The peer salary question has always been a bit of a taboo subject in the workplace. Just like you wouldn’t ever want to go into a car dealership to negotiate buying a car without knowing the blue book value of the car, you don’t want to walk into a salary negotiation without knowing what your peers are getting paid for doing a similar job. Knowing what your peers make is important because:
1. What is a reasonable amount to ask for? This probably seems pretty obvious. It is probably a lot more difficult to ask for a higher salary than everyone else in your peer group. It also means that if you earn a lot less than everyone else in your peer group, it is almost a no-brainer that you need a salary adjustment…all you would need to do is ask.
2. Some companies will actually pay certain groups within the company more than their counterparts because the culture of the company evolved that way. For example, I have first-hand experience that there are technology companies that will pay a higher salary to employees with technical degrees even if they are working in non-technical areas of the company.
3. On the flipside, you should avoid asking for an amount that is *too* high. In a negotiation, you can blow your credibility if you ask for something that is way off of the scale and give the other person the impression that you are out of touch with the negotiations. Although targeting the right salary sounds like a difficult balancing act, it isn’t that tough if you start with a sense of what your peers make.
4. It is also important to know what your “future peers” make. People that are in the positions where you intend to be in a couple of years can be a great benchmark when you think about where you will be in a couple of years. This is a way for you to estimate where you will be in a few years and help answer the question “Is this what I actually want to do?”
5. Often employers will use the fact that people usually don’t know what their peers make against them. Sometimes in negotiations, manager only know what their direct reports earn. Some managers often pay their direct reports more of less than parallel managers in the company. By knowing what your peers make inside the company, you may actually have more information than your manager. Use this to help support your argument to get paid what YOU deserve.
It may be a little uncomfortable to try to figure out what you peers make, but it can be worth 10’s of thousands of dollars in your negotiation. Going into a negotiation armed with this information will help you maximize your outcome.
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