I was on a team of 2 and underpaid for my YOE. My boss gave me the standard speech about the company not having the money to increase my comp, and said the company wouldn't be able to counteroffer anything I interviewed for.
I was doing interview prep and my coworker gave notice. I told my boss the range I was interviewing for, and got a comp adjustment the next day. It was a 60% raise.
If I were you I would have left that place even with the raise, or stuck around just long enough for me to get another opportunity. Clearly they don't value you unless you force they hand. Why stick around for that?
My approach to interviewing was basically reject any companies paying under X, and slowly increase X over time as I got practice interviewing with the easier companies. I was only interviewing with one company that could pay X, and they didn't end up giving me the offer.
I like my coworkers and the work I'm doing, but mainly my current company came in with the highest offer.
I was doing interview prep and my coworker gave notice. I told my boss the range I was interviewing for, and got a comp adjustment the next day. It was a 60% raise.