Why Do They Get Paid More? Part II Person to Person

This is a question that comes up a lot. Sometimes it’s more in the form of “Why do they get paid more than me?” or “Why does one profession get paid more than another?” There are several answers to this question. There are several ways you can use this information to get paid more for the work you do. My last post talked about why one profession gets paid more than another. In this post I’ll talk about why one person might get paid more than another person. Even if they work at the same company doing the same job.

 

There can be several reasons why a person might get paid more than another person even if they appear to be doing equal work.

 

Different companies.

Different companies pay differently. This can mean that you’ll get paid differently than someone doing the exact same job with the exact same results and the exact same skill set at another job. This is one reason some people change jobs a lot. A common example is government employment vs the private sector. The government typically doesn’t pay as much for the same type of job as a private company would. But this same idea is seen between companies. If you see this as a problem then look around at other opportunities. Perhaps you can find a company paying what you want to be paid for the work you want to do.

Different pay structure.

Sometimes the dollar amount might be different, but so will the other benefits. For example, one person might be paid more per hour, but not have medical benefits. Once they purchase medical insurance they end up with the same amount of money. You don’t see as much of this within one company, but different companies have different policies. Upper level employees, like management, also have more room to negotiate benefits. Find a company that has the benefits that are important to you so that you can maximize your return for the work you do.

Not really the same work.

Many times it can appear that work is similar. But it may not be. For example, one employee may have to deal with more difficult people. Or their work load is more stressful. Or they may be working on other projects that are not always apparent. They may also have more responsibilities. If you want to increase your pay you can take on more work or different work. The simplest thing to do is to ask your boss what you need to do to get a raise. This could be more work, more responsibility or a different project.

Different skills and training.

This is not always obvious, but many times different pay is the result of different training. This is one of the most common reasons that two people and especially two jobs will pay differently. One example where this isn’t always easy to see is in fields that don’t require advanced degrees. You only need a bachelor’s degree to be a school teacher. However, schools prefer their teachers to have a master’s degree and will pay people with a master’s degree more. Everyone would benefit by have more school and more training. Employers want their employees to be highly trained and highly educated. Employers are willing to pay employees more when they have more training. You can increase the amount of money you make by increasing your skills. Get more training. Employers value this so much that many times they’ll even pay for the advanced training. Talk to your boss to see if this is an option.

The hiring process.

Sometimes the pay discrepancy is in the hiring process. Perhaps when one person was hired the company had a different pay structure. Or maybe the company needed someone more at that time, so they were willing to pay more. It could also be that there weren’t very many candidates available so they may have needed to pay more to get a good one than at other times. One candidate may have negotiated better as well. If you want to maximize your pay search for jobs when your skillset is needed, but not readily available. When you receive an offer, negotiate with your potential employer.

Performance.

Sometimes it just comes down to performance. Many times one employee outperforms another employee. Employers hire people to perform a job. Employers are willing to pay someone more if they do the job better. This could be anything from showing up on time and willing to stay late if needed to bringing in more sales or creating more product. If you want to increase the amount of money you make, outperform. Do your job better than anyone else.

 

Knowing these reason will help you use them to your advantage. You can gain a new skill set and show your new employer that that skill set is valuable. That will help you maximize your pay.

 

Are these things you’ve considered when trying to raise your pay? How has it worked? What are some other things that affect pay?

Why Do They Get Paid More? Part I Profession to Profession

This is a question that comes up a lot. Sometimes it’s more in the form of “Why do they get paid more than me?” or “Why does one profession get paid more than another?” There are several answers to this question. There are several ways you can use this information to get paid more for the work you do. This post will talk about why one profession gets paid more than another. A later post will talk about why two people in similar jobs or at the same company might get paid different amounts.

 

Let’s start with why one profession gets paid more than another. Consider teachers. They are vitally important, but they are not paid very well in this country. Why do they get paid so little? The short answer is supply and demand. According to the National Center for Education Statistics there are about 3.5 million teaching jobs in the US. According to the Bureau of labor statistics teaching jobs are expected to grow about 6%. Now back to the National Center for Education Statistics. There are more than 250,000 education degrees being awarded each year. That means that there are more teachers coming out of school each year than there are new teachers. This actually includes people leaving the profession and teacher turnover. Since there are more people than there are jobs, employers don’t have to pay as much to get someone that is qualified. Since the demand for new teachers is low, but the supply is high there are people willing to work for less money just to get the job. That drives down the pay.

 

The other side is areas where it is hard to find someone that is willing and able to do the job. For example, chemical engineering at the height of the last oil boom. A chemical engineering degree is difficult, and time consuming to get. There are not many people who have one. During the oil boom a lot of companies needed chemical engineers and there were not very many people coming out of school with that degree. This meant that if a company wanted to hire someone they had to offer more money than the next company. This drive up pay for the industry.

 

Supply and demand drives a lot of the reason that different jobs pay more than others. Jobs that are easy to do or require little responsibility do not pay much because it is easy to find someone that can do it. It is easy to find someone willing and able to flip burgers. It is easy to find someone that can sweep floors. It’s not as easy to find someone that can be a manager. It’s much more difficult to find some that has a specialized skill set like chemical engineering. This also applies to jobs that everyone wants or no one wants. It’s easy to find people that want to be congressional interns, and those are unpaid jobs. It’s tough to find people willing to clean up crime scenes, so those jobs pay well.

 

So what can you do about it? The simple answer, pick a profession that pays well and that there are not enough people doing. Sometimes this can be easier said than done. But just because you don’t have a knack for chemical engineering doesn’t mean that you can’t get paid the same. Look at your skill set and find jobs that match that. Look for the higher paying jobs. Or if there is a job that you want, gain the skills to do it. For the highest paying jobs this usually means a college degree, but it doesn’t have to. It might mean doing a different training program. Or it might mean following someone that currently does what you want to do to learn the job. The key point is to gain a skill that employers are willing to pay for. A skill that not everyone has. Don’t chase the money, though. Make sure the path you choose matches your interests or you might end up in a job that you regret. The other option is to be willing to do a job that others don’t want to do.

 

How do you see this in your own career?