But the salary data that’s available online to me as an employee is imperfect and extremely limited. This would be like if every employee of a major company sent their exact salary and demographic information to levels.fyi, which would never happen because it’s an insane sacrifice of privacy
Huh, this tacit collusion being legal thing is mind boggling.
The law firm example seems imperfect though. Publicly announcing that you’re raising salaries isn’t really the same as internally sharing that data and choosing to set the same salary based on that.
>Huh, this tacit collusion being legal thing is mind boggling.
Not really ... If you're looking to hire workers in a particular region, how do you know what a competitive wage is? Well ... you look at what similar firms are paying their workers. How do you know what similar firms are paying their workers? You read surveys, industry reports, public statements, etc.
Nothing about any of that means you cannot offer a higher or lower salary for the same position.
Information is either internally confidential or it's not. If the latter then it's very reasonable to expect other firms to take actions based on that information.
I guess my issue with all the “it’s just info” arguments is this. Employers inherently have an information advantage in salary negotiations. A tool like Pave drastically increases that imbalance.
How am I ever going to realistically negotiate salary vs a company that has this level of information (even during performance reviews)? And frankly something that worries me is, what level of data are they getting? If it’s tied to your HR system, does it get anonymized performance reviews? If every company can perfectly profile me and place me in an expected salary, I as the employee give up all my power. That’s strictly bad for me
Your salary negotiation point speaks more to a call for open salary data, which many people have been arguing for.
You're missing a lot with your second point though. If a company has excellent salary data and can put in you a band, then it also means that you have better grounds to argue for raises when you gain experience, or argue if you are underpaid, or even find jobs at companies who intentionally pay a higher percentile to market as a way to attract better talent.
In contrast, if we all operate 100% blind with no data, as many here seem to want, it would lead to all sorts of unfair wage situations with people doing equivalent jobs earning vastly different amounts. This sort of environment is biased towards more aggressive people who have strong social skills when it comes to negotiation. In fact, you see exactly this when companies choose not to buy data like this to set their bands.
I super agree that fully open salary data would be amazing.
On the second point, I would argue that you have very little ability to determine when you’ve gained enough experience as an employee to argue for a raise. Whereas an employer with access to Pave has a _ton_ of ability to determine whether you have or have not. Yours is based entirely on personal experience and feel, plus maybe talking to a few coworkers. Theirs is based on aggregated data from thousands of employees
In many tech companies there is a skill matrix and competency attached to jobs, and these are tied to compensation bands. Often these skill matrices are given to employees too. When someone complains that they are not being paid fairly or that they are working at a higher level, these skill matrices are used by management to double check that the right hiring/raise decisions were made.
Mistakes get made and not all managers are the same, but believe it or not there are companies where senior management does try for consistency and fairness in how they set compensation. These companies also often have internal studies run that check for biases or oddities in compensation. E.g. which departments are above the standards, which are below, which are not progressing juniors enough. Without data all this is impossible. You can't build a fair, objective, and especially not transparent system without data.
>What level of data are they getting? If it’s tied to your HR system, does it get anonymized performance reviews?
Pave user here. Absolutely not. It's anonymised comp data. Essentially salaries and job titles only.
Whilst I do agree with your point that data like this should be publicly available, I'm not sure I understand how it gives employers a negotiation advantage?
I'm asking this as someone with 0 legal knowledge: doesn't the context matter? If every company takes this data and is like "we want to pay at the 95th percentile" (which is what they all do), that seems like wage fixing even if they're not all agreeing to it together.
If they’re all shooting for the 95th percentile and have up-to-date data then you certainly won’t have fixing; rather you’ll get insanely rapid wage inflation!
It's possible the purpose of wage benchmarking companies is to allow bosses to say they pay the 95th percentile - which is useful to be able to say, when someone at an all-hands Q&A asks about raises and bonuses.
Then the benchmarking company simply has to define 'comparable roles' broadly enough to give the customer the result they want.
That's what my employer does. The head of our HR team got in front of the entire company and said that they aim for 50th percentile for everyone in every pay band. It instantly made me want to job hop, tempered only by the million things I have going on in my personal life that have a better expected value than a 5 or 10k pay bump.
That's... hilarious. We all know they are thinking that but to say it loudly and proudly to the employees is a self own on a level that makes me Cheshire Cat.
> If every company takes this data and is like "we want to pay at the 95th percentile"
It's thought by some that this is how CEO compensation has gone up so much: Corporate boards of directors have compensation committees, which are fed survey data about comp ranges; a comp committee will say, "We want our CEO's comp to be in the top quartile" — which, as time goes on, leads to an inexorable upward ratchet effect.
I think some basic math knowledge would help more, if every company paid at the 95th percentile then it wouldn't be the 95th percentile, it would in fact be the average. But no, these distributions are not flat like that, there is a large spread and "by definition" of the 95th percentile only a few companies pay at that rate.
If you opened up a business selling water bottles, you'd probably check what price water sells at across brands, then decide in which segment to price it.
"I want to sell my water at the upper end and market it as a gourmet brand"
