There are two main reasons. One is linked to the position in the hierarchy and the second one to the very common personality of programmers. You can’t change the former, however, you have more control than you think on the latter.

Most developers are positioned at the very bottom of the pyramid. This is fine: usually, nobody expects anything from you other than writing lines of code.  But many developers are providing much more value than the person just ahead of them, while generally having no possibility to earn more and be paid what they worth. The reason is that in our societies, we still think the salary is bound to the position in the hierarchy.  The analysts or project managers are higher in the hierarchy, so they should be paid more according to the rule.  The problem is easy to spot: position in the hierarchy in many cases is not directly related to the value you provide.

But why do many developers accept to be paid less than they worth? Developers and engineers in general tend to be introverted people. Introverts are often abused by extroverts. Some are aware of their value, but feel they have no control over their destiny, while others have been told since childhood that they worth less than others.  The former are convinced there is nothing they can do and the latter don’t know there is something to do at all. This leads to stagnation. Many extroverts are intuitively aware of that and use it heavily in their interactions with introverts. You need to take advantage of your introvert personality to survive in this world of extrovert people.

As a developer you are responsible for your current situation. If you are really paid less than you worth on the market, you need act on it.

Finally, I want to illustrate how this perverted system can sometimes work against itself.  Salary grades, for instance, can be very effective in many ways, but when poorly used and/or in strongly homogeneous companies (companies with lot of different skills involved), they can lead to very difficult situations for the employer. Below is the true story of one of my best friends.

My friend started as a programmer in a big hospital. Thanks to his hard work and dedication, he quickly became Oracle DBA, which was a critical position in a company where data is both sensitive and valuable.

The hospital worked with grades. Grades are bound to your position in the hierarchy, length of employment and diplomas. Salary increases were automatic and fixed in advance. In fact, he knew how much he would earn at every step of his career.

My friend got an offer to become DBA in another company that didn’t use salary grades. By accepting the offer, his salary could be increased a lot. Because he liked and respected the hospital he worked for, he decided to talk to the boss, asking for an increase. He just asked for what he was worth on the market.

The boss refused. It was impossible because of the grades and the unions would not let that happen.

My friend left.

The hospital eventually hired an external consultant (not bound to grades) and launched the recruitment process. The consultant did not know anything about the infrastructure in place, so his learning curve was huge. The hospital lost lots of money  training him.

The hospital carried on losing.  They could not fine a qualified employee to replace my friend and are still using the external consultant at 5 times what my friend asked for.

That was almost three years ago. My friend is still at his new place and climbing the hierarchy ladder very fast doing what he loves.

The hospital is still paying 5 times more.

What you are worth as a developer is what the target market agrees to pay to have you on board.

What the market will pay fluctuates quickly, just like the financial markets, and can’t really be generalized, so websites with indicators can’t help further than giving you an indication. It may not be in sync with the value you can potentially provide because what the market agrees to pay you is generally subjective.

Knowing what you are worth on the market is an important bit of information you can get using the two proposed techniques below. One for freelancers and another one for employees and other permanent roles.

As a freelance developer, I was always asked by head hunters what was my current daily rate. At the beginning, I used to give a random number based on assumptions in the hope it would be accepted. I quickly noticed that it was always accepted… I deduced I was under market rate. I started to increase my daily rate by 50€ increments for each mission I was offered until I faced some resistance. Resistance is not a formal rebuttal by the head hunter but some sort indication that they want to negotiate. In order to prevent myself being abused by the wheeler dealer type of agents, I always stayed firm on my position refusing any reduction. The accepted daily rate was my current market value.

For permanent roles and employees, you can’t negotiate your salary upfront without doing actual interviews. Here is the process I actually used to fine tune my method and that works very well for employees:

• Update your resume & post it on the two main job advertising sites in your location or profession. You don’t have to be concerned about the fact that your actual boss may find it. In most cases, it will reinforce your position. The hiring process is a painful and onerous process. If he asks you why you do it, tell him the truth.
• Try to get at least 5 interviews and find out information on the proposed compensation package. Be sure to include everything: salary should not be your main focus.  Location of the company, nature of the project, work environment, alignment with your career objectives are also things you should consider.
• Take an average of at least 3 offers that you get, that’s your current market value.

Working from home or a private office is probably the future of knowledge age companies. It allows you to do away with commuting completely and to work in a quiet  and non (over) interrupted environment (if you decide to).  It’s the opposite of the open space office. The gain in productivity can be huge.  Both you and your (smart) boss are potential winners in the deal, not to mention the potential real estate saving for the latter.

Unfortunately, telecommuting is not for everyone though and this may be why it is not generalized yet despite the positive conclusions of the studies on the subject.  Procrastinators may find it very difficult stay as productive as they are at the office. You will also need lot of independence and self confidence.  Some employees may also suffer from isolation.

Procrastination and isolation are the two problems I will address in this post. Other problems related to telecommuting won’t be debated here such as:

• security concerns,
• the fact that telecommuters are less likely to be promoted (Kreitner & Kinicki, 2009),
• potential loss of thrust by managers
• communication problems with your team

Here are the 7 things I strongly suggest you to try.  I have experimented with this myself during the past 10 years. They provide some tips to help avoid both procrastination and isolation. Disclaimer: you may adapt them to your particular case and not take those empirical & personal observations as a generalization of what to do. I really encourage you to share your own experiences on the subject in the comments.

Procrastination

1. Use a schedule – as if you were in a formal office.

If you don’t do so, you will be tempted to work too much or too little, depending on your personality. Both are problematic long term. Having a fixed schedule will not only create some sort of rule to manage your time, but also help you beat procrastination.

One of the keys to beat procrastination is to have “starters” and avoid “retarders”.  If you like to do non work related stuff such as reading news or browse internet, reserve 30 minutes before and after your fixed work time for it.  When you feel the need to do it while you are into your work time, remember you will be able to do it after.  It usually calms down the need for it and after some some time, the addiction will disapear.  When you arrive at your work time schedule, close everything and start working. This can be hard the  first few (ten) times, then after a while the habit will kick in.

In order to avoid the frustration of having to leave off work in a middle of something, I try not to start debugging or another task that has unpredictable time duration at the end of the afternoon.

2. Replace commuting by physical excercises and meditation/relaxation.

Telecommuting will free up a lot of time, and you should take it as an opportunity to take care of yourself, and certainly not work more for the same salary. Consider taking up physical excercies and relaxation or meditation. It will improve your overall productivity and will contribute to reducing procrastination (Davis & Jones, 2007).

3. Take regular breaks

Since you don’t have your environment anymore to remind you it’s time to take a pause, use the pomodoro technique. I personnaly taking a break of 10 minutes every 45 minutes, but you may setup your own schedule. I use a special software for that called Workrave that I warmly recommend to you.

The pause can be either doing nothing (it’s what I do every other break) and free your mind or do stuff off your computer such as class papers or call a colleague.  In any case, this should occur in another room, and certainly not in front of a computer.  I personally do three minutes of mindfulness or simple observation of what is happening outside (simply being in the present moment).  Feel free to adapt this to what works best for you.

At noon, take a full break and don’t eat in front of your computer.  Some of you may enjoy some cooking time while others may be very relaxed by some time listening to music.

4. Put clear limits between work and your normal life.

This means you have a dedicated office/room you don’t use for your pleasure but only work.  This is very important especially if you have kids.  Your office should not be used to anything else than working. This also means:

• don’t work on your laptop when you are watching a movie with your family
• avoid any professional activities during the weekend
• remove all work thinking and be 100% mentally available for your well beloved

5. Go to lunch outside.

< Isolation is the other major inconvenience to combat if you are affected by it. To avoid isolation a great solution is to integrate a social lunch with others. Try to do this at least once a week.  Even if not with someone else, try to go outside at noon somewhere there are other people.  Why not with other telecommuters?

6. Do co-working.

Co-working is the new trend that involves a shared working environment for people even if they have independent activity. It feels like your office, but it’s not. To make this work, the co-work area must be close to your home.

7. Don’t telecommute every work day.

If you telecommute every work day, you will progressively become more and more disconnected from your company’s culture and people.  It’s inevitable and it will happen.  Be sure to dedicate one or two days on site.  When on site, go to lunch with your colleagues.

Unless your boss is really a bad guy, you should reconsider the feeling. If it’s just that you don’t want to work for someone, don’t work at all. Because when you have your business you work for a boss much worse than your existing one: yourself. You will eventually work for many other bosses that really don’t care much about your feelings: your customers.

If you really love software development, if it’s what you are made for in life, creating your own company may be very disappointing. Today you do what you love (developing software) for most of your time. When you are an entrepreneur, you handle many other unpleasant tasks. You have no choice but to increase your work hours to be able to produce valuable lines of code. You will have to do lot of administrative tasks, handle customers (requests, complaints, questions, …), learn legal & accounting stuff, call people, sell your stuff, handle employees (requests, complaints, questions, …), think about tons of things at the same time … all of this increasing your overall anxiety and fatigue.

Here is a quick test to see if you, as a developer, are likely to succeed as an entrepreneur. Answer each question by true or false.

1. I dislike the sales part of the process and prefer to make the product

2. I’m a perfectionist

3. I won’t accept to be paid less than my market value for an extended period of time

4. I really like to take care of the details

5. I really dislike being criticized by other people

6. I don’t have any savings or personal investments

7. I have never been fired

8. I don’t have friends or family that run their own businesses

9. I am afraid of losing all my assets

10. I’m an anxious person

If you answered “True” at least three times you should seriously reconsider creating your company.

If you really want to start your own business, consider creating a consultancy company first, then create your products later. Many successful software companies started like this. It works because the services (much more easy to get money from) pay the bills while you develop your products. If the product fails, it is no big deal.