How to ask for re-evaluation of salary and conditions when you are paid much less than the job market standard?

Question

I'm a software developer working remotely for a company in a very developed country. I started working for them for a very minimal amount of money, because I just wanted to get started and hoped that once they see what I'm capable of, they will offer me better conditions. When I say minimal amount of money, I mean 20% of what would be an acceptable amount for someone doing what I do, based on my research. Although I've gotten a raise after 6 months, the payment continues to be very low compared to the overall standard. Recently, they hired another software engineer who I've had to teach for the first two months about how we do things at the company. I checked her UpWork profile (she told me that the company found her on UpWork), and I found out that she was paid at least 3 times more than I am. I thought she was a good developer and she deserved it, but 6 months have passed and she still counts on me about many things, while I am kind of the leader of the team now, after one colleague left.

I don't want to leave this company because the organisation that the development team has is amazing, and the people are great and I learn a lot from them. Still, I feel like the company it taking advantage of me. I know I should ask for a raise, but the problem is that at this point, I think it would take something like a 70% raise to my current salary, to be close to job market standards. I don't want to come out as arrogant for asking for such a big raise, but on the other hand, I feel like I'm being taken advantage of, and it's becoming very stressful. Furthermore, I'm paid on a daily basis, meaning that if I want a day off, I don't get any money, and that is also very inconvenient, so I've been thinking of asking for something like 2 weeks paid days off a year.

Has anyone ever been in a similar situation, where people doing much less than you are being paid 2-3 times more than you and given better conditions in general? What would be a good way to solve this without breaking the relationship with the company, because I really like the development team, so I want to stay here.

Answer 1

What would be a good way to solve this without breaking the relationship with the company,

Unfortunately, in most cases the only way to solve this is to break the relationship with the company. The company received a bargain when they hired you at well below the market standard. You might receive small raises every now and then, but you will always remain under market value. You can certainly ask for a raise, but as you have pointed out it is very unlikely that the company will give you a 70% raise in one shot even with added responsibilities.

In the future, you need to make greater emphasis on salary when considering any new job opportunity. Your initial salary is your best opportunity at receiving the pay that you desire.

Answer 2

Anecdotally, I used my first job to gain experience, and my second job to get paid what I wanted. From what I've seen and read, getting a job with a different company is the best way to increase salary even if your company is not ripping you off that badly. What you're describing would be criminal or at least highly suspicious here in the US. Are you comparing to salaries for a similar job in your area? I know wages can vary widely between countries.

I don't want to leave this company because the organisation that the development team has is amazing, and the people are great...

This is your attitude about the company and people you work with. Good for you! You've been able to see the bright side of a bad situation. Keep the same attitude when you move to a new job, and you'll feel the same way about them. If your co-workers are great at their jobs, they'll be able to find a better company to work for. If they are not, then you'll probably meet an even better team when you move to a better company.

What about the company's attitude toward you? If the company valued your contribution fairly, they would pay you a fair wage. If your boss does not have the budget, it means your boss' boss is not valuing your team fairly. If your boss' boss doesn't have the budget, it means the CEO is not valuing their team fairly; if the CEO does not have the budget, it means the company's product is less valuable to their customers than the amount of work it takes to create the product, and they might go out of business soon.

...and I learn a lot from them

This is the biggest actual benefit to you, but don't learn too much! Learn enough so that another company will say, "Yes" to hire you with a fair wage. You will still learn new things at the new job, and you will get paid more to do so.

Answer 3

Your salary is basically the result of a negotiation between you and your employer. Their aim in the negotiation is to get you do perform your role for the least amount of money possible. (If they are smart, they'll be aiming to pay you enough so your head isn't turned by roles elsewhere). Your aim is to get them to pay you as much as possible to do the role. What you are willing to do the job for - i.e. your current salary - is your market value.

In any negotiation, knowledge is key. You wouldn't go to buy a car and let the salesperson know the upper end of your budget - any more than they would let you know the minimum they can afford to let a car go for.

When it comes to salary reviews, the company has knowledge of your current salary giving them the upper hand. The know how much it takes to make you 5% or 10% better off. Typically annual salary reviews are small increments. To break this cycle you need to prove your market value has increased. The most effective way to do this is to get a better offer somewhere else. (You could go with market data etc. but another job offer adds some urgency with regard to time, plus it's not what you could get if you looked, it's what you have waiting for you right now).

If you're confident enough - don't reveal what the other salary offer is. This just gives them a number to beat. Tell them you want to be paid what they think you are worth (and not what they think will be enough to make you stay).

One final thing... you need to be prepared to take the new job in the event they don't match or come close.