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Only 40% of employees believe they are paid "what they are worth."

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According to a new survey, most people don't believe they're being paid what they're worth for their current work.

Less than half of workers believe their income sufficiently reflects their job function and experience, according to the data. The other half believe they are underpaid, and one in six can't decide whether they should be paid more or less.

The results appear to reveal a direct association between whether employees agree or disagree with the idea that they are paid "what they are worth" and the last time they earned a pay raise. Those who have been waiting for a raise for more than a year are more likely to be dissatisfied with their pay. Those who have earned a pay raise in the recent six months, on the other hand, believe the opposite.

Senior executives, such as owners, CEOs, CFOs, and C-level executives, are more likely to feel sufficiently compensated for their efforts, with the majority saying that they are paid "what they are worth." Two-fifths (40%) of them say they've gotten a raise in the recent six months.

Non-management employees, on the other hand, make up roughly 64% of survey respondents. They are among the most likely to believe they are underpaid, and they are among the least likely to have received a raise in the previous six months.

While many diverse elements, such as job title, organizational role, and experience, might influence an employee's view of their pay, it can only be quantified in monetary terms. The sweet spot for most appears to be around £45,000, which is much more than the national average (the Office for National Statistics reports that the median annual income for full-time employees in the UK is £31,461). Nearly half of those earning more than £45,000 believe they are paid 'what they are worth.' On the other hand, 46% of individuals earning less than £45,000 believe they are not being paid "what they are worth."

Why don't people request increase in payment on a more regular basis?

It's easy to wonder why so many individuals have accepted the status quo when almost two-fifths of employees say they haven't had a pay raise in over a year and nearly the same percentage (43 per cent) say they haven't requested one in over a year. This poll doesn't provide a conclusive answer, but it does highlight the adage that "you don't get what you don't ask for."

Workers at smaller businesses (those with 26 to 50 people) appear to be the least likely to request a wage raise, with only 50% having done so in the previous year, compared to 55% of those at larger businesses (with over 251 staff).

Women are also less likely than males to request a wage boost, with only 54% of women requesting a raise in the last year, compared to 60% of men. When it came to receiving one, somewhat more women than males were successful.

CIPHR compared the last time employees requested a pay raise to the last time they received one to see how many people were successful in negotiating a raise. A third of employees who requested a pay raise in the previous month received one in the previous month; two-thirds of employees who requested a pay rise in the previous six months received one in the previous six months, and three-quarters of employees who requested a pay rise in the previous year received one in the previous year (the majority – 54 per cent – around the same time they asked for one).

The majority of poll respondents (63 per cent) who say they haven't requested a wage raise in over a year haven't received one in that time. Only a third of the people defied the trend. So, for employees, it may be worthwhile to inquire.

According to Gwenan West, CIPHR's head of people and talent, being prepared pays off:
"Before you even contemplate asking for a pay rise, ask yourself ‘why’. Do you feel undervalued? Are you paid significantly less than the market rate? Have you taken on more responsibility?

“Research is key, and you need to be professional and strategic in your request. Plan out what you want to say in advance, have some notes at hand to refer to, and try to avoid emotive language.”

What’s the worst you could be told – no?” adds CIPHR implementation team lead Courtney Thompson-Ayerst, an HR consultant. “The best way to handle a pay raise is to have an open discussion. Many employees use the outside world as a sort of negotiation, which can occasionally lead to disastrous results. When all they needed to do was have a simple talk with their boss. It can mean the difference between feeling appreciated in your current position and (hopefully) earning what you desire – or feeling bitter and undervalued at work."

The average annual pay increase was 8.8%.

The average wage increase reported by all respondents who received a raise in the previous year was 8.8%. (the median pay rise was 3 per cent). The average wage increase for those who received one more than a year ago was about 3% lower, at 6.2 per cent (the median pay rise was 2 per cent).

People in the arts, entertainment, or recreation, manufacturing, HR, finance and insurance, legal services, and retail were among the most likely to say they had received a wage rise in the previous year.

"Any questions around pay – particularly those that centre in on thoughts and feelings about ‘what you are worth’ as an employee, are always highly subjective," explains Claire Williams, head of people and services at CIPHR. Employees want to feel monetarily rewarded for the skills or experience they need to accomplish their job efficiently, the contribution they make, and, most importantly, for survival.

“There’s no denying that people’s perception of their own value in the workplace is closely linked to the financial package they receive. This has obvious implications for employers. Workers that feel undervalued or underpaid can have a negative impact on productivity, employee engagement, job satisfaction, morale and so much more.

“However, while salary is a key driver for many employees, there is a huge amount of research that suggests salary isn’t one of the top motivators to leave an organisation. Most people leave due to career and development opportunities, management behaviour, and work-life balance. Employers need to ensure that they take a wholistic approach when considering how best to retain and reward their top talent. Pay rises and market-value salary are important but they are only part of a wider set of retention methods to ensure employees feel valued and happy.”

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