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Today’s business world consists of smart, hardworking people who have great ideas, and this can be somewhat intimidating when it comes to determining your own value within a company. How much should you be charging for your services? One of the most basic rules in any successful negotiation is having the ability to truly understand your own value and self-worth. Knowing exactly what skills and abilities you bring to the table each day, as well as how valuable this is in comparison to others performing a similar job, will give you an important edge. This is especially true when it comes to your annual review and potential raises. Here are some tips and tricks that will help you to determine your “fair market value.” Start by finding a reliable website that provides employer-reported data (not self-reported data), such as Salary.com.
Pretend that you have to find someone to replace you. How would you advertise your current role within the company? Write out a job description that is as descriptive (and accurate) as possible. This will help you to determine the skills that you’re essentially selling to your company every day, and it will make it easier to find jobs within the marketplace that are comparable. Finding similar jobs within the marketplace will help you to determine what the market rate is for these positions and skills. Beware of looking for jobs based solely on a matching title, however. Unfortunately, job responsibilities and corresponding titles do not always match across all companies, which can be extremely misleading. Thus, when you are trying to align your “job” with the marketplace, you need to ensure that at least 75% of the skills and job responsibilities you have created for yourself align with whatever description you are trying to compare it with. If you are planning to present this information to your employer during your annual review, it is especially important that the job responsibilities align. Keep in mind that your supervisor will likely want to verify this information, and for this reason it is important for the website you’re using to be employer-reported (rather than self-reported), as many managers simply do not trust self-reported data. Additionally, your manager will most likely want you to explain your thought process behind determining comparable job descriptions, and you should be prepared to explain yourself. Think about this as a step in the right direction as it provides you with a perfect opportunity to further illustrate your skills and value to your manager.
Next, you’ll need to consider your employer’s perspective, as salaries will vary depending on the company’s size, the industry, and the location. Larger companies often tend to pay their employees a higher salary, as they have higher revenues and a significantly larger sphere of influence within their particular industry. Additionally, larger companies usually generate a much greater level of productivity and efficiency per employee. Smaller companies, on the other hand, are able to offer more exposure and interaction with senior staff, which has the potential to provide a better opportunity for professional development and experience. Keep this in mind when determining your market value.
Once you’ve found comparable jobs and accounted for industry and company factors, you need to assess your own performance and skills. It is important to be realistic when you’re evaluating your own value. For instance, if you’re newer to your position, you will likely have some of the skills listed in the job description, but there might be others that you have less experience with and might still need to improve upon. On the other hand, if you’ve been working in a specific position or industry for years, you will perform the job much more efficiently than a new hire, which greatly increases your value. Once you have thoroughly analyzed your skills and value in comparison to the market, you can determine the amount of money you believe is appropriate. You should also take this opportunity to think about further skills you can bring to the table in the future, in order to increase your value within the company.
Bottom Line: Understanding your own worth is very important. If you don’t understand your worth and the value you bring to your employer, why should anyone else?