EMPLOYER MYTH #4: Employees understand their own market value.
FACT: Employees have a perception gap of their own. Many think they are underpaid, when really, they are not. Roughly 50% of respondents said they believed they were underpaid, when in fact, only 22% were actually paid below the market average for their job; 15% were overpaid and 33% were paid fairly. Nearly 30% were likely over-titled, being paid far below the market range for an inflated title.
6,481 of the survey respondents provided details regarding their current job and pay. The Salary.com team of Certified Compensation Professionals® analyzed the titles and salaries of these participants and compared them to market pay rates.
The results indicate that only 22% actually were underpaid (paid well below their fair market value), while 15% were actually overpaid (paid well above their fair market value) and 33% were paid reasonably close to their fair market value.
Additionally, we found that 30% were likely over-titled. That is, they were being paid far below the market range (less than 70% of their job's market value) most likely because of ambiguous or inflated job titles. Over-titling can either over-represent the level of a job, or misrepresent the duties of the role, either of which can lead to an inadequate job match and artificially high salary expectations.
Well-intentioned employers occasionally offer inflated job titles as recognition in lieu of salary increases. These inflated titles often reflect what the employee would like to be doing rather than their actual job responsibilities.
Tip: Discuss fair job pricing with your employees so they can understand how their salary is determined, what their industry peers are making, and the factors that will impact future salary increases.