“Am I earning what I deserve?” It’s the question every worker has asked herself at least once. How do you know you’re being paid fairly given your experience and what your peers are earning? You could ask around the office, but even in 2016, salary discussions are still a taboo topic around the water cooler.
Jobs marketplace Glassdoor.com has developed a new tool to help employees estimate their own job market value. The “Know Your Worth” tool is intended to help you cut through the fog, and get a pretty decent estimate of your true earning potential.
“[Know Your Worth] is all about empowering people to do their research and really know what their market value is,” Scott Dobroski, a spokesperson for Glassdoor, told MagnifyMoney. Dobroski said Glassdoor hopes the release of the tool will encourage employers to be more transparent with their employees about how their pay is determined.
How It Works
The “Know Your Worth” tool is free to use. The tool ask for five pieces of information: your title, employer, salary, location, and years of work experience. The tool then uses an algorithm to tell you the median base salary you could earn in your location — and, most important, whether you’re overpaid or underpaid and by how much.
The market value estimates are not perfect, and everyone will not be able to get a result from the tool, Glassdoor admits. The company relies on millions of pieces of data collected from Glassdoor users over the years, as well as its own proprietary research of supply and demand for jobs in a range of fields.
Who the Tool Is Best For
The tool has its limitations. So far, the Mill Valley, Calif.-based company says it has enough data to deliver results to roughly 55% to 60% of the U.S. workforce. However, the tool will “learn” more as more Glassdoor users continue to submit their salary and job information.
“An employee should not see [their results] and just go and ask for more money,” Dobroski said.
MagnifyMoney asked about a dozen workers in various cities across the U.S. to test-drive the beta version of the tool. The majority of workers, each of whom requested to remain anonymous, were able to get estimates successfully. Two workers were told the tool could not offer them a market value yet — one, a 23-year-old landscaper based in Atlanta, Ga., and the other, a 31-year-old hospital scheduling specialist in Onalaska, Wis.
One person who used the tool, a project supervisor working in New York, N.Y., said he was surprised by his results. Based on his market value, the Glassdoor tool informed him he was underpaid by 3.3%.
“I thought I was overpaid,” said the worker. Another worker, an entry-level sales representative in Buckhead, Ga., said he was surprised by his results as well. The tool alerted him that he was underpaid by 7.2%. He balked.
“I know what my peers make because we all graduated with the same degrees and went into sales with different companies,” said the worker, 24. “My base [salary] is the highest among the people I know.”
People with more straightforward and common job titles in more densely populated cities might have an easier time getting accurate results.
“I would definitely use this tool before my next interview,” said Jazmine Calhoun, a 24-year-old freelance writer based in Atlanta. “It was an effective tool for the millennial just starting to enter the workforce without knowledge of their true value.”
As the tool gathers new data, it will update your market value on a weekly basis. Your market value is also plotted on a 12-month chart. Logically, it should go up as time goes on and you gain more job experience, but shifts in supply and demand for your given field could also alter your market value.
You can also compare your “worth” to the median pay that others receive for doing similar work in your area.
Pros and Cons
Who doesn’t like free things? To top that, no cost makes the tool a good fit for a cash-strapped individual looking for a simple way to get a rough estimate of their market value.
You can use the tool to weigh potential job offers
One of the tricky parts about salary negotiations is knowing how much or how little to ask for. If you have multiple offers, you might be able to use the Glassdoor tool to find out if one job’s offer is on par with what people in your field and at your experience level are currently earning. If it’s way low, you might want to ask for more or at least do more research.
You can apply directly to better-paying jobs
The results page presents you with the salaries and links to apply for jobs with similar titles in your location, or for jobs that might be a common next move for those in your field. That could be helpful if you’re thinking of making a career shift soon.
A 21-year-old assistant media planner at an advertising agency in New York discovered she was underpaid by 24%, but wasn’t surprised. “I was warned of my company’s low salary rates, but I was striving to get my foot in the industry door,” she said.
Missing about 40%-45% of occupations
As we mentioned, at this time the tool can only give an estimated market value for about 55% to 60% of the U.S. workforce. If the tool can’t give you your market value, try using Glassdoor’s salary explorer instead. This tool lets you play with a variety of pay factors and other types of jobs in the market.
Doesn’t factor in compensations or other benefits
All of the other things that go into a person’s pay such as bonus compensations or benefits aren’t considered in the calculation, so the base pay may not be reflective of the total compensation a worker gets. Perhaps you are underpaid on your base salary, but you are given generous benefits like a 401(k) match, 100% employer-paid health care, or several months’ paid maternity and paternity leave. Those benefits have true monetary value that can add to your base salary.
Glassdoor says as the learning algorithm gets smarter it plans to add variables like benefits to the model.
No cost of living comparison
There’s a feature on the bottom of the results page that lets you tinker with your inputs to see what you would be paid if you lived in another city, or had more job experience, etc. It gives you a base pay estimate, but doesn’t reflect the city’s cost of living to give an idea of whether or not your lifestyle would change if you moved. For now, you can use PayScale’s Cost of Living Calculator to get around that.
The tool is a great starting point for those who are looking to negotiate their pay or who are on the job hunt currently. But it shouldn’t be the only factor you consider before you decide to ask for more pay or switch jobs. Ask colleagues or mentors for guidance about how much you should expect to earn. Also, ask your employer or human resources department for information about how raises and promotions typically work, ideally before you take the job. Some employers have more structured salary guidelines than others.
Ultimately, it’s up to you whether or not knowing that you are underpaid is enough motivation to ask for a raise or switch jobs. A lot of the time, that decision could depend on whether or not you like your job, as it did for a 22-year-old project manager working in Santa Monica, Calif. The tool said he was underpaid by 20%, but it wasn’t enough to scare him off. The company has been struggling financially, but he’s happy enough with his current job to stick around.
“I feel like I haven’t learned everything from this job just yet,” he said. “I have a lot to learn from all of the people that are above me in [management] positions that are like mine before I move on to the next thing.”
The post Here’s A Quick Way to Find Out if You’re Getting Paid Enough appeared first on MagnifyMoney.