I love what I do, but I just don’t earn enough. What do I do, Veronica?

In this situation a lot of advice in the old days was along the lines of developing the confidence and strategy to approach your boss for a pay rise. These days, things are a little more complicated than they used to be, so let’s talk remuneration basics.

Remuneration versus pay

Employers like to sell their job opportunities (and yes, they are selling their vacancies to you) by talking about remuneration packages. That is not just the salary that you earn, but all the extras like holidays, sick pay, parental arrangements, health care, life insurance, child care etc. etc. It’s the whole terms and conditions of your employment beyond just pay. Many people in America hold jobs they are not enthused about, but they stick with them because of the fantastic health care plan.

Employers like talking about packages rather than naked pay, because it is hard to judge the value of a package . I once got a really fascinating letter from my employer where they gave me an effective pay cut, and managed to describe it as a pay rise! Sounds weird, but they gave a small bump in basic pay and stopped bonuses I was entitled to which were worth more. Technically could be described as a pay rise, but was certainly not to my benefit. Watch out for this kind of thing.

So, look at your package – the most important elements are likely to be pay, hours, holidays and the most important perk – usually pensions, health care or childcare. Your employer may not offer anything beyond pay that is of much interest to you, so discount anything that you have but is of no value to you, such as life insurance if you are single. Which things do you value? Why? How are they of benefit to you? Put a monetary value on these perks if you can. For example, if you ran a private pension instead how much cash would you have to put into it? How much extra before tax would you have to earn to fund that?

A lot of employers have a menu of perks you can choose form according to your circumstances. Have you tweaked your package under any allowable rules recently? Take a look at what you are entitled to, and make sure you have maximised it.

Also check you are getting your paper benefits. Many people don’t take holidays they are entitled to, but that is essentially taking a pay cut. I know one family where both the parents were professors. They were not rich and did not love the pay, but they both got long summer holidays. When the kids were young, every year they could go to a broken-down home on an island with no water or electricity. They’d spend all summer together roaming round the countryside in a safe rural environment. Their daughter described her childhood as utterly idyllic. Her parents work gave her that and they didn’t buy it with money.

A lot of people (especially women) take part-time or flexible work that helps them more easily combine work with rearing a family. This is good for helping your overall stress levels, but it has a negative impact on pay.

So look at your wider benefits and note what you really like, and what you don’t. Mark your benefits out of 10. If there is a deep source of stress in there, look at that separately.

So, are you happy with your non-pay benefits? What was your score?

It’s all about the Money!

Now back to the big one – pay. These days pay is a lot more standardised. Most big companies have fixed scales or bands. If they have pay bands there is quite often an explicit HR policy to force most people onto the middle of the band, so they don’t have people who are relatively expensive (i.e. paid at the top of the band). Such policies may or may not be known by the employee.

First do some research and identify as much as you possibly can about how pay works in your organisation, and, if there are any HR policies in these areas, read and devour them. In larger organisations, and especially public sectors ones, you are likely to find out more – a lot of this stuff is usually on the HR website.

In many smaller organisations, this information is either harder to get or just missing. However, the good news is this: in the big, formal organisation you are likely to have less flexibility to do much about pay, or you are going to have to play a long game to up it. However, your way to doing this will probably be clearer, and more structured.

In small places where there may be no real pay structure at all, you will likely have a lot more flexibility and have more scope to simply negotiate with whoever has the power to up your pay, (you probably have a lot more direct access to them).

These are generalisations, and will not hold true everywhere – you need to research well.

Now, the second thing to do is take stock of the general economic condition of your organisation. If there are published accounts, stock market analyses or news stories – read them. If not, just have a look. Most companies have a freeze period at year end, or, if they are struggling to meet targets, when they want to cut costs. If there is a hiring freeze, travel freeze or training freeze, it is not the time to angle for more pay, but if it is a temporary end of year thing, the next quarter will be a good time.

Or does it reflect a long-term problem? One girl ended up in a very hard situation where her employer had a business which was slowly going under. They tried hard (and illegally) to make her working life such hell she would quit so they would not have to pay her off. Good for her; she held out and got the redundancy payout she deserved. The company folded shortly thereafter. How would you rate her odds of getting a pay raise if she had asked for one?

How does your pay compare to other workers at your age and stage? It can be very hard to compare your own pay to that of others in your own organisation, although it is easier if there are published pay bands as above. Often the organisation is required to publish how many workers in the aggregate are paid what against those bands.

There is also public information about average salaries in different industries and areas. Look online, or ask at your local library – who can be very helpful, especially if there is a specialist business section. What is the average salary for what you do? How does pay at your company and for you compare?

Finally just look up the average salary for the country you live in.

Having done all this research how do you feel about your pay now? Do you feel lucky? Satisfied? Horrified? Disappointed? Score your satisfaction 1 – 10. Do you need to take action?

So – you have looked at your benefits and your pay. If you score less than a 7 in either area, you might need to look at that area in more detail and see if you can take action. But what if you find that you are happy? Your salary is not insultingly low for what you do, your employer is not taking the mickey, you are not being exploited. The pay and benefits you receive, according to your research, are fair, and you enjoy your job. It’s all good, but you are still stressed about how little you are earning?

If this is the case, you need to look at the financial area of your life, not the work area. Are you stressed, because your work is lovely and the pay a fair reflection of what you do, but your work is not supporting your financial needs or goals? This is a very different problem.

Think of it like this – the reason we go through such a detailed process to hone in on the root cause of your stress is because we need to know where to take action and how. The problem gives us clues as to the solutions. If your pay is too low because you are motivated by reward and recognition you can look at other ways to fill that need. If your pay is too low because it compares badly to what others earn for the same tasks, then maybe you need to look at asking for a pay raise, or even moving to a more enlightened employer.

Let me know what you think – are you happy with your pay? Leave a comment below, and let me know. Until next time! Veronica x