A key point in the debate over whether to adopt more transparent pay practices is that employees are increasingly able to draw on outside resources to find out how their compensation compares to that of their peers, whether or not their employer chooses to share salary information internally. Companies like Glassdoor, Payscale, and Paysa are forcing greater openness when it comes to compensation; in fact, Glassdoor’s latest innovation is designed precisely for that purpose. Glassdoor announced the new product, called Know Your Worth, on its blog on Tuesday, describing it as a “free tool that uses patent-pending technology to calculate the estimated market value, or earning potential, of an individual, right now, based on characteristics of his or her current job, work experience and the local job market”:
“We wanted to make salary data more personal and combining with with advanced technology,” says Robert Hohman, co-founder and CEO of Glassdoor. “And for the first time, you can get a really precise prediction of what you can command in the market. Most people think that salary changes every couple years, but the truth is that salary can change every single day, demand for jobs changes every single day all of which we are in a position to see with Know Your Worth.”
The personal market value that Know Your Worth generates reveals the estimated base pay that you should expect to earn in today’s job market. If an employee finds their market value is higher than what they are currently making, you may decide to have a conversation with your boss to discuss opportunities for advancement and attempt to negotiate higher pay, explore other job opportunities, and/or remain where you are for the time being. The point is, you are in control and you have the information necessary to make informed decisions about your career.
A spokesperson for Glassdoor tells Fast Company’s Jared Lindzon that the tool, which is currently in beta and only available to employees in the US, is based on the site’s already massive trove of user data, and will only get more accurate in future iterations:
“It’s largely based on what others are sharing, but another large part of the equation is something no other calculator is doing, which is taking into account real-time job market trends,” says Scott Dobroski, Glassdoor’s community expert. “Glassdoor now welcomes about 33 million unique users each month, and we hold several million data points related to salaries from employees on about 600,000 companies in 190 countries,” he adds. This database is then combined with near real-time local labor market trends pulled from millions of current job listings, job transition data, local salary reports, and the number of job listings for that title, as well as application rates and click-through rates. …
Glassdoor’s Know Your Worth tool is able to provide market-value information for approximately 55% to 60% of the entire U.S. workforce today, with the intention to incrementally increase that percentage moving forward. “In most cases, this will be in very rare or obscure job titles, or in fields, locations, or areas where there is not enough data currently to calculate a market value for an individual,” says Dobroski of the remaining 40% to 45%.
Glassdoor’s CHRO, Carmel Galvin, opens up about how she was challenged to rethink pay communication when her organization launched the new tool internally. Here’s how she and Glassdoor’s co-founder and CEO Robert Hohman worked through the challenge:
1. Market Snapshot: Gather information about the market you compete in for talent. For us, this includes participating in formal compensation surveys, analyzing what we are hearing in our recruiting conversations, gathering data from exit interviews, looking at salary data posted on Glassdoor and now we will also use the data from the Know Your Worth tool. All of this combined gives us a market “snapshot.” Know Your Worth is a useful starting point from which to frame conversations.
2. Market Positioning: Next, we are considering where we want to position ourselves relative to that market and what our overall compensation philosophy should be. This includes factoring in the locations where we have offices and what those local talent markets look like as well as segmenting our workforce into different talent groups to be sure we are tailoring our approach where we need to and not assuming “one-size-fits-all” when it comes to market positioning.
3. Determine Pay Mix: We are also spending time determining the right pay mix, with the correct balance of base, bonus and equity elements, as well as considering where those fit into our overall rewards program. The reality is we don’t typically come out on the high end for base pay because of our other compensation elements. This means in many instances our employee estimated Know Your Worth market values exceed their current base bay. The reality is, many of our employees could likely earn more base pay at another company, but we think Glassdoor’s total compensation package in aggregate is very competitive.
4. Communicate: Lastly, and very importantly, we need to think about how we communicate with managers and employees about our total rewards approach so that they understand what that means for them both now and in the future.