Think you’re underpaid? Five things to consider before quitting

by Hudson
Five things to consider before quitting

Are you feeling underpaid and undervalued at work? You are not alone.

The latest Hudson research1 has found that 30.82% of employees surveyed in Australia felt that they were underpaid, a decrease from 36.22% who felt underpaid in 2018.

Furthermore, 50.78% of the respondents received no pay increase in the last year and it wasn’t that great for those who did. Of those who got a pay rise, 61.39% of them received just between 1-5% increase.

Yet it’s a good time for job seekers as the Australian Bureau of Statistics reported2 that job vacancies were at 243,200 in May 2019, an increase of 0.3% from February 2019.

Before you go and look for a higher-paying job, you need to consider a couple of things: the market rate for your role and what the real problem might be for your workplaces woes.

  1. Understanding salary

    As you ponder your next move, it’s crucial to understand how a pay rise works.

    Often, people assume that their pay should increase every year that they stay at an organisation. However, unless there is a bonus scheme or a special arrangement in place, a salary is often worked out as the confluence of three things: the market; your performance and business performance.

    • The market

      To check the market rate, visit our online salary calculator and salary guides.

      Things to bear in mind: market rate can be influenced by variables such as the sector you’re in, years of experience in the profession, organisation type (e.g. public sector, multi-national corporation, small business, agency). It’s also influenced by the seniority of the role and availability of the skills and talent required in the role. So you might need to investigate further and check out recent jobs advertised to gain further evidence of what employers are offering. Or talk to a specialist recruiter who has expert knowledge in the salaries for your job function.

    • Performance

      You might have performance bonuses linked to KPIs, or pay rises based on performance might be discretionary. You should find out how your company links performance to pay and discuss with your manager or HR.

    • Business performance

      Discuss with your manager to get an accurate view of how your pay might be affected by business performance in your organisation – there may be a freeze on pay rises, for example.

    If your salary has remained stagnant over the years, it may be one or more of these variables at work. Even if you’ve performed well, if the business is facing challenges or there is less demand in the market, there may not be much that your manager can do. Understanding the market rate helps you gain perspective on what others are being paid, but it’s up to you to decide what the next step should be.

    If you do decide to ask for a pay rise, here’s some advice on how to go about it.

  2. Alternatives to pay rises

    Depending on where you are in your life and career, you may value other benefits over money. For example, if you have young children, your priority may be flexible work hours and access to extra leave.

    Previous Hudson research has found that instead of a pay rise, employees would be happy with more annual leave, bonuses and incentives and flexible work conditions (Talent Insights, Australia, 2017). Work out what incentives you’d be willing to accept instead of a pay rise, if you decide to discuss your options with your manager.

  3. Think more broadly

    It’s easy to attribute your discontent at work to pay, but it may be that your source of discontent runs deeper.

    Salary aside, what other factors do you consider to be deal makers or breakers?

    In last year’s Talent Insight’s report, we found that job seekers were most drawn to work environment, work/life balance and a challenging role. Are your needs able to be met at your current workplace?

    For example, if you feel bored and unstimulated, could you take a course that will allow you to widen your work scope, and will possibly lead to a pay rise over time? Could you volunteer to take on new projects? Conversely, if you are overworked or don’t get along with your team or manager, being underpaid may just be further evidence why you leaving may be a smart move.

  4. Think long-term

    As you assess your current situation, keep a long-term focus. Millennials will often take a lower paying job for career progression in the long term.

    If you are underpaid, will your current role help you reach your next step and pay bracket? If not, it may be time you looked for something that’s more closely aligned to your career objectives and offers a competitive market rate.

  5. Make a decision

    While a good workplace environment is important, a great culture doesn’t negate the fact that you aren’t being valued enough. Unless you’ve got an ownership stake in the company, being paid less than the market rate doesn’t make a lot of sense. Ultimately, your workplace is where you spend a good chunk of your day, week and life. Thus it makes sense to place yourself in a workplace where you can grow and are valued. While you can’t dictate how much your employer should pay you, you are responsible for your own career and for knowing your own value.

    Your salary plays a part in determining this equation so that you can evaluate, set or realign your career objectives.

1 Hudson Market Insights Research 2019
2 Australian Bureau of Statistics, Job Vacancies, Australia, May 2019. Available at: (accessed on: 1/08/19)