The Hidden Cost of Being Underpaid—And How to Take Action

https://www.resumefin.com/free-resume

Carlos Stanza

It wasn’t a dramatic “aha” moment for me—it was more like a slow realization, pieced together from subtle, uncomfortable clues. A recruiter reached out with an offer: the same job title, $11,000 more. Then a colleague casually mentioned their paycheck—higher than mine, despite doing similar work. That sinking feeling hit hard. I couldn’t shake it for days. The truth was undeniable: I was being underpaid. And while confronting that reality felt overwhelming, learning to understand and own my market value became the first step toward reclaiming my piece of mind—and my worth.

Here's how to make sure you don’t end up in the same position—underpaid, undervalued, and unaware.

Step 1: Understand What "Underpaid" Really Means

Being underpaid doesn’t just mean you make less than someone else in a similar role. It means you’re making less than the fair market value for your experience, skills, responsibilities, and location. This could be due to being hired below market rate and never receiving the proper adjustments, staying too long in a role without consistent raises, or even unconscious bias in compensation practices.

Being underpaid affects more than your current take-home pay. Over time, it impacts your ability to save for retirement, negotiate in future job offers, qualify for loans, and build long-term financial health. That’s why it’s so important to understand the true value of your role—and not just hope your employer is paying fairly.

Step 2: Use Tools to Evaluate Your Market Value

If you’re wondering whether you’re underpaid, intuition alone isn’t enough. You need data—reliable, relevant, and recent. Understanding your true market value is the foundation for negotiating confidently and fairly. Fortunately, there are several tools and strategies available to help you compare your current compensation against industry standards.

Here’s how to get a comprehensive view of what someone in your role, with your experience, should be earning:

Online Salary Tools

These platforms are great for establishing a salary range based on publicly submitted data, adjusted for industry, geography, and experience level.

Glassdoor – Offers anonymized salary reports from real employees across thousands of companies. You can search by job title, company, and location, and often see base pay along with bonuses or equity details. Check both your current company and others in your industry for a side-by-side comparison.

Payscale – Delivers personalized salary reports after you input data about your education, years of experience, skills, certifications, and location. It also provides a breakdown of how each factor influences your market value.

Salary.com – Known for providing detailed compensation reports, including base pay, bonuses, benefits, and total compensation packages across a wide variety of industries and job titles.

Levels.fyi – Especially useful for professionals in the tech world. It compares compensation across companies like Google, Amazon, Meta, and others, and includes salary bands for different job levels (e.g., L4, L5, etc.).

Pro Tip: Don’t rely on just one source. Cross-reference multiple platforms to identify trends and establish a credible, data-backed range for your specific role.

LinkedIn Salary Insights

LinkedIn aggregates compensation data from its vast user base to show average salaries by job title, industry, and location. If you have Premium, you’ll gain access to more detailed insights like salary ranges, bonus averages, and stock/equity information.

LinkedIn is also helpful for benchmarking roles in companies you’re targeting or networking within. Use this data to see how your role stacks up against others in your field and region.

Job Listings and Recruiter Outreach

Salary transparency is becoming more common in job postings—especially due to new state laws requiring companies to include pay ranges. Review listings for similar roles in your area and pay close attention to compensation ranges, responsibilities, and seniority levels.

Also, take recruiter outreach seriously—even if you’re not actively job hunting. If multiple recruiters are offering you roles with significantly higher pay, that’s a strong sign your current salary may be below market.

Pro Tip: Use these listings not just to compare pay, but to assess how your skills and experience match the responsibilities outlined in higher-paying roles. It can help you reframe your value—and position yourself for the next step.

Conversations with Trusted Peers

Yes, talking about money can feel awkward—but it can also be incredibly revealing. If you have colleagues, mentors, or former coworkers you trust, open up a respectful dialogue about compensation.

Here’s how you might frame it:

“I’m doing some market research to better understand compensation in our field. Would you feel comfortable sharing what someone in your role typically earns—or any insight into what’s fair for my position?”

These candid conversations can give you inside perspectives that salary tools can’t. Be prepared to offer your own insights in return—it builds mutual trust and opens the door for honest dialogue.

Put It All Together

After gathering data from tools, listings, and conversations, identify a realistic market range—not just a single number. Consider your years of experience, education, location, and performance. Once you have that range, you’ll be in a much stronger position to evaluate your current compensation—and make a confident case if you decide to ask for a raise.

Remember: Your salary isn’t just a number—it’s a reflection of how your employer values your time, skills, and impact. And you have every right to know if that reflection is accurate.

Step 3: Look for the Red Flags You Might Be Underpaid

In addition to hard data, pay attention to these common warning signs:

• You’ve been in the same role for years without a significant raise or title change.

• You’ve taken on more responsibility, but your salary hasn’t been adjusted.

• Coworkers with similar roles (and sometimes less experience) earn more than you.

• Your company has grown or raised funding, but you haven’t seen a raise.

• You’ve hit performance goals but haven't been rewarded financially.

If any of these resonate, there’s a good chance you’re not being compensated fairly—and it’s time to take action.

Step 4: Know What to Do If You're Underpaid

Realizing you’re underpaid can spark frustration, but it can also be the catalyst for meaningful change. Here’s how to approach the situation strategically:

1. Build a Solid Case

Before initiating any conversation about a raise, it’s crucial to come prepared with a well-documented, evidence-based case that demonstrates why you deserve more. Think of it as building your personal business case—because that’s exactly what you’re doing. You’re showing that your contributions justify a higher level of compensation.

Here’s how to approach it strategically:

Track Your Achievements:

Start compiling a list of your accomplishments over the past 6–12 months (or longer). Focus on outcomes that clearly illustrate your impact—especially those that align with business goals. Did you increase revenue? Save the company time or money? Lead a high-visibility project? Train new team members? Every result counts.

Quantify Your Contributions:

Numbers speak loudly. Whenever possible, translate your work into measurable results. For example:

• “Improved customer retention by 18% over two quarters.”

• “Reduced onboarding time by 30% through revamped training materials.”

• “Generated $50,000 in new business through strategic partnerships.”

These metrics provide concrete proof of your value and make your ask more compelling.

Document Role Growth:

Many professionals become underpaid simply because their role has evolved but their title and salary haven’t. If you’ve taken on more responsibilities, managed larger projects, mentored others, or expanded your scope beyond what was originally agreed upon, that’s powerful evidence in your favor.

Highlight Professional Development:

Have you earned new certifications, completed training, or gained skills that make you more valuable to the team? Be sure to include these. They show that you’ve invested in yourself—and by extension, in the company.

Benchmark Your Role:

Use reputable sources like Glassdoor, Payscale, LinkedIn Salary Insights, and industry-specific salary reports to benchmark your role. Include data that reflects your experience level, geographic location, and the scope of your responsibilities.

Package It All Together:

Consider compiling your achievements and salary research into a short, well-organized summary or slide deck. This isn’t about overwhelming your manager—it’s about making it easy for them to understand your value and advocate for your raise if needed.

Bottom Line

When you build a solid case, you don’t walk into the conversation asking for a favor—you’re presenting a business case for fair compensation. The more thoughtfully you prepare, the more confidently you’ll speak—and the harder it will be to ignore the value you bring to the table.

2. Initiate the Conversation

Once you’ve built your case, the next step is starting the conversation—which can feel intimidating, but is essential. Timing and tone matter just as much as your argument.

Start by scheduling a dedicated, one-on-one meeting with your manager—ideally during a time of year when performance reviews, budget planning, or compensation discussions are already on the table. Avoid springing it on them in a casual hallway chat or tacking it onto another meeting. You want their full attention, and you want to show that you respect the process and their time.

Come in with a clear intention: this isn’t about venting or demanding—it’s about opening a professional dialogue rooted in your contributions and market value. The more calm, confident, and fact-based you are, the more likely your manager is to take your request seriously.

Be prepared to listen, too. Even if the conversation doesn’t lead to an immediate raise, it can provide insight into your manager’s perspective and the company’s compensation structure. That transparency can guide your next steps—whether it’s negotiating internally or exploring new opportunities.

Here’s what you can say to get that tough conversation going:

Example Approach 1: Collaborative & Gracious- "I truly value the opportunities I’ve had here, particularly the chance to take on [specific project or responsibility]. After reviewing market data and comparing similar roles, I’ve noticed my current compensation may be below industry standards. I’d love to explore how we might align my salary more closely with the value I’m bringing to the team."

Example Approach 2: Direct & Data-Driven- “Based on recent market research and salary benchmarks for roles with similar scope and responsibility, I believe there’s a gap between my current compensation and the market rate. I’d like to discuss a potential adjustment that better reflects my contributions and the evolving demands of my role.”

Example Approach 3: Reflective & Confident- “Over the past [X months/years], I’ve grown significantly in my role, taken on additional responsibilities, and consistently delivered strong results. Given those factors—and some salary research I’ve done—I’d like to talk about whether my current compensation reflects the impact I’m making.”

Example Approach 4: Curious & Constructive- “I’ve been thinking a lot about my growth here and where I can continue adding value. As part of that, I looked into compensation trends and noticed some discrepancies. I’d appreciate the opportunity to discuss how my pay compares to the market, and what steps we could take to bring it into better alignment.”

Example Approach 5: Strategic & Future-Focused- As I think about my long-term growth here, I want to ensure my role and compensation are evolving together. I’ve taken on [new responsibilities or outcomes], and from what I’ve seen in market data, my current salary may not fully reflect that. Could we discuss how to better align my compensation with my contributions?

3. Prepare for Pushback

Even if you make a strong case, your manager may not be able to approve a raise right away. Budgets might be locked, company-wide compensation structures may be in place, or they may need to advocate for you with HR or leadership. This doesn’t necessarily mean your request is unreasonable—it just means the process could take time. Be prepared to hear a “not right now” or even a “no”—but don’t let that discourage you. Instead, turn the moment into a collaborative conversation about your growth.

Here’s how to handle it:

Stay calm and professional. Avoid getting defensive or discouraged in the moment. Your goal is to keep the conversation open, not shut it down.

Ask for clarity. If the answer is “not now,” ask what factors influenced that decision. Is it budget timing? Performance metrics? Tenure?

Request a follow-up plan. Ask what specific actions, outcomes, or benchmarks would justify a raise in the next 3 to 6 months. For example: “What would you need to see from me to revisit this conversation in the next quarter?”

Put it in writing. After the conversation, summarize any expectations or agreements in a brief follow-up email. This creates accountability and a clear path forward.

Continue tracking wins. Document your impact, especially metrics, achievements, and any leadership roles you’ve taken on. Bring this data back when the time is right to revisit the discussion.

4. Consider Your Exit Strategy

If you’ve done the research, made your case, and leadership still isn’t willing—or able—to bring your pay in line with market value, it may be time to start exploring external opportunities. This doesn’t mean storming out or abandoning ship overnight. It means being intentional, strategic, and proactive about your next move.

In many industries, especially fast-moving ones like tech, marketing, and consulting, the most significant salary jumps come from changing employers—not staying put. While loyalty has its merits, staying in a role where you’re undervalued can stall your financial growth, your confidence, and your future career opportunities.

Here’s how to approach an exit strategy with clarity and confidence:

Update your résumé and LinkedIn profile. Make sure your recent achievements, responsibilities, and measurable results are front and center. Tailor them to reflect the level of compensation and responsibility you’re seeking next.

Start networking quietly. Reach out to former colleagues, mentors, and professional contacts. Let them know you’re exploring opportunities, and be clear about the type of roles you’re targeting.

Talk to recruiters and browse job boards. Let recruiters know your salary expectations up front, and pay attention to roles that clearly communicate compensation ranges. The more transparency you seek, the less time you’ll waste.

Use interviews as research. Even if you’re not ready to leap, interviewing gives you a clearer picture of your market value, your leverage, and what companies are willing to pay for your skillset.

Compare total compensation—not just salary. Look at benefits, flexibility, growth potential, bonuses, equity, and professional development support. Your next role should reflect not only a financial step up, but also a better alignment with your goals and values.

Leaving isn’t failure. In fact, it’s often the most empowering move you can make—a declaration that you know your worth and are no longer willing to settle. The goal isn’t just to escape underpayment; it’s to step into the kind of role that values your time, your expertise, and your future.

Final Thoughts: Don’t Leave Money on the Table

Being underpaid isn’t just a paycheck issue—it’s a career momentum issue. Every year you remain below market rate, you risk falling further behind—not just financially, but in terms of perceived value, confidence, and future negotiation power. Compensation affects more than your lifestyle—it shapes your long-term wealth, your ability to invest in yourself, and your sense of self-worth at work.

When left unaddressed, underpayment can compound over time. Raises and bonuses are often calculated as percentages of your current salary, so starting lower means every future increase is smaller too. It also sets a precedent—both for how employers view your worth and how you see your own.

But here’s the good news: this is something you can change. Knowing your market value and learning how to negotiate are not just useful—they’re critical career skills. Advocating for yourself doesn’t make you ungrateful; it makes you a professional who understands your impact and expects to be compensated fairly for it.

The first step is awareness. The second is action. And you don’t have to do it alone.

If you’re unsure how to position yourself for better opportunities, or need help building a resume that reflects your true worth, get a free resume review today.

Email carlos@resumefin.com for expert, personalized support that helps you take control of your career—and your compensation.

Works Cited / References

Glassdoor. “Know Your Worth Salary Calculator.” Glassdoor, www.glassdoor.com/Salaries. Accessed March 2025.

Payscale. “Get Your Free Personalized Salary Report.” Payscale, www.payscale.com. Accessed March 2025.

Salary.com. “What Are You Worth?” Salary.com, www.salary.com. Accessed March 2025.

LinkedIn. “LinkedIn Salary Insights.” LinkedIn, www.linkedin.com/salary. Accessed March 2025.

Levels.fyi. “Tech Compensation and Level Comparisons.” Levels.fyi, www.levels.fyi. Accessed March 2025.

Harvard Business Review. “How to Ask for a Raise.” HBR.org, https://hbr.org/2022/08/how-to-ask-for-a-raise.

U.S. Bureau of Labor Statistics. “Occupational Outlook Handbook.” bls.gov, www.bls.gov/ooh. Accessed March 2025.

Robert Half. “2024 Salary Guide.” Robert Half Talent Solutions, www.roberthalf.com/salary-guide.

SHRM (Society for Human Resource Management). “Pay Equity and Compensation Trends.” SHRM.org, www.shrm.org. Accessed March 2025.