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Glassdoor’s Know Your Worth tool is latest advance in salary transparency movement
Corporate recruiters and HR departments should get used to the idea of being open about salary in the hiring process as the pay transparency movement gains momentum, driven by a generational shift in the workforce and easier access to compensation data available online.
Employer review site Glassdoor is the latest to announce a pay data transparency tool to bring workers' market worth to light, providing job seekers with information to embolden them to negotiate compensation before accepting job offers.
Laura Sejen, a managing director in Willis Towers Watson's New York office and leader of the firm's global rewards practice, said she's telling companies they had better prepare to be more transparent about pay and the basis for pay decisions because increasingly candidates and the existing workforce are going to demand it.
"Employees around the world are constantly trying to understand their earnings potential, competitiveness and level of pay relative to peers," said Josh Bersin, principal and founder of Bersin by Deloitte, Deloitte Consulting LLP. "Tools that enable salary transparency and use analytics can give employees amazing new insights into earnings potential, point out inconsistencies and give employers new signals on their compensation programs to attract great people."
Robert Hohman, Glassdoor co-founder and CEO, said the company's new offering differentiates itself from salary database competitors because of the sheer size of data Glassdoor has accumulated, as well as its "real-time pulse on millions of job openings and insights into probable career transitions for employees."
How Glassdoor's Salary Tool Works
The tool, currently in beta testing, provides a customized personal market value based on the user's job title, company, location and experience. It also analyzes current supply-and-demand trends in local job markets. Each person's market value and pay range is kept private, and the figures are recalculated weekly and tracked over time.
The salary estimator calculates the market value for 55 percent to 60 percent of the U.S. workforce within an approximate 12 percent median margin of error rate, according to Glassdoor. As more salary data is collected, the machine learning algorithm will become smarter. The company also expects the accuracy and reach of market values to improve in the months and years ahead.
"Job seekers can use this tool prior to filling out an online job application that asks for a salary requirement," said Melissa Llarena, an interviewing and career coaching expert and the owner of Career Outcomes Matter, based in the New York City area. "It's helpful to see what numbers are out there in a particular geotarget because location matters when it comes to reasonable compensation ranges."
Job seekers can also figure out whether or not to apply to a job based on a given salary range, Llarena said. "It takes real effort to effectively apply to a role, so this helps applicants filter out the opportunities that would not enable them to maintain a desirable quality of life."
She added that Glassdoor's tool in particular helps target jobs of interest as it suggests local job openings that might provide a higher base salary for the same position or locations where users could be earning more. Future versions of the tool may include education, gender and nonsalary compensation such as tips, commission, bonuses, benefits and stock equity to provide a more personal and relevant calculation.
Get Used to More-Informed Inquiries About Pay
Corporate recruiters will have to monitor Glassdoor even more than they did before, Sejen said. "Candidates will almost certainly have availed themselves of this information, and if it reinforces what your compensation team or hiring managers have conveyed as within the desired hiring range, that's a happy thing. But if there is a disparity between what the company is hoping to offer and what is on Glassdoor, you have to make sure you have your ducks in a row in terms of the basis for your hiring range."
Sejen said most companies already conduct fairly robust market analyses, access surveys relevant to industries and geographies, and maintain some form of construct around pay that guides salary-offer decisions.
"An infrastructure exists, but what is changing is that HR will have to be able to talk about it more openly," she said. "Companies will need to be more assertive in their statements about the ongoing processes that are in place to ensure that pay is competitive and fair."
[SHRM members-only toolkit: Using Salary Survey Data]
Caveat to Using Online Pay Data
Glassdoor's tool and other online salary estimators can be valuable resources for job seekers, but experts caution that these tools shouldn't stand alone.
"As with PayScale and all of these tools, they need to be one part of the information that candidates gather," said Pete Radloff, a Washington, D.C.-based technical recruiter for market research firm comScore and a talent acquisition consultant with exaqueo.
"Candidates will often express that 'X' is what their market value is, and the first question I ask is how they arrived at that number. I often caution them on being too hard and fast on a number because there are so many variables in play—from base salary, bonuses and stock to how much the employer pays for health care benefits, paid time off and work/life balance."
But Radloff doesn't discount their research. "I think a candidate who does their homework makes a positive impression," he said. "I'd rather speak with a candidate who has some sense of market value but is flexible enough to know that it's just a starting point."
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