Salary leverage—not salary knowledge—is the key for job seekers to earn their market worth
PALO ALTO, CA (May 11, 2022)—New York City has delayed a law that would mandate businesses to publish salary ranges for posted jobs, vexing advocacy groups that say publishing salary ranges will lead to more equal pay, especially for women and minorities. Several states have passed similar legislation as the strong post-pandemic hiring market continues with 11 million open jobs.
Riva, a salary negotiation coaching platform, observes in its Job Negotiation Pulse Report that posting corporate salary ranges will likely not close the pay gap—and could backfire. Rather, Riva’s client data shows self advocacy—and salary leverage—is far more powerful than salary knowledge for increasing pay for women and minorities. Without this, the two-thirds of workers today who fail to negotiate their salary will continue to leave a collective $188 billion on the table in foregone wages annually.
“Most workers believe that if they just knew the magic number to ask for, their salary dreams would come true. Through our work, we know that salary knowledge is not the solution. It’s salary leverage that truly makes the difference and helps workers boost their pay,” says Ben Cook, CEO of Riva.
Other insights observed:
- Outdated numbers
The post pandemic effects of a strong job market combined with inflation means that published salary numbers are frequently outdated. Companies typically set their budgets at the start of the year, and with steep inflation and a tight labor market, pay is rising faster than many HR departments have accounted for before initiating interviews. In a Salary.com survey of 1,170 companies, 73% say they plan a 4% or more payroll budget increase this year, trailing inflation. According to Riva co-founder, negotiation expert and former Harvard Business School faculty member David Lax: ”If workers accept posted pay ranges for a job, they are likely undervaluing their true market worth in today’s climate.”
- More than just salary
While well-intended, salary transparency laws don’t take into account all the disparities that go into a complete compensation package. Outside of base pay, important components like stock options, sign-on and retention bonuses, remote work and vacation days are often where the largest gaps appear between those who advocate for themselves reliably—disproportionately white men—and the majority of American workers who fail to negotiate their offer. To take one example, at WeWork 94% of the equity grants over $1 million went to men. Focusing only on salary transparency risks papering over true disparities and creating a false sense of progress on pay equity.
- Risk to equal pay progress
Job seekers are more likely to accept a publicly listed salary at face value without negotiation. The risk is that more women and minorities—particularly those early in their careers—will shy away from learning to advocate for their market worth, resulting in lower pay and slower progression across their careers over time. “Posting salary bands lets companies train workers to believe they cannot—or don’t need to—advocate for themselves. Learning to negotiate and claim your worth is a critical skill for financial empowerment and for furthering equal pay gains,” says Cook.
The Riva Job Negotiation Pulse Report provides periodic market observations based on Riva’s data gathered over more than 5,000 successful negotiations to date. To learn more visit Rivahq.com.
Riva is a salary coaching platform founded by the world’s top negotiation experts out of Harvard Business School. Using proven approaches to building leverage and a validated, data-driven coaching methodology, Riva is working to end the “Negotiation Gap” by giving people of all backgrounds the tools and support they need to earn what they are truly worth.
Katherine Dvorkin for Riva