4 ms·

The two reasons I disagree with publishing salaries and "ranges" are that a) the implicit collusion creates mean reversion that disadvantages talent, who can af

The two reasons I disagree with publishing salaries and "ranges" are that a) the implicit collusion creates mean reversion that disadvantages talent, who can afford to leave and go where they are valued and b) the values behind it presume that a job is something paternalistic granted by a manager in return for supplication, and not due consideration for value offered. Together these create a race to the bottom in office culture, where people optimize to compete not on competence and value, but on debasing themselves and attrition with others. Sure, if you are doing government work, (which is basically a sinecure anyway) this is fine, but any country that implements it will only ever be a kind of outsourced piecework shop, like a maquilladora or "friendshoring," where the real talent who manages the work and handles the money will be in places with rational incentives.

nonethewiser 4y ago
I guess I like seeing the range as an applicant, but I do strongly agree with you in terms of paying people based off what they can command as individuals. Does a large range absolve your concerns?
- lucumo 4y ago
  Not entirely the same situation, but when companies have full salary transparency (i.e. the salaries of all are known to all), then there will be fewer outliers. So, there are fewer "underpaid" people, but also fewer "overpaid" people. I put those terms in scare-quotes because it's unknown whether or not those differences were deserved or not. I did have a source for that, but it was in a podcast and I can't remember which. (1) The assumed mechanism made sense to me though: companies/managers would need to be able to justify salaries to anyone, which is much harder for outliers than for an average salary. It could be detrimental to company peace to hire somebody who earns 50% over everybody else, even if they are worth it. It changed my mind a bit on whether I like transparency. I used to like it unconditionally, but now I'm not so sure. At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. (1) One of the weird things about listening to podcasts is I sometimes remember my physical location when hearing something better than the actual source of the information. That's also what happened here. I remember the traffic light I was stopped at, but not the podcast.
  - nequo 4y ago
    > I did have a source for that, but it was in a podcast and I can't remember which. Was it maybe on the What is Wrong with Hiring podcast?[1] > At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. We can also reasonably expect an opposite effect. Salary secrecy could push down the pay of even high-productivity workers. Searching for a new job is costly, both in terms of time and stress. If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. This means that you are less likely to collect outside options that your employer would need to match by giving you a raise. [1] https://www.whatiswrongwithhiring.com/ https://www.whatiswrongwithhiring.com/
    - lucumo 4y ago
      > Was it maybe on the What is Wrong with Hiring podcast? No, I haven't heard of that one before now. I looked again, but can't find the one I listened to. Side note: pay transparency is an economy podcaster's wet dream. There are soooo many podcasts about it. > If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. The thing is: that is something you can influence. It's not a popular opinion, but employees do have some amount of agency when it comes to compensation. You can learn about salaries of others, even when it's not fully public. You can study negotiation. You can hop jobs every few years to get a raise. None of that is a job skill (though being high-agency is...), but they are things you can do to get more than average. Just getting the average OTOH, does not give you any agency in your salary. It's just been decided by circumstances outside your control. (1) And it gives an employer the greatest excuse ever to not go higher: "this is what everybody else is making." . The downside of explaining "the other side" is that it makes you look like you're against something. I'm not. I'm just not in favour without reservations. But so much is already written in favour of pay transparency, that it adds nothing to regurgitate those arguments. Any economy podcaster will have several podcasts about the pros. (1) I've been part of collective bargaining, and this complete disempowerment annoyed me. Instead of the employer and me hashing something out, it's become the union and the employer deciding for me. It felt like mommy and daddy discussing my allowance.
121789 4y ago
I don’t understand the logic around transparency not giving an advantage to talent, could you expand? Certainly seems like there are counter examples in many places where compensation is public
- aikinai 4y ago
  I'm not sure if I completely follow the parent, but I would also be concerned since it means it'll be far more difficult to negotiate above the range. In the obfuscated market, if you are good at proving your value and negotiating, then the usual range people have in mind for that type of job becomes less relevant. But if the range is explicit and paying one person above that range will disadvantage the company (since they now have to increase the range and give more leverage to everyone else), they will be less flexible. It should be good for the middle and low ends, but I expect pretty bad for the high-end of any given job type.
  - usrusr 4y ago
    > It should be good for the middle and low ends, but I expect pretty bad for the high-end of any given job type. The high end are doing good by definition. The exceptionally talented are winning anyways, if they win a little less outlyingly they will still be winning. It's not as if this would be a project of "pay everybody exactly the same". Who might in theory consider this regulation a problem is companies who like to hire a mix of bottom of the barrel cheap and gold plated rockstars, but in reality those would already have separate roles for these opposites and are therefore not affected are all.
  - makeitdouble 4y ago
    The "open" system was already a semi-defacto practice for many job boards, where you'd have the field present at input when creating the offer (I don't think it was mandatory, but many candidates won't look at an offer without a number) That said, I personally negociated and had offers negociated for above the offering. Think of it more as anchoring than hard bounds: a company details what they expect and how much they'd pay for it, and if on interview you don't fit the bill they could offer you a different job at a lower price instead of just refusing you, or you can ask a higher price for bringing a lot more skills than what they are requiring. At the end of the day it's still negotiations.
slg 4y ago
>a) the implicit collusion creates mean reversion that disadvantages talent, who can afford to leave and go where they are valued Doesn't this logic rest on the assumption that companies that pay better than average are doing it accidentally? Facebook has a reputation for paying better than many other tech companies for example. If I know that, Facebook surely knows that. Why would they stop doing that just because other companies are publishing their pay ranges?
- ecshafer 4y ago
  It goes a bit beyond that in reality. Companies buy salary data for certain industry segments, then have a goal to pay within a percentile range. A company may say aim to pay on the 50-60th percentile of insurance companies for example.
  - wahnfrieden 4y ago
    It’s a kind of laundering also. Company absolves responsibility to consultant research data on market, chooses percentile, and forces it onto managers and workers as a due process regardless of precision and accuracy. Can’t argue with a correct looking decision making process just because you don’t like the result. The data however is sus if you’ve seen it
  - dilyevsky 4y ago
    Companies already do that if not directly then via all kinds of vendor platforms, so what's the difference?
ClumsyPilot 4y ago
> the values behind it presume that a job is something paternalistic granted by a manager in return for supplication, and not due consideration for value does open tender create similar outcones- should tenders for construction have price hidden? Should other markets hide prices, for example healthcare services? it appears that an argument agaist knowing salary or price upfront is an argument against open markets in general
Vanit 4y ago
I think this is only true of the lower end where poorly performing companies are looking to hire poorly performing (or junior) devs, where they care more about bums in seats than actual productivity per person.
Aeolun 4y ago
> not due consideration for value offered How does that work? If the value offered isn't enough, then I'm not working somewhere. Now I can skip the part where I still have to do the interview first before they tell me that 'based on experience' maxes out at 80k.
- lettergram 4y ago
  When the top 10 employers all see that they can charge $60k in the ads, they all just do it. They don’t need to ask, they can see. Then any new person who enters the field sees the rates and just accepts it (both employer and employee). “Sure go walk, I can see what everyone else is paying”
  - badestrand 4y ago
    So if a company wants to attract top talent they can just publicy offer +10% and they get the best people. Seems to me it could become a race to the top, heavily benefiting employees.
    - ghaff 4y ago
      Now you're in game theory territory. A bunch of competitive companies can (don't say collude) mirror each other's salary ranges and maybe they're OK with not using higher salaries to hire away talent which may or not actually be worth more money anyway. Of course, this happens to some degree anyway as companies research this sort of information.
      - Aeolun 4y ago
        Hmm, this could only work if the entire industry is either stagnant or heavily regulated. You need only a few companies that don't go along to completely disrupt that plan.
      - nequo 4y ago
        In game theory territory, no company's best response is to stick to publicly posted salary ranges. Suppose that you are among the top performing workers in the labor market. If you have two job offers, you could get those two companies to match each other's offers. Each of the two company's best response is to match the other's offer to the point at which their offer is exactly equal to the value that you would bring to them. At that point, your net value to them is exactly zero, and beyond that, your net value is negative. So the highest salary that you can get is the value that you would produce for the company where you would be the second most productive. If either company tries to stick to the publicly posted salary ranges even though you would bring them more value than that, then they are forgoing profits and not following their equilibrium best response.
paxys 4y ago
How is any of this connected to publishing salary ranges for a job?
- deleted 4y ago
  [deleted]
t-writescode 4y ago
True, incredible rockstars that are so good can have custom roles created for them that pay a different salary; or, you can have a special, incredible-pay band with a broader range. Say: "Software Engineer Fellow, range: 1.5M to 5M"
yosito 4y ago
> Together these create a race to the bottom How does that work? Say 10 companies are competing for the best talent. All of them offer the public going rate, except 1 which offers 10% more. Guess where the talent is going? To the one that offers 10% more, and now the other 9 companies are incentivized to pay more if they want to attract top talent. I don't understand how secretive salaries benefit anyone other than parties trying to get away with paying lower.
- bleep_bloop 4y ago
  > I don't understand how secretive salaries benefit anyone other than parties trying to get away with paying lower. Because they don't. This Bill will be a major win for all employees and will force employers to increase benefits whether financial or otherwise. The day this Bill is enacted and companies publish ranges, you as an existing employee will know where you sit on that range and whether you're undervalued. This Bill will be the single biggest revolution in workers welfare and living standards since legally required paid holiday or maternity leave. It's about time.
- motohagiography 4y ago
  What is fair about anchoring candidates to an average wage set by otherwise competitive buyers who are now using 'transparency' to signal to each other, let alone +10%? That's collusion against employees. If I can get the same talent for less, I will buy that. However, if that talent costs less because their government has imposed market conditions that remove the persons opportunity to earn closer to what I would pay them based on the value of their work to me, then I am exploiting an arbitrage of talent in that closed and manipulated market vs. adjacent ones. It must be nice to read this thread and be confident that not only will people in tech still work for less than they are worth, but they will even assert the obligation of others to do so. Facebook employees have an average revenue per employee well above a million dollars, is a web developer working for them only worth the $10/h that other employers are have agreed to offer them because they are from a poor area that enforces these policies, or does this developer earn an equity portion of the millions in value they are creating? Even if it were $100/h, that only seems attractive because most people don't understand contracts, negotiations, numbers, or economics. If you want to know who wins, it's political parties who sell out their populations to global companies by using manipulations like this to suppress the value of their local labour market, and when they attract more foreign companies exploiting this, they get the revenue to spend on getting re-elected by the smaller coalitions they are paying off with the proceeds. Maybe this would have been less controversial if they had marketed it as, "Your bargaining power will be sold out to global corporations and you will be happy."
theonlybutlet 4y ago
It's the opposite of a race to the bottom. Currently the market is asymetric, the employers hold the cards as they know the going rate, employees do not. And they can artificially push down prices over the longer term. Disclosure is also a benefit for start ups and small businesses s they can actually see the cost and plan accordingly (more certainty, potentially allowing more business), they don't have the resources to interview all day or hire big HR firms who know market rates.
Simon_O_Rourke 4y ago
> where people optimize to compete not on competence and value, but on debasing themselves and attrition with others. That's all well and good - but then by that definition companies actively hire folks who are unable to do the actual work, and impact the company's bottom line, just because they're cheap. Companies that do that go out of business.

nonethewiser 4y ago

I guess I like seeing the range as an applicant, but I do strongly agree with you in terms of paying people based off what they can command as individuals. Does a large range absolve your concerns?

lucumo 4y ago
Not entirely the same situation, but when companies have full salary transparency (i.e. the salaries of all are known to all), then there will be fewer outliers. So, there are fewer "underpaid" people, but also fewer "overpaid" people. I put those terms in scare-quotes because it's unknown whether or not those differences were deserved or not. I did have a source for that, but it was in a podcast and I can't remember which. (1) The assumed mechanism made sense to me though: companies/managers would need to be able to justify salaries to anyone, which is much harder for outliers than for an average salary. It could be detrimental to company peace to hire somebody who earns 50% over everybody else, even if they are worth it. It changed my mind a bit on whether I like transparency. I used to like it unconditionally, but now I'm not so sure. At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. (1) One of the weird things about listening to podcasts is I sometimes remember my physical location when hearing something better than the actual source of the information. That's also what happened here. I remember the traffic light I was stopped at, but not the podcast.
- nequo 4y ago
  > I did have a source for that, but it was in a podcast and I can't remember which. Was it maybe on the What is Wrong with Hiring podcast?[1] > At least in an opaque world, there's skills you can learn to become an outlier. With transparency the average could hinder your salary growth even more than it already does. We can also reasonably expect an opposite effect. Salary secrecy could push down the pay of even high-productivity workers. Searching for a new job is costly, both in terms of time and stress. If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. This means that you are less likely to collect outside options that your employer would need to match by giving you a raise. [1] https://www.whatiswrongwithhiring.com/ https://www.whatiswrongwithhiring.com/
  - lucumo 4y ago
    > Was it maybe on the What is Wrong with Hiring podcast? No, I haven't heard of that one before now. I looked again, but can't find the one I listened to. Side note: pay transparency is an economy podcaster's wet dream. There are soooo many podcasts about it. > If you don't know how little you earn, you are less likely to be dissatisfied with your current job and pay the search cost. The thing is: that is something you can influence. It's not a popular opinion, but employees do have some amount of agency when it comes to compensation. You can learn about salaries of others, even when it's not fully public. You can study negotiation. You can hop jobs every few years to get a raise. None of that is a job skill (though being high-agency is...), but they are things you can do to get more than average. Just getting the average OTOH, does not give you any agency in your salary. It's just been decided by circumstances outside your control. (1) And it gives an employer the greatest excuse ever to not go higher: "this is what everybody else is making." . The downside of explaining "the other side" is that it makes you look like you're against something. I'm not. I'm just not in favour without reservations. But so much is already written in favour of pay transparency, that it adds nothing to regurgitate those arguments. Any economy podcaster will have several podcasts about the pros. (1) I've been part of collective bargaining, and this complete disempowerment annoyed me. Instead of the employer and me hashing something out, it's become the union and the employer deciding for me. It felt like mommy and daddy discussing my allowance.

121789 4y ago

I don’t understand the logic around transparency not giving an advantage to talent, could you expand? Certainly seems like there are counter examples in many places where compensation is public

aikinai 4y ago
I'm not sure if I completely follow the parent, but I would also be concerned since it means it'll be far more difficult to negotiate above the range. In the obfuscated market, if you are good at proving your value and negotiating, then the usual range people have in mind for that type of job becomes less relevant. But if the range is explicit and paying one person above that range will disadvantage the company (since they now have to increase the range and give more leverage to everyone else), they will be less flexible. It should be good for the middle and low ends, but I expect pretty bad for the high-end of any given job type.
- usrusr 4y ago
  > It should be good for the middle and low ends, but I expect pretty bad for the high-end of any given job type. The high end are doing good by definition. The exceptionally talented are winning anyways, if they win a little less outlyingly they will still be winning. It's not as if this would be a project of "pay everybody exactly the same". Who might in theory consider this regulation a problem is companies who like to hire a mix of bottom of the barrel cheap and gold plated rockstars, but in reality those would already have separate roles for these opposites and are therefore not affected are all.
- makeitdouble 4y ago
  The "open" system was already a semi-defacto practice for many job boards, where you'd have the field present at input when creating the offer (I don't think it was mandatory, but many candidates won't look at an offer without a number) That said, I personally negociated and had offers negociated for above the offering. Think of it more as anchoring than hard bounds: a company details what they expect and how much they'd pay for it, and if on interview you don't fit the bill they could offer you a different job at a lower price instead of just refusing you, or you can ask a higher price for bringing a lot more skills than what they are requiring. At the end of the day it's still negotiations.

slg 4y ago

>a) the implicit collusion creates mean reversion that disadvantages talent, who can afford to leave and go where they are valued Doesn't this logic rest on the assumption that companies that pay better than average are doing it accidentally? Facebook has a reputation for paying better than many other tech companies for example. If I know that, Facebook surely knows that. Why would they stop doing that just because other companies are publishing their pay ranges?

ecshafer 4y ago
It goes a bit beyond that in reality. Companies buy salary data for certain industry segments, then have a goal to pay within a percentile range. A company may say aim to pay on the 50-60th percentile of insurance companies for example.
- wahnfrieden 4y ago
  It’s a kind of laundering also. Company absolves responsibility to consultant research data on market, chooses percentile, and forces it onto managers and workers as a due process regardless of precision and accuracy. Can’t argue with a correct looking decision making process just because you don’t like the result. The data however is sus if you’ve seen it
- dilyevsky 4y ago
  Companies already do that if not directly then via all kinds of vendor platforms, so what's the difference?

ClumsyPilot 4y ago

> the values behind it presume that a job is something paternalistic granted by a manager in return for supplication, and not due consideration for value does open tender create similar outcones- should tenders for construction have price hidden? Should other markets hide prices, for example healthcare services? it appears that an argument agaist knowing salary or price upfront is an argument against open markets in general

Vanit 4y ago

I think this is only true of the lower end where poorly performing companies are looking to hire poorly performing (or junior) devs, where they care more about bums in seats than actual productivity per person.

Aeolun 4y ago

> not due consideration for value offered How does that work? If the value offered isn't enough, then I'm not working somewhere. Now I can skip the part where I still have to do the interview first before they tell me that 'based on experience' maxes out at 80k.

lettergram 4y ago
When the top 10 employers all see that they can charge $60k in the ads, they all just do it. They don’t need to ask, they can see. Then any new person who enters the field sees the rates and just accepts it (both employer and employee). “Sure go walk, I can see what everyone else is paying”
- badestrand 4y ago
  So if a company wants to attract top talent they can just publicy offer +10% and they get the best people. Seems to me it could become a race to the top, heavily benefiting employees.
  - ghaff 4y ago
    Now you're in game theory territory. A bunch of competitive companies can (don't say collude) mirror each other's salary ranges and maybe they're OK with not using higher salaries to hire away talent which may or not actually be worth more money anyway. Of course, this happens to some degree anyway as companies research this sort of information.
    - Aeolun 4y ago
      Hmm, this could only work if the entire industry is either stagnant or heavily regulated. You need only a few companies that don't go along to completely disrupt that plan.
    - nequo 4y ago
      In game theory territory, no company's best response is to stick to publicly posted salary ranges. Suppose that you are among the top performing workers in the labor market. If you have two job offers, you could get those two companies to match each other's offers. Each of the two company's best response is to match the other's offer to the point at which their offer is exactly equal to the value that you would bring to them. At that point, your net value to them is exactly zero, and beyond that, your net value is negative. So the highest salary that you can get is the value that you would produce for the company where you would be the second most productive. If either company tries to stick to the publicly posted salary ranges even though you would bring them more value than that, then they are forgoing profits and not following their equilibrium best response.

paxys 4y ago

How is any of this connected to publishing salary ranges for a job?

deleted 4y ago
[deleted]

t-writescode 4y ago

True, incredible rockstars that are so good can have custom roles created for them that pay a different salary; or, you can have a special, incredible-pay band with a broader range. Say: "Software Engineer Fellow, range: 1.5M to 5M"

yosito 4y ago

> Together these create a race to the bottom How does that work? Say 10 companies are competing for the best talent. All of them offer the public going rate, except 1 which offers 10% more. Guess where the talent is going? To the one that offers 10% more, and now the other 9 companies are incentivized to pay more if they want to attract top talent. I don't understand how secretive salaries benefit anyone other than parties trying to get away with paying lower.

bleep_bloop 4y ago
> I don't understand how secretive salaries benefit anyone other than parties trying to get away with paying lower. Because they don't. This Bill will be a major win for all employees and will force employers to increase benefits whether financial or otherwise. The day this Bill is enacted and companies publish ranges, you as an existing employee will know where you sit on that range and whether you're undervalued. This Bill will be the single biggest revolution in workers welfare and living standards since legally required paid holiday or maternity leave. It's about time.
motohagiography 4y ago
What is fair about anchoring candidates to an average wage set by otherwise competitive buyers who are now using 'transparency' to signal to each other, let alone +10%? That's collusion against employees. If I can get the same talent for less, I will buy that. However, if that talent costs less because their government has imposed market conditions that remove the persons opportunity to earn closer to what I would pay them based on the value of their work to me, then I am exploiting an arbitrage of talent in that closed and manipulated market vs. adjacent ones. It must be nice to read this thread and be confident that not only will people in tech still work for less than they are worth, but they will even assert the obligation of others to do so. Facebook employees have an average revenue per employee well above a million dollars, is a web developer working for them only worth the $10/h that other employers are have agreed to offer them because they are from a poor area that enforces these policies, or does this developer earn an equity portion of the millions in value they are creating? Even if it were $100/h, that only seems attractive because most people don't understand contracts, negotiations, numbers, or economics. If you want to know who wins, it's political parties who sell out their populations to global companies by using manipulations like this to suppress the value of their local labour market, and when they attract more foreign companies exploiting this, they get the revenue to spend on getting re-elected by the smaller coalitions they are paying off with the proceeds. Maybe this would have been less controversial if they had marketed it as, "Your bargaining power will be sold out to global corporations and you will be happy."

theonlybutlet 4y ago

It's the opposite of a race to the bottom. Currently the market is asymetric, the employers hold the cards as they know the going rate, employees do not. And they can artificially push down prices over the longer term. Disclosure is also a benefit for start ups and small businesses s they can actually see the cost and plan accordingly (more certainty, potentially allowing more business), they don't have the resources to interview all day or hire big HR firms who know market rates.

Simon_O_Rourke 4y ago

> where people optimize to compete not on competence and value, but on debasing themselves and attrition with others. That's all well and good - but then by that definition companies actively hire folks who are unable to do the actual work, and impact the company's bottom line, just because they're cheap. Companies that do that go out of business.