How Much Could You Make?

One of the most frequent questions I hear is “How do I find out how much I should be making?” Many people feel that they are underpaid or say they KNOW they are underpaid. However, they have no empirical data to support their claim. Many times it is based on what they have heard in the office.

First of all, discussing salaries in the office is really not professional. Your salary should be well guarded and there are many reasons why. I will write about that some other time so I do not end up on the other end of a tangent. Secondly, the boasting about that goes on within the cubicles is highly unreliable.

So how do you find out what you are worth in the marketplace?

Salaries are somewhat subjective. You can be overpaid by one company and underpaid by another in the same region, doing the same thing. The issue is not with your performance, but with what the company uses as guides for salaries. Most reputable companies will subscribe to services that give them concrete salary ranges to use. These subscription services are good and represent well researched data. They also report salaries in ranges.

For example:

Low: $55,000
Median: 72,000
High: 90,000

Most companies do not want to bring someone in any high than what is called midpoint (or median in this example). If a company always brought someone in higher than midpoint they limit growth almost immediately. Sometimes experience may make a company lean more towards 30% of midpoint.

You cannot be dogmatic about using these ranges. If your skill set is strong in an area that is “hot”, you are going to tip on the upper end of the scale, or get bumped up a grade to get hired. Demand for certain skills always inflates salaries. But be careful! If you are in a hot market sector and have a skill that companies are paying good bucks for, your salary will not likely remain inflated over a longer period of time.

In the 90s, software developers were seeing on average 11 - 15% increases every year. Developers that interviewed well and had experience were courted like great college football players. Someone who started at $20,000 in 1990, could have been making $120,000 just ten years later. That certainly did not last. In 2001, there were few jobs and many overpaid developers. Salaries started to drop by 10, 20 and even 30 percent. In 2005, there is a bit of a rebound, but software developers are not seeing the kind of salaries and increases they saw ten years ago. Many of the jobs continue to be shipped overseas.

So where do you find out how much you are worth according to solid research?

salary.com - Good source for ranges by region and skill set.