Future Friday: Will employees be setting wages in the future?

The changing world of work is challenging traditional ways of doing things. In the past most companies had wage and salary ranges for positions, at least large companies did, and when they were ready to make an offer it was one that fit within that range. Even companies that didn’t have official salary grades still had a range in mind when they made an offer. Bolder candidates might negotiate but many did not, especially for hourly positions. What if this was reversed? What if the applicant set what they wanted the company to pay?

Data available

Today because of the increase and availability of wage and salary information applicants come armed with much more information than they had in the past. One company is using that fact to change how they compensate people. Gavin McGarry is the founder of social media innovator Jumpwire Media. He has new employees set their own salary. Sophie Wade, a Future of Work expert, said in an interview with McGarry, “What more tangible way to demonstrate that a prospective employee’s personal sense of value is and will be respected, also allowing the employee to take ownership of their responsibility in realization of that value.” New employees, using salary data, set their own salary offer. McGarry, using the same data, evaluates their offer. With existing employees interested in a promotion, it is their responsibility to validate their knowledge, understanding and preparedness for the role, and the amount of their requested raise.

Counter to another trend

The way McGarry is moving is running counter to other companies who are eliminating salary negotiation at all in basically “here is your offer, take it or leave” approach. The company Redditt in California has eliminated salary negotiation on the basis that it is gender biased and favors men who are traditionally better negotiators. In a SHRM magazine article it was noted  ”…that women tend to settle for the salary they’re offered, leaving them at a disadvantage. And when they do negotiate, they are often viewed negatively by others in the company or industry.”

Bill Balderaz, the CEO Fathom Healthcare in Ohio, says the negotiation starts the relationship off with distrust and is unfair to people who are not good at negotiation. He says that if you are not hiring someone to be a negotiator then those skills should not count.


According to the author of the SHRM article, Joanne Sammer, the “no negotiation” trend is unlikely to take off. Will the reverse trend of letting employees set their own salary fare any better? Possibly. One of the issues surrounding current salary negotiation is a lack of transparency. The call for transparency is strengthening and is being driven by Millennials who have an expectation of having access to all sorts of information. If companies are not open about compensation information it ends up being leaked on the Internet anyway. The “name your salary” method is certainly based on transparency.

Will this new trend eliminate the pay discrepancies seen between men and women? The dynamic of self-worth is still there. What do you do in HR when someone makes an offer that is radically under the true value of the job because they don’t see themselves as being worth the money? Or perhaps they are using “low-bidding” as a tactic to get the job?

Will a shift to an “on demand” economy where everyone is a freelancer promote this type of compensation method? It is has been working for me in that I am the one that sets my fee and the prospect either accepts, rejects or negotiates.

There are certainly many issues that will arise out of this method of compensation determination. Old methods, openness and government regulation will all play a part in the success of people setting their own salaries. HR departments will have to pay attention to pay inequity issues on an even greater level than in the past.



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