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Eliminating salary negotiations -- good move for the wage gap?

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Eliminating salary negotiations -- good move for the wage gap?

Postby Dave Walker » Sun Aug 02, 2015 8:09 am

Hi all,

In recent discussions of Google employees disclosing their salaries to each other, the dialogue turned to negotiation, and how it might be contributing to wage inequality. At another Silicon Valley darling company, Reddit, salary negotiations were eliminated to address this purpose: www.bizjournals.com/bizwomen/conversati ... eddit.html

“We come up with an offer that we think is fair,” [CEO] Pao told the Wall Street Journal. “If you want more equity, we’ll let you swap a little bit of your cash salary for more equity, but we aren’t going to reward people who are better negotiators with more compensation.”


I know we've talked about these types of offers before on the board, I think we called them "First offer, best offer" type of places. I always assumed there was a corporate reason for this, maybe encouraging teamwork subconsciously by minimizing jealousy. Perhaps wage inequality factored in at these places as well?

On the flip side there are arguments that negotiation is the best tool to combat the wage gap, and that leaving it to the hiring company says a message that they know our interests better than we do.

I'm curious to hear about your thoughts on this, especially as it relates to the sciences industry versus the tech industry highlighted above. I also don't want to start a fight, so if this is too incendiary of a topic I'm happy to close the comments.
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Re: Eliminating salary negotiations -- good move for the wage gap?

Postby RSD » Tue Aug 04, 2015 8:38 am

Call me a cynic, but I think moves like this are more about saving company cash more than it is about equity. I am certain that Ellen Pao, CEO of Reddit, negotiated her contract prior to taking the position. I would bet that essentially all C-level hires involve some negotiation for stock, salary, relocation, etc. To eliminate negotiation for new hires under the premise of equity strikes me as exploiting a political trend for the companies benefit, not the employees.

Companies negotiate because when they've found the best candidate, it is worth a little more money to make sure you don't lose them to the competition. Candidates negotiate because they know they can get a better deal from it. The system works. In the red-hot tech scene in Silicon Valley, Reddit will lose some of the best candidates to their competition because they won't budge on their offer.
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Re: Eliminating salary negotiations -- good move for the wage gap?

Postby Dave Jensen » Tue Aug 04, 2015 11:41 am

RSD wrote:Call me a cynic, but I think moves like this are more about saving company cash more than it is about equity. I am certain that Ellen Pao, CEO of Reddit, negotiated her contract prior to taking the position. I would bet that essentially all C-level hires involve some negotiation for stock, salary, relocation, etc. To eliminate negotiation for new hires under the premise of equity strikes me as exploiting a political trend for the companies benefit, not the employees.

Companies negotiate because when they've found the best candidate, it is worth a little more money to make sure you don't lose them to the competition. Candidates negotiate because they know they can get a better deal from it. The system works. In the red-hot tech scene in Silicon Valley, Reddit will lose some of the best candidates to their competition because they won't budge on their offer.


All sectors have companies that are "First offer, best offer" employers like this company. But, all of them will also move sideways on offers, perhaps fine tuning other issues that are important to the candidate. No, the base salary may not change, but they'll change the title of the job, or the start date, or the number of meetings you can attend per year, or let you work at home one day a week, and so on . . .

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