Last week employer reviews website Glassdoor.com released a beta version of a new tool that is poised to change how pay is negotiated, and I think it’s a game-changer in terms of how compensation transparency will continue to evolve in the years to come.
Know Your Worth, released October 18, uses Glassdoor’s arsenal of data on employers and employee reviews to help users generate their market rate based on location, years of experience and job title. Once a user inserts all that information, Know Your Worth generates a specific base salary figure that acts as that user’s estimated market value.
The tool also shows how a user’s market value compares to other jobs with a similar title in a given market, how that market value was calculated, as well as a list of jobs along with their estimated salaries that were used to generate the market value. Finally, a “salary explorer” tool allows users to compare how their market rate would change based on moving to another market, change in job title or years of experience.
This latest offering from Glassdoor comes as pay transparency remains a growing workplace issue. Glassdoor Inc. started in 2008 on the idea that a more transparent marketplace would help better match job seekers with jobs and companies they would love working for, and now the company is aiming to do the same by helping people gain a better understanding of what their worth is before looking for a new job or entering a salary negotiation.
The tool comes as others, including PayScale.com, employ similar tools, but in my experience Glassdoor’s is more intuitive.
There are many reasons why this tool, and others like it, will transform the talent economy. Here are a few of my thoughts:
- Most obvious, a tool like Know Your Worth will continue to contribute to the information symmetry that will make salary negotiations less one-sided. Historically, without a job seeker having an exact idea of what their worth is in the market besides knowing their current pay levels, employers have had the advantage when it comes to negotiations. Now, with a tool like this, job seekers are able to enter negotiations more empowered and with a more accurate picture of what they’re looking for. This should help job seekers earn salaries that are more in line with the market, as opposed to ones that are more in line with their ability/inability to negotiate.
- Second, this should help employers. With more information symmetry in salary negotiations, companies should have a better idea of where their positions stack up in their markets. Therefore, they’re now able to align their pay based on market circumstances and not on other, less objective factors, like on a person’s personality or unconscious bias.
- Third, tools like this will help gender pay equality. Now that all job seekers have a tool like this at their disposal, job seekers that may have been more likely to take a first offer may be willing to negotiate.
- Finally, I think with more tools like this starting to emerge, I begin to wonder how continued pay transparency will influence people’s lifetime earnings. With more accurate information at their disposal, you’d think people would go on to earn more over the course of their careers. By arming unequipped negotiators with more information about their worth, they’re able to enter every salary negotiation for the rest of their careers with information likely to help them earn more money over the long term.
Frank Kalman is Talent Economy’s Managing Editor.