I feel I'm not being compensated fairly after a long tenure. How do I judge if I am right, and what can I do about it?

Question

I'm a full-stack software developer, and I've been working at a company for 4 years, ever since I graduated from university. I'm being paid a competitive salary, and have lots of room for growth. Although the fast-paced environment stresses me out, I enjoy my work. I've always excelled in my role. I know because I would constantly ask for feedback, and I would be told as much. I've been growing quickly on the job, going from a junior to an intermediate, and I feel I'm on the cusp of becoming a senior.

However, for a while, I feel my compensation has not reflected that as much as I would like. I got a couple of raises along the way, ostensibly to keep me at the same level as other developers. Additionally, the company used to offer lots of benefits, much more than the norm. However over the years, that has been reduced to an average level. Despite this, retention is quite high though, and on the engineering team, one person leaves every 6 months or so. It creates doubt in my mind, because I'm not sure if I'm expecting to be paid too much.

I checked my salary on Payscale and Glassdoor, and I sit around the 65th percentile. I feel with my growth rate, and the amount of effort and dedication I put into my work, I should be earning more. Also, the company is a big name in town, and although it's local, developers who leave end up working for companies like Google, Square, and Shopify.

I've talked to my manager a couple of times about a raise, and I managed to get an 8% increase in salary at the start of this year. I keep a list of achievements I did at or outside work, and I sync up with him regularly about what I'm working on, and how things are going. So I used that to negotiate the increase. I did mention that although I was hoping for a bit more, I appreciate that I did get an increase.

I'm scared that I'm being greedy, since I have room to grow my skills, and that I should be content with what I have. However, I recently referred a friend to my company, and he managed to get an offer. He's being paid 15% more than what I currently make. I understand that new hires are paid more than current ones, but as we're both similar in skills, I can't help but feel I'm not being compensated fairly.

My questions are:

• Am I being greedy?
• Is it reasonable for me to always demand more compensation?
• Is it fair to compare my compensation to my friend's?
• Is it too soon to ask for another raise?
• Should I just look for other opportunities that will pay me more?

Thanks!

Answer 1

We can't know the answers to a lot of what you're asking, and you seem a bit unclear on things yourself: you say you're paid a "competitive salary" and at the "65th percentile", but also that you feel unfairly compensated and your similarly-skilled friend is on 15% more... it feels like more research is needed. We can't decide for you because it depends on your local area, your ability, the industry you're working in, and so many more factors.

What I think we can say is how things often work and you can decide if this situation applies to you. I'm using rule-of-thumb figures from the UK (outside London) as an example; the numbers will vary by location (and other factors as above) but the principle is usually true.

A junior developer in the UK usually starts on a salary of around £25K. If they get four annual rises in line with inflation averaging 2.5%, and then they start to wonder the same things you're wondering and ask for something more substantial so get given 10%, after five years they will be on around £30K. Meanwhile, a developer with five years' experience looking for a new job will easily be able to command £35K and probably more like £40K.

That pattern is not a cast-iron rule, sometimes companies recognise that juniors are gaining experience quick enough to justify more than a cost-of-living rise, sometimes the "big" rise comes before five years. But it is a pattern that many will recognise, and it seems to broadly fit with your friend being on 15% more than you.

It is widely accepted that - unless an employer is particularly enlightened or you've done particularly well - once you've been in your first job for a few years, changing jobs will almost certainly give your salary a big bump up to market rates. (There might be reasons to stay, money isn't the only thing that matters, but... it does matter. Most of us wouldn't work for free). Changing jobs will also give you a chance to see how other companies do things (for better or for worse!), gain a broader experience (not just more time), and start with a clean slate for how your colleagues see you (no longer that person who started as a junior).

I can't speak for what is "fair" or whether you are "greedy" and I won't try to tell you what you should do. But the situation you seem to be describing is common, and the most common solution is to change jobs. It may be possible to push for more where you are, and if you're happy there then that might be enough for you, but it will involving pushing and might get nowhere (or your employer would have sorted things out already). That's up to you.