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Over-Titled and Underpaid

Over 60 percent of employees are planning to look for a new job in the coming three months, according to Salary.com, Inc.'s 2006/2007 Employee Satisfaction and Retention Survey. But in the same survey, employers guessed that only 36 percent of their workers are thinking about changing jobs. What's causing companies to underestimate their employees' wanderlust? Researchers uncovered that companies often give employees inflated job titles that don't match their duties or their salary levels, which leaves feeling underpaid.

Nearly half of all surveyed employees consider themselves underpaid. But in fact, after reviewing the survey results, Salary.com analysts found that only one in five respondents were earning less than the fair market value for their job. "We found that 30 percent of respondents were likely over-titled, leading many to feel underpaid when in reality an inflated job title was the real issue," said Bill Coleman, a Salary.com senior vice president. Over-titling muddles up some employees' perception of what fair pay for their roles should be, which in turn leads them to look for new opportunities.

Unfortunately, most employers spend very little time managing their salary practices, relying instead on reactive counteroffers to convince workers to pass up outside job offers. It's a somewhat effective strategy since most employees reported that a 10-15 percent increase would make them happy enough to stay.

"While pay is important, it isn't everything," warns Coleman. "The real surprise is that employers are largely unaware of the real reasons for employee dissatisfaction beyond pay." Survey respondents listed good relationships with coworkers and managers as well as good working hours as other important factors in determining whether to stay with an employer. But until employers fix their broken compensation systems, pay will remain the tiebreaker.


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