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How AI Can Level The Playing Field For Workers In Salary Negotiations

March 26, 2024
in Business
How AI Can Level The Playing Field For Workers In Salary Negotiations
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A majority of employers (73%) are open to salary negotiations on a job offer.

getty

Enduring a lengthy interview process is an emotional roller coaster of ups and downs. After many months and several rounds of meeting people, you feel a sense of relief when the company says it is going to make an official job offer. Instead of being excited, there’s a sense of dread. You realize it is time to go through the stressful and anxiety-inducing salary negotiations process.

Although the job description provided a salary range—such as $50,000 to $500,000—the numbers are so far-flung that it’s not helpful. When the offer is made, you’re left feeling unprepared. The company has all the cards since it is aware of how compensation is awarded within the organization. You, however, are in the dark, as you don’t have access to what people at your level are being paid. The opaqueness and one-sidedness of the negotiations make you feel like you are being taken advantage of and losing out on a lot of money.

Family, friends and co-workers will try to be supportive and offer their own advice. Unfortunately, most of them don’t have the insider knowledge of what salary, corporate title, bonus, stock options and benefits should be offered.

You may “shoot your shot” to see how high the company is willing to go, but by asking for an unreasonably high compensation, it can backfire with the organization pulling the offer.

The Problem Of Not Knowing Your Worth

Each organization has its own system for conducting salary negotiations. For example, some companies give their “best” offer and won’t entertain negotiations. It’s a “take it or leave it” situation. Other employers may be tricky and put out a lowball offer to see how desperate you are.

Other times, candidates are able to advocate for themselves. The problem is the power imbalance in the vast knowledge and experience. Human resources professionals and hiring managers do this all the time, whereas job seekers may not be as savvy and prepared when entering negotiations.

Job applicants sometimes struggle to figure out how much their knowledge and experience are actually worth. Moreover, the lack of accurate salary data available places candidates at a disadvantage. It’s easy to shoot too high or go too low. When dealing directly with a manager or HR, it’s likely that you will avoid pushing too much because you don’t want to be perceived as a difficult person. Similarly, if you fight tooth and nail for counteroffers, it could also make the hiring manager feel that you are just using the position as a jumping-off point for more money, and don’t actually care about the role.

According to research from CareerBuilder, 55% of job candidates do not engage in negotiations for higher pay with their new employer because they are uncomfortable (53%), afraid the company will rescind its offer (48%) or do not want to be perceived as greedy (38%).

When you view salary negotiations as personal rather than business, your emotions can cloud your judgment. You may walk away from a great career opportunity and come to later regret it, especially as CareerBuilder found that a majority of employers (73%) are open to salary negotiations on a job offer.

Using AI To Level Out The Salary Negotiation Process

To learn how to make salary negotiations more equitable, I spoke with Nolan Church, an experienced talent acquisition and recruiting professional who has previously worked at Google and DoorDash, in a video interview.

As a former head of recruiting and chief people officer, Church has been on the other side of the negotiation table. “I felt a moral dilemma about how many people got screwed over because they were lowballed and didn’t negotiate,” he stated. “When I started talking openly about the issue, I heard story after story about people who found out they were making significantly less than their peers.”

Looking for a way to champion workers, Church built a startup called FairComp. The company’s mission is to offer verified compensation data and tools to help employees make better, more informed decisions and earn the money they deserve—based on their background, experiences and talents. FairComp’s AI-powered software helps people understand their market value and how to negotiate.

“Employers pay tens of thousands of dollars a year for access to industry compensation data,” said Church about the incongruity of salary negotiations. “Every employer that accesses the data is required to upload their company compensation data to the master dataset. That compensation data is never shared with employees. Employees only have access to their colleagues—a small sample size—or online resources, which is inaccurate and unverified.”

One of the main issues regarding salary transparency is that people are uncomfortable talking when it comes to discussing money and compensation, as it’s still seen as a taboo. Since there isn’t an open conversation, the job seeker is at a loss.

“If employees don’t talk about compensation, they’re left in the dark. HR teams are built to support the company; employees have to support each other. Having candid discussion about current compensation, compensation trajectory and performance history can illuminate discrepancies that would otherwise go unnoticed.”

How To Find The Data

Compensation data products for organizations is a multi-billion dollar business, including large firms such as Radford, Pave and Carta Total Comp. There is a need in the market for employees to deserve access to similar data.

For employees, FairComp is a “give to get” model. Users provide their current compensation or an offer letter, FairComp verifies it and then gives professionals access to industry compensation data. Leveraging artificial intelligence, the startup analyzes millions of job offer letters to help employees evaluate, compare and negotiate their offers. The platform is also growing a community to discuss compensation openly, and offers a career co-pilot to help workers accelerate their careers.

Church is rolling out new products, such as a benchmarking tool to show tech employees how they stack up against their industry peers, as well as an AI-powered Compensation Coach to help employees practice for salary discussions.

Other Ways To Measure Compensation

In addition to FairComp, workers can get salary estimates from websites like PayScale, Salary.com, Glassdoor, Indeed and ZipRecruiter. The Bureau of Labor Statistics offers occupational employment and wage data collected by the United States Department of Labor.

Professional associations are also a valuable resource, as is asking colleagues and co-workers for “ballpark” salary info in your company or field. Be prepared, while discussing salary is no longer as taboo as it once was, some companies either frown upon it or even try to actively stop workers from talking about compensation.

If you use the services of a recruiter, they can help make the process much less stressful. Instead of having to negotiate your own salary, it is the job of a recruiter to do it on your behalf. Your headhunter should have a solid understanding of the title breakdown and pay structure.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Forbes – https://www.forbes.com/sites/jackkelly/2024/03/25/how-ai-can-level-the-playing-field-for-workers-in-salary-negotiations

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