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Sat Oct 09, 2010 4:47 am 

Joined: Mon Mar 16, 2009 7:45 pm
Posts: 38
So, it's been a while since I've last posted here. I wanted to provide an update on my situation and maybe give others that are in my situation with some ideas.

Here is what happened since July. I got an offer from one of the companies I was interviewing with. It wasn't quite close enough to my desired target, but it was more than I was making at my current job. I was seriously considering the offer, even though it would have lengthened my commute by over an hour and put me into a higher cost area during work (major US city vs. suburbs). The biggest drawback of the new position was the significantly worse health benefits, non of my family's doctors where in their network and they didn't cover out of network expenses. We did contemplate to do COBRA, which apparently you can if you leave a job and your new job has worse benefits. But doing that, along with the added commute and expenses would have eaten all but the salary difference. I negotiated hard to get the offer raised up, citing my concerns about health coverage, but this company didn't budge. In the end, I politely declined their offer.
During the same week, I had a meeting with my recently appointed director, laying out my dissatisfaction with my current compensation. He didn't know until I told him how little I was making and agreed to propose a major boost to the C-level of the company. This is all back in August.
I've gotten word yesterday that my base will get a boost of about 25% starting January, and my variable compensation target will go up by 60%-100% from what it is now, depending on what the board decides for next year.
In addition to that, my current company is also moving its offices to within a mile of my home, which will make commuting a non issue since I'll be walking/biking to work soon.
This new deal still doesn't quite bring me to the same level as what's customary for my field, however, it at least sets the right tone and I am satisfied with the outcome.
What I learned from this is that there is nothing wrong with asking, but be prepared with arguments on why you deserve more than you get right now (in my case, it helped that I've been an integral part of how the company delivers product). Also, sometimes patience pays off in the form of a nearly eliminated commute (I will still travel quite a bit for work, so we can't part with having two cars).

I hope my story can help others and serve as encouragement, even in a down economy, one can successfully negotiate raises.

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 Post subject: Re: What to do when you know you are under-valued
PostPosted: Tue Nov 09, 2010 10:38 am 

Joined: Fri Oct 29, 2010 7:55 am
Posts: 18
Location: Orange County, CA
Great thread... salary adjustment is a really common problem that affects many of us. It's interesting to see the different ways people are approaching it. For my own personal situation... I chose to leave a job with a high-paying base salary and go to a startup with some potential for major bucks in an IPO. Base salary is *much* lower, but the biggest benefit that I've really enjoyed (and I don't feel I can put a price on) is the feeling of freedom that comes with the new job. I make my own hours, work from home when I want, and have a major say at anything that happens at the company.

My latest websites:

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