5 Signs You're Underpaid (And What to Do About It)

If you have a nagging feeling that you're being underpaid, you're probably right. Studies consistently show that employees who do not regularly assess their market value and advocate for themselves can fall behind the market rate by 10-20% or even more over just a few years. The financial cost of accepting below-market compensation is staggering, as it compounds over your entire career, affecting everything from your savings to your retirement.

Recognizing the signs that you are being undercompensated is the first critical step toward taking action and getting paid what you are truly worth.

5 Clear Signs You're Underpaid

1. You Haven't Received a Meaningful Raise in Over a Year

With inflation as a constant economic factor, a stagnant salary means you are effectively taking a pay cut each year. Your purchasing power is decreasing. A standard cost-of-living adjustment is the bare minimum; a meaningful raise should outpace inflation and reflect your growing skills and contributions.

2. New Hires in Similar Roles Earn More Than You

Companies often have to offer competitive, market-rate salaries to attract new talent. If you discover that recent hires with similar or less experience are earning more than you, it's a clear sign that market rates have increased while your internal compensation has failed to keep pace.

3. Your Responsibilities Have Grown Significantly, But Your Pay Hasn't

Have you taken on new projects, started managing people, or absorbed the responsibilities of a former colleague? If you are consistently performing work that is beyond your original job description, but your title and salary have not been adjusted accordingly, you are being underpaid for the value you are providing.

4. Online Salary Calculators Show a Major Discrepancy

While not perfect, reputable sites like Glassdoor, PayScale, and Levels.fyi can provide a solid baseline for what professionals with your job title, years of experience, and in your geographic location are earning. If these tools consistently show that you are well below the average, it's a strong data point in your favor.

5. Recruiters Are Consistently Offering You Significantly More

If recruiters from other companies are frequently contacting you with opportunities that offer a salary 15% or higher than your current compensation, that is the market speaking directly to you. It's a powerful and direct indicator that your skills are worth more than your current employer is paying.

Your Action Plan for Getting Paid What You're Worth

The 3-Step Plan

Step 1: Research and Document

Conduct thorough salary research using multiple sources to determine a realistic market range. At the same time, create a "brag sheet"—a document listing your key accomplishments, quantified achievements, and expanded responsibilities since your last salary review.

Step 2: Prepare Your Business Case

Frame your request for a raise as a business case, not a personal plea. Combine your market research with your documented achievements to show your manager, "Here is the market rate for someone with my skills, and here is the specific value I have delivered to this company."

Step 3: Schedule a Meeting and Be Prepared to Negotiate

Schedule a dedicated meeting to discuss your compensation and career growth. Present your case calmly and confidently. Know your target number, your walk-away number, and be prepared to negotiate or explore other options if an internal adjustment isn't possible.

Key Takeaways

Research your market value regularly using multiple salary data sources
Document expanded responsibilities and quantify your impact on company success
Create a 30-60-90 day plan to research, prepare, and present your compensation case
Consider total compensation package, not just base salary, in your evaluation
Be prepared to explore external opportunities if internal adjustment isn't possible