Salary negotiations

Unless you’ve been under a rock (or on another orbital rock perhaps?) you’ll be aware of the gender equality pay gap. But, is the problem wider than this?

If you’ve ever applied for a job, you’ll know how awkward the salary negotiations can be:

  • What was your previous salary/package?
  • What is the minimum you’ll work for?
  • Late stage discrepancies, etc.

If you’ve hired people in the past, you’ll have issues too:

  • Budget approvals
  • Banding constraints
  • Excellent candidates who are above budget
  • Offer too low and lose/alienate staff
  • Pay too much and drive arrogance/laziness

So, what if every job had to be posted with a precise salary and package? Not a range… a precise number.

Candidates would apply for jobs knowing the score up front. Their previous circumstances would be irrelevant and they’d implicitly answer the second question by virtue of applying. There would be no late-stage surprises.

Hiring managers would have a simpler budgeting exercise. Excellent candidate or not, the published salary has been open since the start, so there’s no need to negotitate further. Staff take on the job knowing the offer, and managers hire them knowing their capabilities, so the issues with under/overpay can dissipate too.

Gender becomes irrelevant. Without any wriggle room, there’s no mechanism by which different people could be paid differently for the same job.

Bonuses can still exist. They can act as the principal incentive structure, and given bonuses should be based on clearly defined and quantifiable objectives and achievements (i.e. SMART), then wriggle room for preferential treatment here should also be minimized. In the past I’ve conducted annual pay and bonus reviews where the system has guided me to artificially increase an under-achiever’s bonus because their base pay is below median, and decrease a high-achiever’s bonus because they’re above median. That’s just wrong!

And what about everybody knowing each other’s pay?

Well, it works OK in Norway. And, why do employers fight pay transparency today? It’s that staff might feel disgruntled to learn their colleagues earn more than them… which of course isn’t a problem when they can’t.

Payrises?

Oh, just pay everybody a guaranteed inflation-aligned pay-rise. Yes, it costs more to the employer each year, but it’s largely predictable, and could be covered by both increases in revenue (which drive inflation anyway) and operational efficiencies. It’s likely that the overall salary cost today already rises with inflation on average.