Tag Archive for: #compensationgap

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#YourCareer : Here’s How To Understand If You’re Getting Paid Fairly. Questions: Are you Paid Fairly? OR Do You Know?

March 15, 2024/in First Sun Blog/by First Sun Team

Are you paid fairly? You probably don’t know, and that’s the case for the majority of candidates. Some states, like California and New York, have laws to mandate salary transparency, but many times, companies don’t share salary data and calculations with candidates.

The reality is the details that go into calculating employee compensation involve several nuanced inputs, such as individual experience, company profiles (e.g. revenue or funding), and market dynamics. Candidates often find themselves scrambling to validate their salaries by calling friends who work in similar fields or by browsing various unverified online resources like Glassdoor, Reddit, Levels or Blind – which are typically inaccurate, outdated, or miss nuances.

Today is Equal Pay Day, which is no accident. This date symbolizes how far into the year women must work to earn what men earned in the previous year. The wage gap is highlighted with women earning 84 cents for full-time, year-round work according to a report from the U.S. Census Bureau. While the exact day differs every year, it serves as a reminder that while equal pay is a conversation that concerns everyone, it continues to remain a real issue for women and many minority groups. The lack of accurate salary data disproportionality hurts women and underrepresented minorities from negotiating their pay fairly.

AJ Thomas, Global Head of Talent Experience at X, the Moonshot Factory and a strong advocate of pay equity, recently told me that “Transparency in pay isn’t merely about unveiling figures; it’s about nurturing trust, equality, and responsibility within an organization, illuminating the path for fairness and collaboration to thrive.”

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Article continued …

How Companies Create Offers

It’s important to understand how companies create offers to better negotiate your pay. Many candidates do not grasp the process businesses follow when assembling an offer for a new hire. Candidates can also fixate on one component of total compensation, such as base salary, and may not consider all aspects of total compensation including benefits and time off entitlements. Generally, total compensation includes some form of short term incentives in the form of base salary and variable pay like bonuses. Some companies, especially in tech, may also include long-term incentives like equity in the company.

An offer is is generated by taking into account the following key elements:

1. Following a company-established compensation philosophy

A compensation philosophy is a business strategy that guides all decisions related to candidate and employee total compensation. It serves as the foundation for pay equity, guiding teams in crafting offers and determining the company’s stance on a role’s market value. Most compensation philosophies are defined by a percentile. For example, if the top of the market pays approximately $100,000 as the base salary for a specific role, and the company’s compensation philosophy aims for the 65th percentile, the business will likely offer around $65,000 as the base salary for that role. Starting a candidate at a specific percentile also allows for growth within their role and rewards for performance over time. These percentiles can also be applied to bonus and equity calculations.

2. Paying for employer-only compensation datasets

Businesses pay for access to employer-only compensation data sets, allowing companies to exchange information about every employee’s salary for industry benchmarking data. Such exchanges enable a deeper understanding of the compensation other companies offer for each role.

Comparing these employer-purchased data sets with the data available to candidates from their network is akin to comparing David with Goliath. While both provide salary information, only one offers a level of accuracy that is comparatively more reliable.

What Can Candidates Do Today to Get Paid Fairly?

So what can you do? The reality is there is no solution for candidates to get accurate information, but here is what you can start with:

1. Ask the company to help you understand their compensation philosophy

Employers often share their compensation philosophies with candidates, although most candidates do not request this information. You can also request assistance in modeling your equity over time. Remember that you should consider all aspects of your total compensation, not just base salary.

2. Do your own research

You should do your own research to best understand the compensation details in your offer. However, it’s important to remember that your research will be based on limited data points that excludes nuances that contribute to your total compensation, such as the internal compensation philosophy.

3. Understand trade-offs: Compensation is not everything

It is important to consider your career goals as you evaluate your offer. The highest compensation may not provide you happiness or fulfillment. For example, I accepted a reduced salary when I switched my career from strategy and operations to the field of Human Resources mid-career. This trade-off eventually paid off several times over after 5-6 years, and also led me to a role I am extremely passionate about.

Looking ahead

The reality is there is no place today for candidates to get accurate salary data that is trusted and verified. Companies only collect and sell market data back from businesses, leaving the employees stranded. As the pendulum will eventually shift back to becoming an employee-driven market, there is an opportunity to help candidates access this data.

I believe that one of the ways to improve pay equity is by providing candidates with a holistic set of data points that is personalized to their role, company and market dynamics. I see a future where AI can help ingest large data sets with the specific job you’re applying for, analyzing market data, and generating a potential compensation and benefits package tailored to you. While there are several complexities involved in making this a reality, I envision a world where salary information can continue to be democratized, thereby helping to bridge the equal pay gap.

I recently discovered FairComp, which intrigued me as they are aiming to build a verified compensation database for consumers vs. organizations. Their initiative claims to help you understand if they’re being paid fairly by using data supplied by employees and verified through technology. I am curious to see how this plays out and the possibilities for other similar tools to follow. I also hope this will encourage existing compensation survey organizations to consider making their data available to consumers in the future.

Forbes.com | March 12, 2024 | Q Hamirani

Your #Career : What to Do About a #PayGap at Your #Workplace ….It Happens All the Time. Someone Who Has Just Been #Hired, or Hasn’t Worked for a Company for Very Long, Makes More Money than Someone Who has Been There for Many Years & Proven Themselves to Be a Valuable Employee.

April 13, 2018/in First Sun Blog/by First Sun Team

It happens all the time. Someone who has just been hired, or hasn’t worked for a company for very long, makes more money than someone who has been there for many years and proven themselves to be a valuable employee.

For instance, there are many instances where a male is going to earn more than a woman who has more training and experience. Have you found out that you are earning a lower salary than someone who is a more recent hire, or has less experience than you? If so, it may be time for you to look for ways to be able to do something about it.

Don’t Blame Co-Workers

First of all, you need to remember that it is not your co-worker’s fault that they are being paid more than you are. Yes, you can be angry, but it is never a good idea to confront a co-worker about their salary. All it does is cause both of you to feel uncomfortable, and it causes a lot of anger in the workplace. Instead of being angry at them, use the fact that they are earning more as a reason to ask for a raise.

One thing that you should never do is ask your co-workers what they earn. Unless you are making comparable salaries, someone is going to end up angry because they are being paid less than others. This can lead to conflict within the team, and a lack of productivity that is not going to help you get the raise you deserve.

Learn About the Equal Pay Act

If you are a woman, it is important that you know about the Equal Pay Act. This act prohibits employers from paying women less than their male counterparts when they have the same amount of experience. If you are not a woman but are a minority, you may be eligible for some form of protection. If you think that you are being discriminated based on age, gender, or disability, the best thing to do is to contact the US Equal Employment Opportunity Commission (EOCC).

Unfortunately, most other employees have no legislative coverage. If you are not in one of the above-mentioned groups, you will need to consider your situation and decide whether you should address the issue with your employer.

Do Your Research

Before you walk into your boss’ office and ask for a raise, do some research as to what you should be earning, based on your training, experience, years with the company, geographic location, etc. If you do know for a fact that some of your co-workers are earning more than you, this is good information to be able to arm yourself with. Of course, as mentioned, it is not a good idea to ask co-workers about their salaries.

Just because you shouldn’t ask co-workers about their salaries, it doesn’t mean that there aren’t other ways to find out. For instance, if you work for a university or a public company, some of the salaries are going to be public information. Or, there may be an association for your particular industry that offers surveys about salaries. It is a good idea to research salaries at least once annually.

Consider Your Approach

One of the most difficult things about asking for a raise is how to approach the situation in the first place. It is never a good idea to ask if the company is going through a transition period, as the money just isn’t going to be there. You also need to be able to gauge your employer’s mood. If you get them on a bad day, you aren’t likely to get what you ask for.

When you do decide to approach your employer, don’t go in making demands. That isn’t going to get you anywhere. It is better to negotiate. Tell them why you feel that you deserve a raise, and have confidence in your own value. This is going to get you a lot further than just going in and saying you want a raise, or else.

Negotiate for More Responsibility

It may be that you are being overlooked for a lot of big projects at work. If this is the case, instead of asking for a raise right away, try asking for more responsibility. “Ask to be put on the teams that are doing the big projects, or to do an extra project on your own. Ask if there are training opportunities, and if not, take outside courses and workshops to gain more skills and knowledge,” suggests training manager at IGotOffer.

If you are given the opportunities you seek, don’t waste them. If you are getting training, take in every ounce of information possible. If you are given bigger projects to work on, show them what you are really made of. These are the things that are going to put you in the running for a raise, or even a promotion.

Set a Deadline

What will you do if your employer says that they will give you a raise, but they never follow through on their promise? Or, what if the company just can’t afford to give you a raise at this time? You can only wait for so long before you are going to become even more disenchanted, and your work is going to suffer because you will stop caring.

It is important to set a deadline for what you want. For instance, if you have been working at your company for more than a year without a raise, you may need to decide that if you do not receive a raise within the next six months, this may not be the company for you.

Consider Your Options

If you are not getting the raise that you deserve, or other forms of compensation such as extra vacation time, a paid bonus, etc., it may be time to start considering other options. There are other companies out there that will value your experience and skills, and be willing to pay you the salary you truly deserve. Basically, if your current employer doesn’t see your value, find one who does.

Glassdoor.com | April 13, 2018 | Posted by Jane Hurst