The Problem with Glassdoor and other Salary Data Sources
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The Problem with Glassdoor (And other salary data sources)
Think back to the last job offer or promotion you received and the compensation package you reviewed. How did you know if it was fair? If you’re like most people today, your salary negotiation strategy might have been to ask a few colleagues, phone your mentor, or look up salary data on Glassdoor (or other) based on good faith that other people are sharing correct data (hint: there are plenty of reasons people don’t share accurate comp data online).
I get pinged at least four or five times a month from friends and colleagues asking me the same question—I just got a promotion or a job offer, and this is my comp. What do you think? It’s a question every person has at every level of their career.
But comparing your compensation against your personal network and unverified data aggregated from strangers is like showing up to your comp negotiation with a knife when your opponent has a bazooka – it’s not the best salary negotiation strategy.
The problem with salary data sources today
While they might offer shiny data wrapped in industry categories and even information by city, the problem with Glassdoor and all of these options is the same: none of them verify the data.
The incentive to lie a little—embellishing or even undercutting your current salary—is pretty clear. We have an anonymity problem. When people put too many details online—especially about their comp or title—it’s easy for HR or their manager to identify them.
Comparing your salary to your personal network is even more problematic. The data you can gather personally is from your friends or colleagues (who are willing to share their comp information) in very similar roles at analogous companies. I know just three CEOs at similar-stage companies who look like me and have a similar role. When you get down to it, the data you can gather yourself is incredibly small.
So, the reality becomes simple—the salary data we have today is unhelpful. From an employee perspective, there simply isn’t anything you can anchor your expectations to for salary. And that’s a big problem.
The old way—using unverified and out of date salary data to negotiate today
You got promoted—yay! You should be happy. You should be celebrating. Your promotion trajectory is likely going to help you even more down the road as a good signal that you’re a good hire.
But what most people are missing at this stage? Accurate and up to date data to confirm that even though you did a great job and you’ve now been offered a step up at the company—that new job comes with new responsibilities and puts you in a completely different level of comp than you were before. Perhaps your 7% increase is far below what the market is paying for others in your industry at your new level. Without up to date and reliable data, you’re relying on misinformation online and the word of your HR department to guide your negotiation and you’re getting left behind on comp.
The same is true when you’re negotiating compensation for a new job.
Employees might make a job change once every five years and do that six or so times in their career. That means they only have six experiences with negotiating. Compare that to the recruiters and hiring managers who are negotiating thousands of offers as part of their job. The scale isn’t balanced in favor of the new employee.
My years in recruiting taught me that compensation is typically the fourth or fifth most important on a new hire’s list. But compensation is one of the only levers you can actually pull when you’re negotiating. So the question becomes—what are you anchoring to when you’re negotiating salary?
Today, you might suggest a new number, and the employer will simply reply, ‘No, this is how we pay. Sorry.’ And you’re left to decide if you’re going to accept the offer as is or move on. In the future, we need everyone to have access to better data so we can be better armed to have these conversations, resulting in fair pay for everyone.
Leveling the playing field
Negotiating pay is scary. Employees have limited information, limited experience, and a lot on the line. It’s a black box. Companies have unlimited resources: data, compensation experts, recruiters, and thousands of repetitions. They have nothing to lose and everything needed to win.
At FairComp, our mission is fair pay for all.
That’s why we’re building the only accurate source of pay information, by employees, for employees.
You shouldn’t have to wonder if you’re being paid fairly.
Join FairComp to get accessed to trustworthy compensation data and tools to help you negotiate better pay.
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