Dear Boss,
I was hired as an entry-level, salaried employee five years ago. After less than a year, a new position was created for me — not a promotion or lateral move but an entirely new position, one with a different expertise. The salary for my original position was average, and my salary adjustment when I was moved to the new position (one I wanted and helped create!) was a 22 percent increase. Had they paid me the average salary for the position, it would have been closer to a 100 percent increase. When I questioned the rationale behind the new salary and explained that the average for this position is significantly higher, I was told I had received “a significant raise” and could not be given a larger one.
If they had hired for the position from the outside rather than promoting me into it, there’s no way they would have offered the salary I was given for it. It’s a highly paid field and I’m making peanuts, comparatively. (That said, I have no interest in leaving my workplace; I intend to stay there for a very long time, and while the money isn’t everything, it is still something.)
I was later approached by a recruiter to take the same job at a competitor, where I would have been paid above the average for this kind of work. I turned it down because it was a toxic workplace, but I did use their offer to eke another 20 percent out of my employer. But still: I’m severely underpaid compared to what I could be paid anywhere else.
It seems that I’m being penalized, unintentional as it may be, because they hired from within, and they’re looking at the position shift I made as a step up the ladder, but my previous position would never lead to the one I’m now in; they’re completely unrelated! Any advice on how to navigate this in a way that doesn’t make me look like I’m ungrateful or making an absurd request to push my salary significantly higher? I just want to be paid fairly!
This is a thing some companies do — they put limits on the increase you can get when taking an internal promotion, even if that limit puts you well below the industry average for that role, and even if they had paid significantly more if they had hired from the outside. It’s ridiculous. The value of the work you’re doing isn’t less just because you used to have a different job there. It makes no sense that they’d pay an outside candidate, say, $90,000 to do the same work, but you’re only worth $60,000.
To be fair, in some cases what’s happening is that the person who’s promoted is getting a chance at a job that they wouldn’t have qualified for if they applied as an outside candidate. When that’s true, it’s not unreasonable for their salary to reflect that they’re coming in with less experience or expertise. But once they’ve demonstrated that they’re competently doing the role, they should be bumped to the full salary — and even before that, they should still be paid within the overall salary band for the job, not tens of thousands of dollars less. (And, really, if your work isn’t worth that, why are they hiring you?)
If you’re thinking this is a good way to ensure a company’s most promotable employees take jobs somewhere else since that’s the only way to get paid fairly: Yes, you’re right. Companies that do this are being strangely shortsighted. It’s illogical in another way, too: Internal candidates already know the organization and how it operates, unlike external candidates who will be learning the culture and players from scratch. Your history with the company should be an advantage, and yet this policy penalizes you for it.
Unfortunately, the reality is that companies with this kind of salary cap on internal moves are often incredibly rigid about it and may not budge. But you can certainly try making the case! Point out that the market rate for the work is significantly more than what you’re being paid, and that your salary is well below what you’d be offered for the same job at another company. Point out that they’d need to pay significantly more to rehire for the role from the outside. Say you’re happy with the job and want to stay, but that you need to be compensated fairly for the work you’re doing. Ask what their plan is for bringing you into the normal salary band for the role, and on what timeline. Push them to be specific on when it will happen … and get that in writing.
Ultimately, though, what often gets this kind of company to budge is a concrete threat of losing you, in the form of another job offer. I normally advise against using an outside offer to get a raise at your current job — because it can backfire in ways people don’t always anticipate — but in the situation you’re in, it may be the only way to get what you want. You should never use another job offer to bluff, because there’s always a chance your company will tell you it can’t match the other offer, and you should take it. But if nothing else has worked and you’re willing to walk away, this can be the way to go. (And for the record, it’s frustrating and nonsensical that this is the case! No sensible company should want good employees out there job searching just to get a salary bump, because some of those employees will discover they actually want to take the other job, and now the company has lost a talented person because it played games about money. It’s absurd.)
In any case, it sounds like you’re not there right now — you’re happy with the job and want to stay for a long time. That’s a fair call! There are lots of reasons people choose to stay in jobs beyond what they’re being paid. But at some point, you might want to exercise these options, and they are there when you do.
Order Alison Green’s book Ask a Manager: How to Navigate Clueless Colleagues, Lunch-Stealing Bosses, and the Rest of Your Life at Work here. Got a question for her? Email askaboss@nymag.com. Her advice column appears here every Tuesday.
