By John Sonmez March 18, 2014

Why You Aren’t Paid as Much as You Are Worth (and how to get paid more)

Software developers usually make pretty decent salaries, but did you know that companies that hire software developers usually make much more money off of a single software developer than they pay that software developer?

I guess, if you think about it, it is common sense. Why hire programmers if those programmers don’t make more money for your company than the salary you are paying them?

But sometimes this disparity between what a software developer actually makes and the value that software developer brings to the table is large—sometimes it’s really large.

In fact, if you are being paid an hourly rate as a contractor, you are probably making about half of what the client is being billed for, if even that.

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Being a commodity

One of the big problems many software developers face is that they can be easily treated as a commodity.

This problem is becoming more and more prevalent as basic programming skills become easier to come by and more and more people are becoming programmers all over the world.

If you go onto oDesk or ELance today, you can find software developers willing to write code for less than $10 an hour; you can find really good software developers writing code for $25 an hour.

If you are letting yourself be treated like a commodity and the price of that commodity is dropping, you are in big trouble.

Forget about job security at a single job. You’ve got to worry about your entire career and all the investment you put into your skills.

If you want a long and prosperous future doing what you love to do, you’ve got to be able to justify why someone should hire you and keep paying you at your current rate instead of hiring someone at $10 an hour to do the same work.

What makes something a commodity?

In order to solve this problem, you’ve got to examine what exactly it is that makes something a commodity.

But, before we go any further, let’s take a moment to make sure we are on the same page about what a commodity is.

I like this definition from the Wikipedia entry on Commodity:

“The exact definition of the term commodity is specifically applied to goods . It is used to describe a class of goods for which there is demand, but which is supplied without qualitative differentiation across a market.”

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The key thing here is “without qualitative differentiation across a market.”

This means that if the service or product you provide isn’t much different than what everyone else is selling, it can be considered a commodity. And, as such, the price will be determined by the market, not by the actual value you provide.

So, even though you may be providing your employer with $500,000 worth of value per year by writing code, your employer can turn around and pay you whatever the market says a software developer with your years of experience and skill level is worth.

That is unless…

You find a way to be something more than a commodity

That is the key to being paid what you are actually worth instead of what the commodity market for software developers says you are worth.

But, it isn’t easy to stand out. It isn’t easy to be perceived as something more than a commodity if you don’t know how to do it.

I want to show you an example of how some people break out of commodity markets and differentiate themselves to make more money.

Have you ever heard of a voice-over?

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A voice over is when you have someone who has good oratory skills or a particular accent, or sounds create a recording for something like an advertisement or a cartoon character’s voice in a cartoon.

There is quite a big market for people who do voice overs. Just about every radio ad, podcast advertisement, and animated film or show needs voice over talent to create voice overs.

But, did you know it is a commodity market?

That’s right; I can actually go onto Fiverr.com and pick from a multitude of skilled voice over actors to do a voice over for me for $5. Not only can I do it—I have done it. I’ve hired two different voice over actors to do voice overs for my podcast for just $5.

But, believe it or not, some voice over actors get paid millions of dollars each year to do basically the same work.

So, what separates the voice over actors who get paid millions from the ones who get paid five bucks?

I’ll give you a hint—and it’s not talent—it’s marketing.

Those voice over actors that are making the big bucks have figured out how to market themselves to land the right gigs, which increases the value of their name and gets them more and higher paying gigs.

If you don’t believe me, go on Fiverr.com yourself and check out the talent level of some of the top people on there that are doing voice overs for just five dollars—you will be impressed.

No one tells software developers how to market themselves

In the entertainment industry self-promotion and marketing is the name of the game.

There are whole companies that do nothing but market talent. I mean, actors have agents, so do musicians, and yes, even people who do voice overs have agents… at least the successful ones do.

But, when it comes to software development, you are not very likely to find the same kind of resources of knowledge about self-promotion and advertising that envelope the entertainment world.

Have you ever heard of a software developer having an agent?

Well, even though it sounds silly, you’ve got to be your own agent if you want to rise above the crowd and stand out. If you want a chance at making the big bucks and setting your own price, you’ve got to figure out how to market yourself.

There are plenty of software developers that are already doing it. You’ve heard them on popular podcasts and read articles written by them in trade magazines or heard them speak at conferences.

But, no one ever talks about how they achieve their success… at least not until now.

Over the past few years, I’ve been talking to developers who have broken away from the herd. I’ve studied their careers and asked them about how they’ve achieved their success. I’ve been able to duplicate their results to a large degree myself, and since no one else is doing it, I want to share that information with you now.

Check out this package I am putting together called “How To Market Yourself As A Software Developer.” I’m going to be launching this this package, on March 27th.

Sign up here to get a $100 discount directly in your email on launch day.

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Well, I hope this article has been helpful to you and helped you realized that you’ve got to make a fundamental shift in your thinking if you want to be able to really advance your career and not be treated like a commodity.

About the author

John Sonmez

John Sonmez is the founder of Simple Programmer and a life coach for software developers. He is the best selling author of the book "Soft Skills: The Software Developer's Life Manual."