TwentySomething: Are You Underpaid?

If you missed them, check out the first and second episodes of TwentySomething!

Unfortunately, the answer is likely, yes. It turns out that an employer will never pay someone more than what they’re worth.

Let’s first define “worth” — I define it as the full value an employee brings to his/her employer. It’s not just their core skillsets (the ability to generate revenue if you’re in sales, the ability to code if you’re in engineering, etc), but also the intangibles. Just because there isn’t a defined way to ascribe numerical value to things such as promoting company culture or making it easier for the company to hire in the future because of your presence doesn’t mean they don’t have value — they do.

As your employer, paying you more than what you’re worth means that I’m losing money every day you step into the office. Because no viable business can afford to survive that way, it must follow that as your employer, whether I’m paying you $50 million or $50,000 per year, I’m getting more value than what I’m paying for. That’s where my profit comes from!

So what does this mean for you?

• Never feel like you’re lucky (or unlucky) to make what you’re making. Your salary is purely an outcome of what you and your employer have negotiated and is always going to be less than what you’re worth. If it was higher, your employer wouldn’t have agreed to it.
• When negotiating compensation, factor in your intangibles and don’t be afraid to ask for what you deserve. I’ve never heard of an employer retracting an offer because a salary ask is too high. The worst they can do is just say no.
• The gap between what you make and what you’re worth will always exist. It’s a function of a capitalistic economy. Keep working to increase your worth and understand that the larger the gap becomes, the more likely your current (or other potential) employers will help you bridge it.

If you enjoyed this, please click the heart button so more people see this! If you have any comments about what you’re not liking, please post them here or just email me at karthik.senthil@gmail.com. Like I mentioned, I’ll probably be doing ~10 of these over the next few weeks in different styles + formats, so keep reading and as always, appreciate all the ❤ and support!