Compensation

Internet Giving Workers the Upper Hand in Salary Negotiations

Web-based providers of salary information, such as Compensation.BLR.com, allow job seekers or workers lobbying for a raise to tell you “what I’m worth” even before you make an offer. Here’s what to do to counter the trend.

It used to be that, when buying a car, the dealers held all the cards.

They alone knew what they paid for a vehicle, and how much they could play with the price and still make their profit. And when a dealer told you, “If I sell it at the price you want, my kids will go hungry,” you had no information to counter that claim.

Then came the Internet, and everything changed. Now anyone can visit an online vehicle pricing service and know dealer cost exactly. The cards have shifted, and the buyer now holds the upper hand.

Well, don’t look now but the same thing has happened in “buying” an employee.

Web-based providers of salary information, such as Payscale.com, Salary.com, or our own Compensation.BLR.com, are radically shifting the power in compensation negotiations. And if you’re looking for a new worker or are about to talk possible raise with a current employee, you’d better know the new lay of the land.

How it works is simple: Jobseekers or current employees simply visit these sites and type in job title, company size, business, location, education, experience, and other factors. In a flash, the service compares these particulars with employee survey data. And just as quickly, they know how much, in salary and benefits, the job commands in like organizations operating within the same market.

“What We’ve Budgeted” May No Longer Work

What it means is that, where companies formerly set compensation based on broad national benchmarks, comparisons within their own organizations, or just “what we’ve budgeted,” they now have to compete in the open market. Add an increasingly competitive recruiting landscape (Does the phrase “talent war” ring a bell?) and you’ve got a playing field for compensation negotiations that’s not only level but, from the employer’s perspective, might just be tilted a little uphill.

And make no mistake about this: Employees know about, and are increasingly using, these resources. “They prepare themselves for [job interviews] or performance reviews,” says Fred Whittlesey of Payscale.com, as reported in Workforce Management. “They’re not shy about confronting their current or would-be employees with that information.”

The good news is that the sites offer employers the same right of access to this data. It may well pay to visit these sites, and know in advance what you’ll be up against before you talk compensation. You’ll then be better prepared to counter employee demands with solid reasons as to why you can … or can’t … meet their price.

Have you had a jobseeker or employee confront you with salary demands based on Internet information? How did you handle it? Use the Share Your Comments button and let us know.

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