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I have asked some HR people this question about ranges, and most of them tell me they expect to pay the midpoint of the range. That is, if you meet the qualifications, they’ll offer you the midpoint. However if you blow them away or got some competing offers, they will offer you the high end. And if you got very little experience, the low end. That’s the rule of thumb. It doesn’t matter if the range is as wide as 80k-400k, just assume the midpoint is the starting offer

I’ve also done some research where I took offers people disclosed in TeamBlind and compared them to the job posting, and in most cases the offer was very close to the midpoint https://docs.google.com/spreadsheets/d/1SfaV1p_jbgoTOyCsD5wd...

If the range spans an order of magnitude, should I consider the logarithmic or linear midpoint? That is geometric or arithmetic mean between the ends?

They’re HR people - a log is a thing that used to be a tree.

No hate for HR but i have to share a funny line my previous business partner used to quote:

"These people are often neither humane nor are they resourceful"

At least they provide resourceful humans :-)

Is the midpoint between 20k and 80k 40k or 60k?

Is the midpoint between 10k and 1M 100k or 505k?

I think intuitively when the span is large we easily reason in logarithms even with little math training.

But the (geometric) midpoint between 100k and 1MM is $316,227 which might be surprising to some.

Either works but using the logarithmic could be a lot harder finding the correct base

And you'll make less money

Or ask HR: What's the logarithmic mean base for your salary range?

The latter

I worked for a mega-corp (not FAANG) and my manager told me that the company did “extensive research” to determine market value for each position’s salary, and that their goal was to then be at 95% of that market value. So annoying that you, allegedly, know what the market value is and then purposely try to undercut it to save a little money.

I get that it’s a business and it’s nothing personal, but this company had insane profits and mad growth so they could afford to pay people a bit better.

> just assume the midpoint is the starting offer

This is reasonable and is what I thought as well. But I worked for a firm where senior manager band was $120-350k. Most senior managers came in at $120-150 and would climb through years with the firm. If a new hire at the senior manager rate asked for $225-250 as a midpoint it would kill their negotiation and likely cost them their offer.

The band should be what the company is willing to pay the new hire, not what everyone with that title is making.

If a range spans that many digits I think you haven't really done the work to figure out how much the labor is actually worth.

Yep, the range is also used for internal promotions. Someone who gets a title bump might end up in the lower end of the range for their new level (which should usually be higher than the high end of their previous range)

> I work in a very regulated organization where all pay rates are published with postings.

> But the ranges are $20-40k for each grade and it’s hard to tell what you will end up being offered and accepted

Is it really that hard in fed land? I work for the state of California, and which has a similar level of regulation and similar posted ranges, but its pretty trivial most of the time to know exactly where you’d be set. I mean, its not 100% accurate, but this is right most of the time:

If you are apply from outside the system, you will be offered the exact bottom of the range and there will be no flexibility.

If you are inside the system, if its a lateral, you keep your pay. If its a higher range, you move up by the lesser of 5% or to the minimum of the new range. Also with no flexibility.

The circumstances with any flexibility are very limited, what you get is almost completely determined by how you got to the job.

> The privacy implications are serious and need to be accounted for.

Of by-employer actual pay distribution disclosure? Is that why public sector employers pay a hefty wage premium because their employees pay data is public on an individual level, which obviously has even greater concerns?

Oh, wait...

> I frequently see people with work history in the $30/hour range applying for very high pay jobs.

Does a low-paying job in the past disqualify you from high-paying jobs in the future?

Yeah, it’s an entrenched form of classism. Sort of like the American version of the old British Civil Service. The plucky clerk will never be the high commissioner.

Most companies paying premiums recruit a particular pedigree of university graduate. Few graduates of Flyover State are going to be rockstars at the First National Bank of Nowhere and get a fancy gig at Facebook or a hedge fund.

One exception is .gov employees. For exceptional people, smarter companies will usually value their current comp at 150%.

In my experience, it mostly does. Everyone tries to funnel you into +5-15% positions and may relent to +15%-30% when you reject their offer (two times and they still decide they need you).

I generally just don't say what my current role pays when interviewing. I ask what pay range they're targeting, and if they need a number from me, I'll offer a range where the low end is what I'd actually like.

Myself as well, but that information is out there and easily found through payroll subscription services.

The big ranges is a logical consequence of such stupid rules. People are not commodities, and only in the most trivial of work can you a priori know what an individual brings to it. It's typical government thinking that makes no sense in the real world. So employers are stuck publishing an absurdly wide band that reflects the difference in what different people might bring to the position.

This is effectively populism, a simple and wrong solution to a much more complex problem.

In the vast majority of cases, you’re not going to know what an individual brings to the job for 6 months to a year at the minimum. The majority of the pay difference between 2 people with the same job title (assuming standard bigco leveling) comes down to negotiating ability.

Published pay ranges aren’t going to solve anything, but they do reduce the information asymmetry a little bit. They give you and idea of what is possible for they title in that company at that location. Companies have an incentive to post a relatively accurate range, and in most of the jobs I’ve applied for it was.

> The majority of the pay difference between 2 people with the same job title (assuming standard bigco leveling) comes down to negotiating ability.

No, it comes down to about 1/3 negotiating ability and about 2/3 prior experience, impressions you give at the interview, and leverage (e.g. other offers real or perceived). The first one you can get from the resume and the other two happen over the course of the interview(s).

If your resume shows you as a perfect fit for a position with a ton of relevant hyper-specific experience, you will naturally get an offer higher in the pay band than someone with half the amount of pseudo-relevant experience. Pay bands even $40-50k will help because most people actually do have a decent idea how qualified they are for a given job. I've applied for things where I'd be happy getting an offer toward the bottom of the pay band due to no relevant experience, and applied for things where I knew I should be at the very top.

When I say negotiating ability I also mean to include multiple offers. Which in my experience is the single biggest factor in determining pay for most software engineers.

I agree more specialized and very senior rolls are different, but most people are going into much more generic roles. Even then bad negotiating skills can swamp out everything you else if you throw out a low number to someone willing to take advantage of it.

All said we agree that realistic pay bands will help here.

I have yet to see a position where the company has no idea about the budget allocated for it.

It's not uncommon to have budget be expressed in headcount rather than dollars, though. So you can hire one "senior software engineer" and your HR department has a model that tells them at what percentile of "senior software engineer" pay any given amount is - then you need to go into an exception process if you (as hiring manager) want to pay over 90th or 100th percentile or whatever.

Says who?

Labor is absolutely a commodity, and companies price labor both for buying and selling based on skills and demand.

You may inhabit some obscure corner of the world where you’re some sort of free agent priced individually. But most likely, you’re working for a company in a title assigned by some HR person into a salary band. The salary band is chosen by the business unit based on their budget.

The wide bands are published to minimally comply with the law. In the long run, they advertise to applicants that the company will happily bone them given the choice.

Or they could just figure out how much the labor they are shopping for is worth to them and advertise for that.

> So what do I do with a job posting that says $110-250k? If Im senior, do I apply and expect $250k not knowing if there’s a single person who is amazing making they amount? Or if Im junior do I ask for $110, knowing I could get more.

You apply with the knowledge that you will earn at least $110k, and if you want more, you should apply to more employers so that you have the negotiating position to ask for more.