Salary Transparency is Coming Like a Freight Train… Get On Board or Get Run Over

Keep Salary Expectations on Track Through Transparenecy

By revealing company salary ranges and fostering a salary transparent society, companies immediately begin accruing both short-term and long-term benefits. Integral to the process is an introspective analysis that creates a greater understanding of what the company values and what they don’t. Companies with clearly defined parameters receive more targeted interest from candidates who have identified the company as being able to fulfill their needs. Interviewing and on-boarding processes are elevated by data-driven discussions. On the job, fewer doubts about compensation frees up employees’ mental energies to focus on the tasks at hand. Employees are also better able to visualize the long-term benefits of remaining with the company. A company opening its books and revealing specific salaries and salary ranges in terms of location and experience level may seem as if it is shooting itself in the foot in the short run, but, given the long view, salary transparency enhances productivity, retention, and quality.

Chris Bolte
Chris Bolte, CEO & Co-Founder at Paysa

While nobody expects companies to universally release every one of their employees’ compensation-related data for the general public to scrutinize, several companies are already doing so. Buffer, creator of a social media management tool, releases up to date salaries for each employee. Companies and individuals wary of an invasion of privacy will appreciate the middle ground Buffer took a stand on with a salary calculator it developed that incorporates factors such as a candidate’s role, experience level, desired location, and preference for higher or lower risk compensation package (equity vs. salary). There are a number of available options when it comes to salary transparency methodology.

Making Progress Toward Transparency

Regardless of the path a company chooses, the track leading toward long-term success involves several stops along the way that facilitate salary transparency and better-informed candidates. In any company, there will always be individuals determined to fight sharing salary-related data. Pushback from guarded employees and well-meaning human resources personnel may result in a temporary thinning of the ranks. The potentially painful transition to providing salary transparency is streamlined with thorough preparation involving organizational introspection and deep market research. First, companies must delve deep into their own needs to understand what skills, traits, and experiences are important to the company. Dissect these components to ascertain why they hold value. It should be apparent what each skill, trait, or experience adds to the company, leading to its continued success.

Before leveraging the benefits of salary transparency, companies must clearly define their compensation processes. Companies must determine the average salary for each position and clarify how those are established. Companies should be able to explain why an employee’s compensation falls at a certain spot within a range. What an employee needs to accomplish in order to move up within a pay range must be clear and transparent. Candidates approaching a company with well-defined values and needs should carefully assemble a portfolio that highlights their skillsets, character traits, and experiences as related to the value they will contribute to the company.

Salary transparency should inform the interview process as well. Those company needs should be juxtaposed against the backdrop of the broader market’s needs. Market research and analysis should lead to establishing updated benchmarks pertaining to skills and experience. Because market values change rapidly, especially in the tech industry, relying on dated benchmarking techniques with a narrow perspective cripples the hiring process and sets companies up for failure from the outset.

Salary Transparency Enhances Long-Term Productivity

The effort required, the difficulties to overcome, and pushback from both outside and within shouldn’t deter a company from achieving salary transparency. In addition to ameliorating conditions for employees, companies benefit in numerous ways from both individually and collectively enacting initiatives that promote salary transparency. Beyond simply staying relevant to the needs of the next generation of job seekers, companies that promote salary transparency have a better understanding of their own values in terms of desired skills, which makes hiring easier. Once an employee is on-boarded, conversations about their value to the company, as well as how to enhance it, are much more data-driven. Providing access to data on salaries, not only within the company, but across a market segment, also dispels any doubts regarding compensation. Rather than focusing on whether or not they are getting paid adequately, employees focus on doing their job and growing their career. This improves both productivity, as employees know what the company values and how they can impact that, as well as retention rates, as employees are more productive and rewarded, while less likely to leave looking for a better deal.

While salary transparency may result in companies losing control over salary negotiations and other minor aspects of candidate interviews, it generates real benefits that extend to employees, the company, and beyond. Salary transparency not only contributes to rectifying societal wrongs, such as gender and ethnic wage gaps, but also helps individuals both understand their present salary and see more clearly the track toward greater pay. For companies, salary transparency is an invaluable tool that enhances hiring, as well as long-term employee satisfaction, retention, and productivity.


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Increase Your Response Rate to Job Candidates

Be Relevant

The days of sending generic recruiting emails (We’re Hiring!) to potential candidates, hoping that someone actually responds, are coming to an end… and it cannot come soon enough.

Candidates, especially the best ones, are increasingly exhausted and frustrated by the deluge of generic emails they get from recruiters. Generic emails go where they should – in the trash, with the sender either blocked or relegated to SPAM limbo.

It does not need to be this way though. Today is the day you get relevant, right up front, and with relevancy comes response.

Consider: In our research at Paysa, as well as our years of hiring thousands of people across many companies, we have found that people take jobs based on five factors:

  1. Salary: Will I make a competitive salary?
  2. Team: Will I be working with people that I can learn from, that I can respect and trust, and reversely, will I have the ability to contribute and teach?
  3. Impact: Will my skills and experience be leveraged in a way to make an impact?
  4. Future growth: Will this position help me grow my career?
  5. Company: Am I excited about the prospects of the hiring company?

If you want to drastically increase your response rates with candidates as well as your hiring success rate, anchor your communication in these areas from the outset.

Too many recruiters and/or hiring managers hide much of this information until the end (often bitter) which can result in no response, or even worse, a disconnect in the position match.

Relevancy = Response. Start early.

In our experience, the perfect job candidate email contains a mix of the following information:

Money: What can the candidate expect to make? By creating a ‘fake’ profile (skills, experience, education) for your candidate on Paysa, you can determine what they are making at their current company. Using this information, you can better position the salary of the new job: “Opportunity to make more than you are making today”…

Skills: Highlight the candidate’s core skills and experiences that make them a such a good match. Give the candidate a sense for how those skills and experiences are needed by the hiring company, and subsequently their ability to make an impact. What new skills will they be acquiring and what is the market value of those skills?

People: Let the candidate know the background of people they will be working with at the company. How good is the team? Paysa’s CompanyRank is a great tool for this – it measures and tracks the density of technical talent of companies over time.

Company: Tell the candidate what is special about the hiring company – it could be size of the company, customer or data access, market opportunity, the people, etc.

While it takes more time to create targeted emails, the results will be worth it. Happy hunting!

About the Author

Chris Bolte, CEO & Co-Founder at Paysa

Chris Bolte, CEO and Co-Founder of Paysa.

Chris is passionate about helping employees maximize their value across the arc of their career.

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Recruiting Can Be a Messy Process, But It Doesn’t Have to Be

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Recruiting can be a messy process, both on the candidate side as well as on the employer side, filled with lots of wasted time, misconceptions, misalignment, and general frustration. Fear not though, it doesn’t have to be so hard, not anymore.

How often does a hiring manager scope out a position that she wants to hire, including the most desired skills & experience and then, when the recruiter comes back with the suggested salary for that role, the hiring manager and/or the CFO freaks out… saying that the salary is a) outside of the budgeted salary and b) is not realistic with the market. The recruiter is then tasked with compiling competitive salary info and possibly even start interviewing candidates only to have the hiring process go sideways when comp is discussed.

Chris Bolte
Chris Bolte, CEO & Co-Founder at Paysa

With an application like Paysa, a hiring manager and/or recruiter can immediately see what the market salary would be for their desired candidate. Further, they can adjust the requirements (remove non-critical skills, change title, revise education requirements) as well as adjust what companies they want to extract candidates from – and see how the salary changes.

Buying a car is similar process: If you are anything like me, you start with the fully loaded version of the car… I want the sport version, premium sound, leather dashboard, automatic seats, special paint job, etc. Sounds good doesn’t it? How much is it? Yowza! Sticker shock! – No way I can afford that! Ok, lets get real… get rid of the sport version, special paint job, leather dashboard, but keep the premium sound… now what does it cost?

Now you can do the same thing with people.

Go to Paysa and create a fake profile for your perfect candidate. List all the skills you want that person to have, the title, experience, education and degree – including their school, as well as the company you want to pull from. Here is an example of an employee at Google – they graduated from Stanford with a PhD in Computer Science, have 10 years work experience, have been at Google since 2010, and are currently a Software Engineer Level 3. This person is estimated to make $285K per year.

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Too high for your budget? Adjust the profile – I changed the school from Stanford to UCLA, moved the PhD in Computer Science to a Master’s degree, moved them from Google to Yahoo, and cut back their experience from 10 years to 6. New cost: $216K annual – a savings of $69K, almost 25%. That may be more in-line with your budget.

Now, the recruiter and hiring manager have a realistic set of requirements for their candidate, as well as what that candidate is going to cost the hiring company. From here, the recruiter can more easily identify those candidates that fit the profile as well as their expected salary.

Recruiting can be a messy process, but it doesn’t have to be figuring out the right salary for a position.

Next up, how Paysa can help recruiters and companies increase their ‘open rate’ among target candidates…

About Author

As CEO and Co-Founder of Paysa.com, Chris is passionate about helping employees maximize their value across the arc of their career.

Find Chris Bolte on LinkedIn.


If you want to share this article the reference to Chris Bolte and The HR Tech Weekly® blog is obligatory.