Do You Know Your Real Market Value? Are you underpaid?
What are your skills, experience and expertise worth in the current market? A question that’s not always easily answered in a constantly fluctuating market with countless variables coming into play. That said, knowing your Real Market Value (RMV) will help you not only get paid fairly, but have more leverage when negotiating a salary that may help land you your dream job, or get paid more at your current one. On one side, you don’t want to leave money on the table, but on the other you don’t want to look silly by over valuing yourself. Which can likely cost you the job all together.
Think of it this way. You are essentially an entrepreneur, and your employer is your client. Like any other business, you want to get paid as much as you’re worth. You do this by offering high-quality service and delivering it at a competitive price worthy of the value you’re providing. With that, you have to know what the going rate is for your service in your market so you aren’t underpaid.
The question is, how do you determine your Real Market Value?
In short, you need to understand how many job openings there are in your field versus how many potential candidates are available. For example, when looking for certain jobs where unemployment rate is low (tech jobs), your value will be higher. On the other hand, this also gives you room for negotiating power at your current job, so you aren’t underpaid.
Here are a few ways you can determine your RMV…
Know Salary Expectations For Similar Jobs In Your Area:
You likely already know this, but what your skills are worth in California will be different than what they’re worth in Missouri. Why? The cost of living fluctuates from state to state, which in turn fluctuates salaries. In the end, it all evens out when you factor in higher house prices, food, gas, etc. in some states versus others. So do your research, and learn the differences.
Know Your Replacement Cost.
If you’re currently at a job you love, this is critical when negotiating salary. It can cost upwards of $25,000 (recruiting + training) plus your salary for your employer to replace you, giving you the upper hand since they would probably be better off giving you a raise. This is one situation where you can negotiate a little higher than your true RMV.
Know Your RMV Salary Range:
Your RMV isn’t a set number, but rather a range. Knowing this range gives you the opportunity to walk as close to that higher number as possible. Keep in mind there is likely an army of other top talent fighting for this same position, so don’t let the higher number in the range be your end all be all. Once you land the job, there will be opportunity to hit that mark or go above it. That said, this is also a great way to determine if you’re underpaid at your current job. Salary ranges fluctuate as demand for talent fluctuates, so the range you were hired at is likely different (in most cases lower) than where you’re currently sitting. If it’s higher now than when you were hired, it’s time to negotiate a raise.
Research Other Opportunities:
If company A is hiring the same position for X amount over what’s expected for your salary range in the area, your RMV just got a little boost. Keep your finger on the pulse of your industry, and know what’s trending. Knowing the value other organizations are placing on your skills helps you gauge exactly what your RMV can be.
Your RMV changes from month-to-month, so it’s important to keep an eagle eye on the factors that change it. Don’t enter a salary or raise negotiation without first knowing your true RMV. It not only gives you the upper-hand, but ensures you’re being paid fairly. You should be paid what you’re worth for your skills and expertise. If your current employer isn’t, someone will.
Do you have any questions about finding your RMV? If so, ask them in the comments below!