Closing the Pay Perception Gap
Written By: Richard Lear, CEO

When it comes to negotiating job offers, both companies and candidates encounter an inherent challenge. At the outset, key stakeholders rarely agree on compensation. In fact, the differences in perceptions of fair market pay can be substantial. Candidates typically believe they are worth as much as 20-25% more than they really are.1 Companies often begin negotiations 15-20% below actual market compensation levels.2 This is the Pay Perception Gap

When it comes to negotiating job offers, both companies and candidates encounter an inherent challenge. At the outset, key stakeholders rarely agree on compensation. In fact, the differences in perceptions of fair market pay can be substantial. Candidates typically believe they are worth as much as 20-25% more than they really are.1 Companies often begin negotiations 15-20% below actual market compensation levels.2 This is the Pay Perception Gap

Yet, when it comes to compensation, there’s resistance at the get-go. The upshot: how do we navigate the pay perception gap, which can often exceed 40%?  

How does the Pay Perception Gap come about?

In seven words: out-of-date and unreliable compensation data. Companies mostly rely on salary surveys. But these surveys are notoriously outdated, often poorly filtered and generally unavailable to candidates. Experts agree that actual market compensation – job offers in today’s talent market – is historically 15-20% higher than salary surveys.

In turn, candidates rely on a mix of pay resources. The main two are job websites and colleagues’ anecdotal job offers. Yet, job websites like Glassdoor. Salary.com and LinkedIn are crippled by non-validated, incomplete, crowd-sourced data. Yes, pay ranges are generally available. But wide salary ranges only introduce more guesswork into what exactly to ask for, or how much to pay.

How does the Pay Perception Gap come about?

In seven words: out-of-date and unreliable compensation data. Companies mostly rely on salary surveys. But these surveys are notoriously outdated, often poorly filtered and generally unavailable to candidates. Experts agree that actual market compensation – job offers in today’s talent market – is historically 15-20% higher than salary surveys.

In turn, candidates rely on a mix of pay resources. The main two are job websites and colleagues’ anecdotal job offers. Yet, job websites like Glassdoor. Salary.com and LinkedIn are crippled by non-validated, incomplete, crowd-sourced data. Yes, pay ranges are generally available. But wide salary ranges only introduce more guesswork into what exactly to ask for, or how much to pay.

Can recruiters be the referee?

The threat of the Pay Perception Gap undoing a deal can send recruiters scrambling for compensation data. Yet, despite their efforts, recruiters are often met with skepticism on both sides. No matter how good recruiter’s data may be, client companies and candidates see this as black-box pay-data. The persistent problem: there is really very little credible market pay data out there that everyone can agree on. Until now.

Access to Compensation in Today’s Job Market

Instead of slogging through a painful job offer negotiation, what if we could magically capture market compensation in today’s job market? Just as NASDAQ publishes stock prices, imagine a compensation exchange that displays actual market pay.

CompEdge™ from ApolloFactor pegs real-time MarketValue™

Finally, there is a compensation tool for real-time compensation packages in today’s hiring market that helps close the pay perception gap.

CompEdge™ not only tracks and reports real-time MarketValue™, it instantly generates market pay reports you can share for 3 million unique roles in technology.