Underpaid in Strategy
Currently 1.5 years into my first job out of school at a midsize tech company that is still growing incredibly fast ($2B+ revenue and ~50% yoy growth). I work in Corp strategy and am very pleased with the work I am doing, work life balance, and benefits, but know I’m underpaid ($55k base + 15% bonus in MCOL city). I should be getting promoted within the next few months. Org structure has changed a bit and a promotion would put me at the same level as two recent hires with top 20 MBAs.
I realize I won’t be making as much as them at the same level but realistically, how much should I be making in base salary? Will likely wait to start a small job search after the promotion.
what's your title now and what would the title be post promotion?
Associate to Analyst
Here's the thing - you're really not underpaid.
Associate salary of $55K base is competitive. Frankly, 15% bonus is a strong target for both Associates and Analysts. At some companies, nobody below manager receives a bonus, much less 15% target.
whoa.....$500/day is 125k/year. So you are making ~ $250/day if you work 8 hours a day, that's ~$32/hour. That's 2 people making minimum wage.
Be honest...are YOU worth more than that? (we don't know you...the answer might be yes or no...generally 1st year salaries outside of certain professions..investment banking...tech engineer...55k is pretty normal because most recent college grads don't start with skills that are immediately valuable to a firm..remember that a company expects to make at least double the total cost of every input..and an employee is an input cost...so salary + benefits x 2 is the minimum threshhold that a business is generally seeking)
You're worth what the market says you're worth. If OP can go get another job doing the same thing for $80k, then he/she is worth $80k. It's not necessarily about how much revenue you bring to the company, it's about how much they have to pay to keep someone with your skill set / experience / education.
while i agree that "worth" is what the market is willing to pay....the question to ask yourself is...can you make more elsewhere? Maybe the answer is "No" and well...there you go.
You aren't worth what someone is willing to pay.. you are worth the present value of your future free cash flows
I’d argue yes. I took the job despite the somewhat disappointing compensation because I expected to work on some of the most exciting and impactful projects at a fast growing company. I very much enjoy what I’ve been working on and have been the primary contributor to several of my team’s most important projects and a major contributor to a few more. My issue is not that I feel I’m underpaid. It is that I know I’m underpaid. I’m not yet ready to shop around for another offer but it is on my mind.
in that case, its ok to take lower $$ pay in exchange for valuable experience that you can leverage for more pay in the future, in the very early stage of your career. I might suggest a side hustle in the meantime, to make more $$ in the meantime. i hear SMMA for local city businesses is very popular...as is SEO
Not sure if you've had your performance review yet but that would be a good time to bring up your salary. If you feel strongly about your contribution to the team not matching your compensation, i'd suggest meeting with your manager.
The burden of proof will be on you, be prepared with a list of accomplishments and comparable salaries to prove your point.
I'm not sure if your group is part of acquisitions but in CD I am privy to all the pay bands due to the mapping and onboarding acquired employees, so I am able to get a sense of what compensation looks like within my org.
Anyways good luck, I know how frustrating this can be.
I mean you being underpaid is somewhat dependent on your hours in my opinion. If you're working 40 hour weeks making $55-60k out of school, you're doing better than most. Now if you're working 60-80 hour weeks, then yeah I'd be a bit bummed about the pay. However, like someone else mentioned, you're worth what company's are willing to pay for you.
Similar to what @BankerC159 mentioned, if you are able to get your hands on internal salary data, that would be very helpful from a negotiation standpoint. I was never able to see specific names of employees, but could see all the pay-grades and tenures by department, which I leveraged when negotiating raises. Also, agree with using your performance review as a time to discuss this.
If your promotion comes prior to any sort of formal review, I'd recommend not just accepting the number they put in front of you. Many people are less likely to negotiate salary during a promotion vs. starting a job and I think this causes people to leave a significant amount of money on the table.
Some HR functions are fairly strict on paying individuals based on years of experience vs. value add/competency which is unfortunate, but something you may come across.
Couple of things (just my opinion): -if you're working strat at a tech growing 50% and getting the experiences you're saying you are, I'd be hesitant to jump ship for an extra 20k a year. You dont become a millionaire when you're 23 -totally agree you should have comp conversation, but don't make your performance review the first time you bring this up. start dropping seeds and pulling your data together so that when you get to the review, and it goes well, those wheels are already in motion. You don't want to go into that conversation speaking up for the first time when they may already be backchanneling what your raise / promotion is---have more input than that -the fact that 2 ppl post top MBAs are taking those jobs similar to you should be an indicator you're in a nice spot -good luck
You're not underpaid. However, you don't mention any equity compensation. If the firm is a fast-growing startup, you should have some stock options. May be too late for that now, but when the time comes for promotion you might say you're willing to give up cash comp (i.e. no raise) if they'd issue you some options on the same terms the last executive hire got.
Note that options very often turn out to be worthless, as my own became in the dotcom crash.
Classic case of junior level people focusing on all the wrong things in their careers.
You're way too young to be focusing on comp - especially for on the margin differences. Experience should be at the forefront of your thought process.
Sounds like you're riding a rocket ship so just hold on tight and see where it goes. Odds are you'll be better served if things work out a few years from now than leaving for another firm that's less exciting to pick up some extra cash.
+1 and I'll build on this.
Compensation is a joke when you start your career. If you like your positioning within the firm, you're learning most days in the office and you can see how the CV you're building materializes at the end of the tunnel, I promise you that it's worth the 5 - 15K that you're theoretically "leaving on the table".
Personal story -- I was underpaid for the first four years of my career. It sucks for the ego when you look at the numbers that get posted on WSO and you're making below the industry average. But the job I had gave me literally 50% of my time to study, learn and build a CV. The projects and the level of autonomy I was afforded allowed me to craft the profile of the person who I wanted to be.
First Year -- 76K
Second Year -- 84K
Third Year -- 90K
Fourth Year -- 99K
New Job -- 250K++
Sacrifice short-term compensation for long-term career positioning. Surely, ask for raises. But that's not the big picture here.
Thanks for sharing your personal story and awesome to see that the hard work paid off (at least in terms of salary) with the new job.
Would you mind expanding on what you studied in your spare time and how that helped you build up your CV? Also, what kind of career move did you make to lead to the massive jump in salary? Overall, sounds like an awesome success story and enjoy hearing more about your experiences.
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