San Francisco – A majority of workers in a recent survey say they plan to leave their jobs, with many citing low pay as the reason. But market data shows most are paid the going rate or more for their work, according to a survey by Salary.com.
Salary.com, a compensation software and data provider based in Needham, Mass., compiled results from 13,592 workers who received a questionnaire by e-mail in October and November. Sixty-five percent of those said they’re going to look for a new job in the next three months. Of those, 57 percent say it’s because they’re underpaid.
The company did additional analysis of 1,624 respondents who said they were underpaid, looking at their salaries and job titles. The analysis showed that 19 percent of that group are underpaid, while 17 percent appear to be overpaid and 34 percent were fairly compensated when compared with the firm’s market data on similar positions. The remaining 30 percent are probably overtitled, not underpaid, Salary.com said.
“The difference between what someone is paid and what they think they should be paid is based on differences in perception of value … and performance,” said Bill Coleman, senior vice president of compensation at Salary.com,
“Every company has people that say, ‘Why am I getting paid less than Bob?’ The reason is because the companies … actually value Bob’s contribution more,” Coleman said. “We all think our own performance is better than it really is.”
Salary.com bases its claim that workers are paid fairly on a comparison of what most companies pay for similar work.
“We have a database of the market values of thousands of jobs in different industries, different company sizes, different locations. We use that to help employers set their pay policies and pay people fairly,” Coleman said.
Still, Coleman conceded a worker’s perception of pay may have little to do with market averages and more to do with stagnating wages.
When Salary.com says people are overpaid, he said, “we’re talking relative to other people who are doing effectively the same job based on current pay practices.”
But nationwide, median-income earners saw hourly wages rise just 2.4 percent from 2003 through 2005, and low-income earners saw a rise of just 2.1 percent – and inflation ate away those gains, according to the Economic Policy Institute, a liberal economic think tank in Washington.
“Lack of salary increase does create the belief that you’re underpaid, or certainly that you could do better elsewhere,” Coleman said.
Then, “you find out you could get more money to go elsewhere, and that confirms people’s belief that they were underpaid,” Coleman said.
“The problem with that is often companies will slightly overpay to recruit you,” he said. “I’ll give you an extra 5 percent or 10 percent today, and then I’ll let your peers catch up to you.”
Another factor that contributes to workers’ sense that they’re underpaid: Their titles exceed their job functions, Coleman said.
“A massive misconception out there is people … assume that job titles are standardized,” he said. “‘If I have the title of manager of customer service, then that’s my job, and it doesn’t matter where I work, other people with that title will have the same job as me.’ That’s not true.”
For instance, a customer-service manager at a large department store has a different job than one who works at a small company with no other customer-service employees.
There are situations where people doing similar jobs at companies earn different incomes – hence, some workers’ gripes about “Bob earns more” – because some negotiated better salaries when they were hired, Coleman said.
“You can have a gap when people start, depending on their negotiation, but a well-managed organization will smooth those out quickly,” he said.
