Earlier this month, LinkedIn introduced LinkedIn Salary for users in the U.S., UK, and Canada (rollout to the rest of the world is expected in 2017). The crowdsourced salary database — which places LinkedIn squarely in Glassdoor’s neighborhood — enables Premium members to access compensation information without sharing their own data, while free members must contribute theirs in order to gain access.
While crowdsourcing salary information isn’t new, LinkedIn Salary takes it a few steps further:
- It provides a more complete compensation picture that includes not just salary, but also bonus and equity data, which are important in specialized industries and roles like investment banking or software development. Additionally, when weighing an offer from an established company versus a startup, options can make up for lower guaranteed salaries.
- Second, it highlights factors that can influence compensation, such as experience, industry, location, company size, and education.
- LinkedIn has done some useful work in standardizing titles so that it’s easier to compare compensation across difference companies, where titles can sometimes be quite different (what is a customer evangelist anyway?)
Salary transparency is clearly something that candidates value. It helps them assess the potential of moving to another location, company, or industry, or how upgrading their education and skills might boost their earning power. And of course, those who are already employed can see how they’re compensated relative to others doing similar work. In fact, in CareerBuilder’s 2016 Candidate Experience survey, salary was the No. 1 piece of information that job seekers want to see in a job posting.
So candidates love it. But what does this mean for talent acquisition professionals? We see some advantages.
- LinkedIn Salary can be a helpful tool for assessing how competitive your salaries ranges and total compensation packages sit compared to others in your industry. Are you overpaying? Underpaying? What are rivals offering — in the way of benefits, bonuses, or stock options — that can put you on a level playing field for attracting and retaining employees? Or, for roles that are especially difficult to fill, what levers can you pull to give you an advantage over the competition?
- Talent acquisition teams can have more informed conversations with hiring managers about candidates’ compensation expectations, earlier in the process. Few things are more frustrating for a hiring manager — or recruiter — than finding an amazing candidate who checks every box, but whose salary expectations would break the bank. A snapshot of the market enables recruiters to consult with hiring managers so that they can budget appropriately. (From the opposite perspective, if you find an ideal candidate whose salary expectations are unrealistic, LinkedIn Salary can deliver a useful third-party data point to counter their demands.)
- Transparency can help set and manage candidates’ salary expectations in a neutral, non-confrontational way. Open communication and transparency helps to build a feeling of trust between candidate and recruiter, and demonstrates that the company is doing everything it can to be fair. Most candidates will understand that a range is just a range — and will be realistic about where they sit on that scale based on their experience and other factors.
- When candidate and recruiter both have realistic expectations about compensation, it enables you to shift focus to ‘selling’ one another. The talent-acquisition pro can concentrate on assessing the candidate’s fit in terms of skills, experience, and personality, while the candidate can decide if the job and the company are really right for her. We think that will help create better “marriages” between candidates and organizations — and that makes the talent acquisition team look good.
- If your company is identified as one that compensates well, chances are your recruiters will be busier than ever. This can be a good thing because you’ll be attracting a greater selection of candidates, and some of them will be excellent finds. But even with an applicant tracking system parsing resumes, your team will spending more time separating great candidates from not-so-great ones. Get ready for the deluge.
All sounds good, right? Well, not so quick!
The caveat here is that this is user-contributed content, and you always have to view that with a bit of caution. It’s difficult to prove scientifically, but contributors can sometimes over-inflate their salary, which can give a false sense of reality. And while LinkedIn has worked to standardize titles, the role of a marketing manager at one company may differ significantly from the same role at another.
In fact, compensation consultant David Weaver conducted a quick test of several HR roles to compare salaries reported on LinkedIn Salary versus those reported by employers. Across the board, LinkedIn Salary reported levels ranging from 11.1 percent to 20.4 percent higher.
So, buyer beware. Recruiters shouldn’t rely solely on sources like LinkedIn Salary and Glassdoor to gauge compensation for a position. They’ll continue to have to gather information from a variety of sources — including industry and professional associations, as well as good old-fashioned human intelligence gained from talking to candidates — to get a complete picture.