If you've ever been a part of the performance review process, you will know that people will go very far to justify a raise. Looking at the current job listings on your company's career section will be the very first thing that everyone will do if those salaries were to be made public.
That's even more likely to be the case when there are strict guidelines around compensation (eg: when salaries are public). When your manager has some wiggle room, you might be able to justify a bigger bump than average because of all the extra hard work you're putting in, even if your experience level doesn't qualify you for a straight up promotion.
What you’re really saying is that making the information available makes it harder for companies to retain employees using the status quo tactics. Which increases turn-over, which in reality is the businesses problem not the employees. So from the employee perspective what is the problem in being better informed about the price dynamics within the market?
If you’re asking about listing individual salaries, I think some employees would object and, unless they signed onto the job with that expectation, as an employer I don’t believe I’m morally right to publish their currently private information without their consent, nor tell them “you can quit if you don’t like it”. (I have absolutely no problem with anyone voluntarily disclosing their own information, discussing it, comparing it, whatever.)
So, out of accounting spite, many companies are opting for churn instead of stability by simple raise vs new hire policy, making it worse for everyone.
I'm not sure if it has changed now, but Gitlab used to have a big problem with the way they calculated compensation. Their calculations were very heavily weighted against the Numbeo rental prices, which meant you had someone living in London, UK would earn 40% more than someone living in Bristol, UK, even though the cost of living in both cities is pretty similar.
Never lived in Bristol, but I can't believe this. The calculations are heavily weighted against rental prices because accommodation is a large part of most people's expenses.
I guess I never feel the need to justify a raise. If I need to justify it I’ve already failed I think.
This right here I think is the real reason companies do not disclose compensation in their listings. Their current employees fall below the range and they do not want them to know. This is unfortunately a widespread problem in tech, where companies constantly offer more for new hires than what they pay their own employees for the same work. The new hires that have joined will then find themselves in the same position next year when their compensation falls below what someone will be hired at that year! And the cycle continues. It's absolute madness if you look at it from the big picture perspective and there are some fundamental problems with the way HR orgs are structured that need to change. From an employee perspective, the most optimal thing you can do for yourself is to move companies frequently and that is the reason for the crazy churn we see in this industry.
For most companies, this will make them less resistant to boom and bust as they'll be forced to offer big annual payrises which they won't be able to roll back when the market contracts.
GP didn't say that there are good reasons to underpay experienced staff compared to new staff, he said that there are good reasons that salaries cannot be raised across the board.
No. This is exactly what GP said:
> there were reasons good reasons why salary couldn't just be raised across the board to match new hire rates.
There is not a single company I can think of (other than FAANG or unicorn startups flush with VC money) that can raise salaries across the board, they simply do not have the cash-flow to do it.
I agree, but the reality is that raising salaries across the board would kill the company immediately, while having ONLY inexperienced staff might happen, and even if it did, it only might kill the company.
Another factor is that a lot of the staff just won't move, even if they know they are being paid less.
I get that the short-term justification is "we can get away with paying the former less because enough of them will be afraid to leave."
But is there another justification?
In my experience, at large companies "cash flow" would not even vaguely register the difference of increasing salaries for experienced people you want to keep, and it would be a marvelous signal to the rest.
You can use a bonus to cover fluctuations without hurting morale too much.
Plus you don't have to give everyone an automatic raise If you post new jobs at a higher rate. Just give them a new title, and allow current employees to apply for them.
My current employer isn't willing to raise the salaries of its current employees, not the market ones, but to the level of what they are offering to new hires. This, in my opinion, is wrong. This also inevitably leads to eventually paying everyone at market value (old employees leaving replaced by new ones with up-to-date salaries) except that you as a company lost a lot of business experience in the process.
Even in the case that no company on earth would disclose salaries, workers will inevitably learn about what their current market value is and to some extent what new hires and colleagues roughly earn. Because they have friends and colleagues that are open about disclosing their salaries. Trying to hide salary information is just lying to yourself (as a company).
Companies should budget for hire once their workforce is roughly on par with the market, salary wise. It's not the only factor but they would be able to retain much more talent and expertise inside the company and eventually be able to generate more value. This situation in my opinion is one of the big reasons (out of many others of course) why most companies eventually turn bad after some time.
You assume:
a) Companies will by necessity pay people doing ostensibly the same thing different amounts of money
b) People do not necessarily wish for their salary to be made public
c) Making a salary range requires the lower and upper bound to be equidistant from the expected starting pay
d) Making too narrow a salary range would therefore reveal pay, in contradiction to b).
Therefore, it is a necessity of employees' desired privacy and employers' ability to advertise the lowest, er, "most competitive" wage possible for the company to have a wide salary range.
EDIT to add: I think your argument still falls a little flat, because salary ranges should still be accurate. "We would consider hiring someone with slightly less resume experience for the bottom range, we would hire a rockstar demigod at the highend, and just what we're looking for somewhere around the middle".
So the point of not listing the salary is to attract highly qualified candidates who don't know they're worth more than the role pays? That doesn't seem to be a good thing.
I would say "this new position you are hiring for gets paid more than I do for the same work" is a very good justification for a raise. :)
If companies can be held accountable for injustices like this one, that can only be a good thing. Well, except if you're scared your employees will catch you out.
For the record: I've played the part of the employer in this specific issue and learned my lesson.
I think this is missing the point. Do you think employers coercing employees into accepting conditions below what they should normally get is not a thing that happens? The employer, as opposed to the employee, has the power to manipulate the socioeconomic circumstances around the employee. They can (and do) prevent employees from discussing politics at the workplace or unionising, they can (and do) hide (and manipulate) information about who is getting paid what, they can (and do) decline additional compensation when it should be given (overtime), and this is the least of it.
You might think, “well, the employees should just get a different job then!”. But don't we want to fix the underlying problem instead of just churning our way through countless jobs? Sometimes it doesn't even work — you are often compelled to stay at a job for various reasons (you relocated with your family, you've worked there for a long time etc.), and you might not even realise this manipulation is happening to begin with.
The above comment said that employees will go very far to justify a raise. Don't you think that, if employees had all of the information their employers had, a lot of employees _would be_ able to justify a raise that they deserve, perhaps even without having previously realised this because of the information asymmetry? That sounds like an injustice to me.
To work at a job is to actively consent to that job.
It's hard to make an argument that you owe them notice if they didn't give notice of a significant change in working conditions.
We're not talking about coercion. Concealing the wages of other people in the organization is not coercion.
> You might think, “well, the employees should just get a different job then!”. But don't we want to fix the underlying problem instead of just churning our way through countless jobs?
No, we don't. The way we fix the problem is by choosing with whom we do business. "countless jobs" is a straw man.
The problem is, this often doesn't happen. The employee being paid too little (or working too long, or being otherwise treated poorly) might not know they are being coerced into this bad position, might not know how much their employer is hiding from them, may not want to go through the considerable effort of interviewing for another job, may not have the financial stability to put their family through that period of job hunting, or may just be of a non-contrarian disposition and enjoy having their stability in the current job.
There are a million reasons an employee would not respond to a blatant injustice by precisely identifying it and demanding it be righted or otherwise quitting. If you do do this, I truly think that is fantastic and I commend you. The ones who stay in these jobs, however, are being badly treated, at the employer's benefit. I don't think that's right, and I don't think they can be fully blamed, because a lot of these problems come from how adept the employer is at manipulating the situation. If you say “no, we don't want to fix that”, I'm sorry to say I can't agree with you.
No it's not. If you are paying under average salaries, why do you deserve above average talent? ... Unless you admit it's just another rigged game (masked as meritocracy). It's sad.