In an article titled “Salary Negotiation Research: Nikki Minaj vs. Kim Kardashian,” published in Business Insider, labour economist and salary negotiation consultant Joseph Richards bestowed my company—PayScale.com—with the honour of being compared to Kim Kardashian, while comparing Salary.com to Nikki Minaj.That’s one we haven’t heard before. Thank you?
We appreciate some aspects of Richards’ comparisons. For example, he writes:
“She [Kim Kardashian] blazed a new trail to fame and wealth: leveraging reality TV stardom. Likewise, Payscale.com is blazing a new trail when it comes to providing salary data. Payscale’s data comes entirely from individuals—4.5 million per month—submitted via their website, making it the largest and most nuanced salary survey in the world. They have 13,000 job classifications, dwarfing Salary.com’s 4,500. Payscale.com has taken a modern, pioneering approach to salary surveys: crowdsourcing information via the Internet.”
However, we felt compelled to respond to a couple points about PayScale’s data, which we think is sometimes misunderstood (we feel ya, Kim).
POINT 1: Verifying The Authenticity Of PayScale’s Information
“But despite their innovative approach and impressive data, the vast majority of HR professionals are sceptical of Payscale.com’s salary data because it’s submitted entirely by random people on the Web. There’s no way to verify the authenticity of their information, something that scares HR professionals.”
This essentially calls crowdsourcing into question as a data collection method. We disagree. Crowdsourcing was around long before the term was coined. One of the first and best examples of crowdsourcing is the Oxford English Dictionary, compiled from the submissions of tens of thousands of unpaid volunteers over the course of 70 years. Wired calls it “arguably history’s first massively-crowdsourced collation of English knowledge.”
And, with such a massive sample size, there are several ways to verify the information PayScale collects, which is what our team of data scientists and economists do every day.
“Every profile that comes through our system goes through a front-end set of consistency and validity tests,” said Katie Bardaro, PayScale’s lead economist and data scientist. “It must pass each test to be included in PayScale’s reporting database. In addition to the automatic data validation process, our data team verifies incoming data and regularly compares it to both publically available and privately available compensation data. In all comparisons (including to traditional salary surveys) we have found no systematic biases in pay.”
Plus, there’s no motivation for users to provide inaccurate data to PayScale. All information is provided voluntarily and anonymously. There are no offers, payments or incentives to complete a PayScale survey. Users are interested in determining their worth in the labour market and have a disincentive to lie, as inaccurate answers will generate inaccurate reports.
Why Crowdsourcing Is Better Than Traditional Compensation Data Collection:
Not only is collecting compensation data this way just as valid as traditional salary surveys from employers, it’s a big step forward. Here’s why:
1. The data is always up-to-date Traditional salary surveys are typically updated once a year (at most). Imagine basing compensation on 2008 data in 2009 after the recession fully took hold; that’s what users of traditional survey data were faced with. PayScale is collecting, verifying, and publishing new data every day. We are able to see trends in compensation long before a traditional salary survey.
2. No one knows their job and skillset better than the employee – not even their employer. Could the HR department at your company accurately describe what you do every day at your job? Do they know the latest classes you’ve taken or skills you’ve added to your resume? The level of detail we’re able to collect from individuals helps us better understand the factors that most influence pay for different positions (or which should).
POINT 2: The HR Community’s scepticism Of PayScale’s Data
“Like many people’s scepticism of Kim Kardashian’s “talent,” the HR community has yet to be won over by Payscale’s data.”
Every innovative idea has its early sceptics and early adopters, and while it’s true that not every compensation professional in the HR community understands the advantages of PayScale’s approach (yet), we have a very impressive group of forward-thinking employers on our list of over 2,200 business customers.
“They [traditional salary survey providers] are like the 10 O’clock news,” said Shad Glass, human resources director at Kimray, an oil and gas manufacturer. “I don’t wait till 10 o’clock to watch the news anymore. PayScale is information on demand.”
Here are just some of PayScale’s clients who use our data to develop their compensation strategies and set pay ranges for their employees: Mozilla, Tully’s Coffee, the United States Postal Service, MLB Network, Zappos.com, Cabela’s, Clif Bar, The Economist, The Motley Fool, Quiznos, Zagat and Adecco.
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