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It is called salary compression, or wage compression. If you hire into a company 10 years ago and lets assume you are brought on at a fair wage but market wages may have exceeded that growth even with annual raises. Companies know experienced employees are the most valuable so they do not want to broadcast market wages they have to pay to say bring in someone junior. It is a difficult balance because it is entirely conceivable that a manager with 20 years of experience might have to pay more than they make to bring on an employee and employers do their best to not raise the rate of the manager, but force them to look for someone willing to take the job for less. Interesting though, where I work, they have to post salaries for H1B positions on a board and the 100K + these positions command makes heads turn.
Interesting, never considered that point. I imagine it does suck to hire someone at a higher salary than yourself. Who's fault is that? Just confirms the old adage about finding a new job every 3 - 4 years to keep your salary growing.
Let me flip this around. Why don't you just provide your salary expectation? That will save time as well, no?
There are always exceptions to the "norm" - but in general, there's the notion of not making the first offer. The whole "show your cards" dilemma.
And this is the same reason why we, as job seekers, would prefer to NOT give our salary expectation first.
We can spin it any way we want (and those reason are still valid) - but it's mostly about leverage.
Just my .02 of course.
Of course, it's a dilemma. But as for, "Why don't you just provide your salary expectation? That will save time as well, no?"....because the company is putting forth a job posting or job announcement soliciting candidates. People aren't just cold calling offering themselves saying, I want to work for you but I won't tell you what I want to make." The company is the one making the overture.
If the company is the one saying it has a job available it should say how much the job pays. People who want the job but might have to take a pay cut could still apply. But it would save time for the company because its HR people wouldn't have to waste time on people who are NOT willing to take a pay cut.
Of course, it's a dilemma. But as for, "Why don't you just provide your salary expectation? That will save time as well, no?"....because the company is putting forth a job posting or job announcement soliciting candidates. People aren't just cold calling offering themselves saying, I want to work for you but I won't tell you what I want to make." The company is the one making the overture.
If the company is the one saying it has a job available it should say how much the job pays. People who want the job but might have to take a pay cut could still apply. But it would save time for the company because its HR people wouldn't have to waste time on people who are NOT willing to take a pay cut.
It usually does by saying "depending on experience".
You do know that's not really what we're talking about right?
But OK...how about...
2-3 years work experience 40-50K
3-5 years 50-60K
5+ years 60-75K
Sure that gets more complicated and unwieldy.
HOW they state a range is up to them.
The company should state that -- period -- IMO.
I know WHY they don't. But it doesn't change my position.
The problem is if you keep pay secret what else is secret? I view procurement the same as hiring. At one point a company was telling me and staff that "We don't disclose employee names" um if I hire a crew of people I need to do a check to see they have the credentials. We don't hire anonymous people! Let's suppose there's an accident and OSHA needs to know what's going on...then what. If there's any potential interactions with youths and elderly I need background checks to ensure there's no criminality.
Keeping pay private only benefits the employer. Moreover if a company is publicly traded then it must disclose the compensation to shareholders. So if you really want to know just buy a share of stock and ask. Shareholder rights are above that of managers. I remember when I was in retail and there's this investment advisor that's on CNBC. What he was on the show and talked about the company it was OUR store representing the whole company (1400 or so stores). So yeah his opinion has much more of a impact on the company than a manager.
The problem with pay privacy is frankly it wastes alot of time if both sides are apart. If you are 10-15% apart that's one thing but it really wastes time by not having it. You can't force someone to work for 60K if the employee wants 75K. Employers are interviewing multiple people but people are applying for multiple positions. So if you don't disclose and some other place does you are at a serious disadvantage.
If it's a specific skill set that doesn't have many people you are going to lose out. It's one thing to say we won't raise wages, it's another to say we won't even say them.
it wastes alot of time if both sides[/b] are apart. If you are 10-15% apart that's one thing but it really wastes time by not having it. You can't force someone to work for 60K if the employee wants 75K. Employers are interviewing multiple people but people are applying for multiple positions. So if you don't disclose and some other place does you are at a serious disadvantage.
The thing is, it doesn't waste time for the employer. Keeping the pay secret is to their advantage. And they low-ball people offering less than they are making because some people allowed themselves to be seduced by all the promises made during the interview process and how great the company is by someone perky in HR. So they rationalize accepting the low-ball offer because they have the hopes to be in a better situation when in reality it is often worse. HR is evaluated by the offers accepted and being able to get them as cheap as possible. Their goal is not to get the best people and pay them their worth, and make them happy with a successful and rewarding career. That's your job to look out for yourself.
If the employer knows most people want $100K for the job, but low-balls and interviews 10-20 people and one finally accepts $75K because they believed the promises and allow themselves to be softened up the employer wins. HR is already on staff so there is no real additional overhead for them. And if they spend 5 hours total on each applicant making a grand total of 100 hours of HR staff time, that is worth it to save $25K a year now and going forward. It isn't just the lower base salary, it is also the lower raises, bonuses and 401(k) matching the company saves money on. People should know these things, but I see on the forums where people try to justify the lower pay by the companies and their methods, and how they will be better off.
If you do your homework, you should know what the salary range is for a position at a company. And more importantly you should know what your value is. And some companies simply pay lower salaries for the exact job and requirement than others, so don't allow that to determine your actual value.
Once again, this could all be solved by just posting a salary range on the application. Every job has a salary range, even if it's something like $50-90K. Most applicants should be smart enough to know that if they have only a Bachelor's degree and 1yr of experience, they are going to be towards the bottom of the range.
Quote:
Originally Posted by mascoma
That happened at my workplace when they were looking for a new exec. Plenty of people applied and then pulled out after interviewing and finding out that the pay was low. The month of vacation time they give every year didn't attract anyone.
Some companies can pull it off, some can't. My previous firm offered low pay (relative to other firms on similar contracts) they revealed when you review your offer letter and they still had plenty of applicants and long term employees because the location was in Germany. Location was the only leverage they had.
But yes, in general, I agree no one cares about the "benefits package" of a company if the pay is not at a level they expect. And it would save everyone more time for companies to be more transparent with their salary.
If the employer knows most people want $100K for the job, but low-balls and interviews 10-20 people and one finally accepts $75K because they believed the promises and allow themselves to be softened up the employer wins.
It's not so black and white. You're assuming everyone has the same salary requirements, wants top dollar for their services, and doesn't associate higher paying jobs with more stress.
You're also assuming the person who accepted for $75K, won't be out the door in 12 months as soon a they find something better. So no, I don't think the employer automatically wins in your scenario.
You would think, but surprisingly I’ve encountered people who expect the highest number in the range, even though their skillset, education, experience, and geographical location doesn't warrant that amount. I guess they see a company is willing to pay the high end, so why expect anything less. It can be very frustrating for a hiring manager to have to try and convince someone on why they aren't at high end of the range. Many unrealistic people.
If the first choice isn't being reasonable, then the company can move on to its second choice. Or third.
Each side knows the company is trying to get the best person for the least money. So, move on -- if after a true, decent, good faith negotiation -- the first choice doesn't agree to the salary.
Quote:
Originally Posted by RamenAddict
I know at my last job we had issues with people not getting the requested salary. They’d go back and forth for months and then the posting would expire by the time they realized that they could not come to an agreement.
Well then, to me, that's on the company for letting it drag on for that long.
Quote:
Originally Posted by HB2HSV
.....
Playing the Devils advocate here. Why should a company tell you what their range is? If they ask what YOUR range is, then they have the information and can decide if they want to continue to talk to you.
Alternatively, if your minimum is $100K but they tell you their maximum is only $85K. Do you have the courage to tell them you are not going to pursue this with them anymore?
Of course! There are candidates who do that everyday.
Can every applicant do that? Certainly not.
BUT -- if a person has a job already and is just putting out feelers...... or might want to leave where they are, but not enough for a pay cut or even high-enough raise (due to longer commute or whatever).....or even if a person isn't working, but has enough savings to maybe pass on a low offer because they are fairly in demand and have lots of other applications or offers that they expect -- they certainly can and do -- turn down jobs if the salary isn't right.
Quote:
Originally Posted by HB2HSV
Same question can be asked: should everyone's salary be public?
After all, it's "equal work for equal pay", is it not?
But what if YOUR salary is higher than your coworkers? Would you take a pay cut?
That's not really relevant, or what we're talking about though, is it?
Workers find out every day that a co-worker makes more or less than they do.
When that's found out, are those who make less than someone they feel does the same work, upset by that? Maybe. But what experience or education did that other worker bring to the company? Doing the same work doesn't mean they brought the same "benefit" to the company.
Besides it that work who's paid less doesn't like it they can ask for a raise or explore other options.
Maybe because at my age I'm already making more than I need, but if I found out I was making less than a colleague. Then it would still be all good. As long as I'm satisfied with what I make. I don't concern myself with what someone else is making.
I know for a fact I made less than someone who was doing less work than me, who called out often, etc. BUT that person had been there 25 years. I was newer. I was working harder. He was working smarter -- and he had more job knowledge and institutional knowledge than I did.
Some states are pushing disclosure of compensation. Boards such as Indeed now require it or will post their "average" which is often absolutely off.
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