In a new study, the pay transparency and compensation data analysis site PayScale surveyed over 160,000 US employees to find out who is asking for raises, who is getting them, and what determines whether a request is granted. It will come as no surprise to leaders versed in the challenges of diversity and inclusion that the survey turned up gender and racial gaps, not in how likely employees were to ask for a raise, but rather in how successful they are in getting them, Aimee Picchi reports at CBS Moneywatch:
Compared with white men, people of color are significantly less likely to receive raises when they ask supervisors for more money. The reason may boil down to bias, although it’s unclear whether it’s due to overt or unconscious bias, said PayScale Vice President Lydia Frank. … Women of color are 19 percent less likely to have received a raise than white men, while men of color are 25 percent less likely, the analysis found. The research found that no ethic group was more or less likely to have asked for a raise than any other group. …
Workers are often told it’s up to them to ask for a raise, but the findings suggest that employers should scrutinize their own processes for distributing pay hikes, Frank added. “If people don’t receive the same consideration, employers have a responsibility to ask how do we ensure everyone is treated fairly,” she noted.
The study did find a meaningful difference between men and women in terms of rationale among those who don’t ask for raises, with 26 percent of women saying they didn’t ask for a raise because they felt uncomfortable negotiating their salaries, compared to 17 percent of men. Still, the study doesn’t support the notion that women experience pay gaps because they are less likely to negotiate their pay; PayScale notes that it found ” no statistically significant difference in the rates at which women of color, white women, men of color and white men ask for raises.”
The practice of basing a new hire’s salary offer partly on what they have earned in the past has become controversial in recent years in light of the theory that this practice may encourage pay inequities to persist throughout an employee’s career. In 2016, Massachusetts became the first US state to bar employers from asking candidates for their salary histories in an amendment to its equal pay law, and other states have followed suit, including California, Delaware, and Oregon, as well as New York City.
Despite the proliferation of these bans, a recent survey from WorldatWork finds that most employers are still using salary histories as a factor in their pay negotiation process in locations where they are still permitted to do so. While 37 percent of employees surveyed said they had prohibited the practice in all their US locations, 35 percent said they did so only in areas where state and local bans exist and 27 percent said they do not operate in any of these areas.
Smaller organizations were the least likely to ban the use of salary histories nationwide, WorldatWork found, with just 25 percent of organizations with under 500 employees saying they did (49 percent said they did not operate in any locales with statutory bans). Large organizations, in contrast, have done so at greater rates: 46 percent of organizations with 10,000 employees or more said they had stopped using salary histories nationwide, while 37 percent said they had dropped them in jurisdictions where bans are now place.
From last year’s US presidential campaign through January’s inauguration and the early days of Donald Trump’s presidency, there have been some noticeable differences between men’s and women’s opinions and expectations in the new administration. In some cases the differences are pretty stark: Data from employees surveyed across the last quarter as part of CEB’s forthcoming global labor market survey reveal that men are dramatically more optimistic about their career, compensation and benefits opportunities than women are.
Twenty-nine percent of men expect their career opportunities (measured as promotion, increased in compensation, and improved benefits) to improve compared to 21 percent who expect it to worsen. By comparison, 19 percent of women expect their career opportunities to improve under a Trump administration, while 27 percent expect them to get worse.
But career opportunities aren’t the only place where we are seeing differences emerge. Washington Post columnist Jena McGregor passes along an alarming discovery about how the behaviors of men and women have changed in the workplace after the election:
For a while now, Glassdoor has made no bones about its mission to help employees go into salary negotiations with a better understanding of what to ask for. Its Know Your Worth tool, launched last October, helps candidates approximate their earning potential “based on characteristics of his or her current job, work experience and the local job market.” Glassdoor has been criticized, however, for telling employees they are underpaid based on an analysis that doesn’t take into account all forms of compensation.
Now, the company is attacking the same objective from the other side. Many job advertisements don’t include information about pay, but in a new feature revealed on Thursday, Glassdoor’s job listings will now include an estimate how much a listed job should pay, based on what the company’s machine learning algorithms know about similar positions in the local market:
Starting today, many of Glassdoor’s job listings for roles in the U.S. that pay annual salaries and hourly rates will include a base salary estimate calculated from millions of U.S. employees and third-party sources using patent-pending machine learning algorithms. Ultimately, we believe this is a key step forward in helping connect you with the job that fits your life.
Philadelphia Mayor Jim Kenney signed a measure earlier this week banning employers from asking job candidates for their salary histories, a step intended to help close the gender wage gap, even though local employers are strongly opposed. Comcast has even threatened to bring a First Amendment lawsuit against the city, ABC reported:
Democratic City Councilman Bill Greenlee, who sponsored Philadelphia’s bill, said he was inspired by a Massachusetts pay equity bill signed into law last summer that included a ban on asking for salary history. “It’s reasonable to think if you take this question out of the equation it could help lessen wage inequality, and it’s worth a chance,” Greenlee said. “We’re trying to ensure fairness.”
However, Comcast and the Chamber of Commerce see the bill as yet another hassle in bringing business to Philadelphia. “The wage equity ordinance as written is an overly broad impediment to businesses seeking to grow their workforce in the City of Philadelphia,” Rob Wonderling, president and CEO of the Philadelphia Chamber of Commerce, wrote in an opinion piece to a city business journal this month, adding it “infringes upon an employer’s ability to gain important information during the hiring process.”
Massachusetts’ law, enacted last August but not yet in effect, may have started a trend around the country. In November, New York City’s Mayor Bill de Blasio barred municipal agencies from asking for salary histories, and earlier this month New York Governor Andrew Cuomo did the same earlier this month. A few House Democrats even proposed a federal ban in September, but that plan didn’t get anywhere in the previous Congress and is unlikely to gain traction in the current one either.
The purpose of such bans, one advocate suggests to Employee Benefit News’s Amanda Eisenberg, is not so much to put women on a more level playing field in salary negotiations as to change how salary is negotiated in the first place:
When Glassdoor released its Know Your Worth pay comparison tool for US employees in October, the pay transparency site promoted it as a way for employees and job candidates to overcome the information gap that can put them at a disadvantage in salary negotiations by finding out precisely what someone with their experience and skill set can expect to be paid in their local job market. Based on the data the tool has collected in the two months since, Glassdoor now claims that most American employees are earning about $5,000 less than they are worth, as Amy Elisa Jackson reveals on Glassdoor’s blog:
Since launching in October, Know Your Worth by Glassdoor has provided hundreds of thousands of estimated market values for American workers taking into account personal characteristics like current job title, employer, current base salary, location and years of relevant experience. Using that as well as relevant open jobs in the market, we have seen that the majority of users are underpaid by about $4,700, when simply looking at base pay. Those underpaid include employees from companies like Amazon, Oracle, Bank of America, Walmart and Boeing.
But by looking at base pay, is Glassdoor getting a full picture of employee compensation? Kris Dunn thinks not. At Workforce earlier this month, he delivered a harsh critique of Know Your Worth, calling it “a product that is incomplete, but that won’t stop Glassdoor from telling your employees it gives you a 100 percent accurate read”:
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: