What to Do if You Find Out Someone Makes More than You

With advancement in consulting, comes more exposure to the business operations of projects. Consulting projects are operated independently and they are managed by the senior managers. This includes financials. In the consulting world, clients pay for the brain power of the consultants. Knowledge and the ability to get the job done is what the firm sells.

Insight into the financials of a consulting project can be revealing. I was recently tapped to run our project financials. I was given insight into what each person on our team charges the client. In consulting, this is referred to as the Loaded Cost Rate (LCR). An LCR is an hourly rate that a consulting firm charges for individual services. An entry level consulting analyst may have an LCR of $80, which may equate to an $80k annual salary. The higher the seniority, the higher the LCR.

Let's just say I am getting underpaid when compared to peers with less experience and education credentials. I've started to question my own worth as a result of the discovery.

To cope with the fact that I am getting paid less than valued, I've applied the following strategies:

1. Don't take it personally. Huge consulting firms sell resources, not individuals. On paper, I have a similar skill set as other Managers. Coworkers who work with me know that I bring a different set of skills and perspectives. Moving forward, I'm not going to take it personally when I find out someone makes more than their worth. The firm values your time there. Put in the time and re-evaluate.

2. Negotiate a raise. This performance review year I've made it clear to my Managers and Career Counselors that I need to be given a raise. For an MBA and almost ten years of professional experience, I should be getting paid 20-30k more according to Glassdoor.com. I know that I could leave the firm and get paid more from a competitor. I've raised all of these points to leadership. In November, I'll find out whether or not I'll get a substantial raise higher than 5%. Looking back, I should have done a better job of negotiating my initial salary. Honestly, I was happy to be given a job offer in the first place following graduate school. However, I failed to do research on Consultant level salaries with an MBA. I could have negotiated at least 15-20k more of what I was brought in at. For California, this would have been appropriate.

3. Remain calm and keep my cool. My first impulse was to jump on the phone and call the Managing Director who hired me. Or maybe I could just sit in the corner scowling at my teammates. Those actions would not be advised. I need to stay calm and not make any rash decisions or confront anyone. What my coworkers make is their business, not mine. I've recognized my emotions and acknowledged them. Now it is time to move on, stay positive, and figure a way out.

4. Stop reviewing LCR's altogether. Easier said than done. As you rise the ranks in consulting, LCR's are critical for pricing and financial analysis. However, when I review LCR's now I will disassociate the number from the individual. If I know the individual on a personal level, I'll view their LCR through a lens of detachment. I guess this is what becoming an adult is all about. As you rise through the ranks, you need to prepare yourself for knowing too much.

5. Take time to process. I think back to the decisions to join the consulting firm. I was in graduate school and weighing the pros and cons of entering the public or private sector. The salaries I was offered in the public sector were 20-30k lower than the offer I had received from consulting. Even the consulting firm I had worked for previously I was making 30k less without an MBA. When I was given the offer of a low six figures, I was ecstatic. However, I failed to do research on how I stacked up against my peers. At the time, it was more than enough for me. I need to be reflective about why pay decisions might have been made. The majority of my coworkers come from top tier schools. I am an outlier. I also need to reflect on my personal performance, productivity, and contributions to the firm.

6. Reach out to HR. The first thing I did when I found out I was not making enough was reach out to HR. I need to compile as much information as possible at where I stand among my peers. There are ways to make more money. Whether through a referral bonus, stock purchase plan, or negotiating a raise. Hopefully, HR can help me make more money.

7. Look for a new job. If all else fails, it's time to look for a new job. In November, I will find out if I will be given a substantial raise. I know that I am being paid under market by at least 20k. My expectations is to have at least a 10-15% raise this year. I've stated my rationale to management, HR, and my career counselor. If no one fights for me, it is time to start looking for a new gig. In June, it will be four years at the firm, a perfect amount of time to start thinking of exit opportunities.

I realize I did not do enough due diligence on negotiating my starting salary when I first started working. When you are brought in at a certain salary it can be difficult to climb out of the hole. Before taking the job in the first place, I should have done proper research into what others were paid at the company. The whole experience has taught me to better prepare for salary negotiations in the future.

Principles to remember:

Do:

• Research the company's pay scale before negotiating salary

• Know your worth and value in the market, check out Glassdoor or PayScale report to see how you stack up

• Consider your manager's perspective

• Think creatively about other ways to address the pay gap if a raise is not possible

• Try to get more context from HR

• Stay calm and do what you can to not take it personally

Don't:

• Be rash and immature. Keep your cool and do your best to stay calm and level headed

• Mention your higher-earning coworkers by name during a salary review. Focus on the value you bring to the company

• Confront your coworkers who make more

• Get emotional and throw a temper tantrum

• Stay in a job for too long if you know your market value based on your experience and skills