Closing the Pay Perception Gap
Written By: Richard Lear, CEO

When it comes to negotiating a job offer, recruiters encounter a dual challenge. At the outset, companies and job candidates rarely agree on compensation. In fact, the differences in perceptions of market pay can be substantial. Candidates typically believe they are worth as much as 20% more than they really are. Companies tend to begin their negotiations 15-20% below actual market.

The good news: after a rigorous back-and-forth, deals do eventually get done. But it is rarely pretty. The best case is after a spirited negotiation; everyone finally agrees and we all move on. The worst case: a good match is lost and some come away with bruised egos. Negotiating job offers should not be a zero-sum game!

Yet, with compensation, there’s an impasse at the get-go. The upshot: recruiters are often tasked with closing a pay perception gap of up to 40%. Sound familiar?

How does the pay perception gap come about?

 

In seven words: out-of-date and disparate compensation data. Companies tend to overweight salary surveys. But these surveys are notoriously outdated and generally unavailable to candidates. In a real challenge to pay transparency, salary surveys remain a closely-guarded secret except for a few corporate insiders.

On the other hand, candidates rely on mix of disparate pay sources. The main two are job websites and colleagues’ anecdotal job offers. Yet, jobsites like Glassdoor and LinkedIn are crippled by non-validated, crowd-sourced data. Moreover, most companies ignore them. Jobsites also fail to deliver in-depth parameters that may substantially effect pay such as company role definition, stage, job content, location and market space.

The pay perception gap sends recruiters scrambling for compensation data. Herein lies the rub. Despite their good efforts, recruiters are constantly met with skepticism on both sides. No matter how good recruiter’s data may be, both sides see this as black-box pay-data. It might as well be voodoo pay! The persistent problem: there is really very little credible pay data out there that everyone can agree on. Until now.

 

How does the pay perception gap come about?

 

In seven words: out-of-date and disparatecompensation data. Companies tend to overweight salary surveys. But these surveys are notoriously outdated and generally unavailable to candidates. In a real challenge to pay transparency, salary surveys remain a closely-guarded secret except for a few corporate insiders.

On the other hand, candidates rely on mix of disparate pay sources. The main two are job websites and colleagues’ anecdotal job offers. Yet, jobsites like Glassdoor and LinkedIn are crippled by non-validated, crowd-sourced data. Moreover, most companies ignore them. Jobsites also fail to deliver in-depth parameters that may substantially effect pay such as company role definition, stage, job content, location and market space.

The pay perception gap sends recruiters scrambling for compensation data. Herein lies the rub. Despite their good efforts, recruiters are constantly met with skepticism on both sides. No matter how good recruiter’s data may be, both sides see this as black-box pay-data. It might as well be voodoo pay! The persistent problem: there is really very little credible pay data out there that everyone can agree on. Until now.

 

Access to Market Pay

 

What if we could magically capture all the latest job offers and then publish them for all to see? While we still might disagree, for the first time, we could all be sharing the same data. Just as NASDAQ publishes real-time stock prices, imagine a compensation exchange that displays real-time compensation packages.

Finally, a tool that closes the pay perception gap.

Dealmaker™ displays Real-time MarketValue™ for executive roles in tech in as little as 2-clicks.

We’d love to hear your feedback!