The crowded field of salary comparison platforms has a new entry seeking to provide tech candidates with an advantage in compensation negotiations.
Paysa is the latest in a series of companies to bring salary data into the mainstream. The company, which launched in February and recently secured $4 million in seed funding from New Enterprise Associates and other investors, joins the likes of Glassdoor Inc., Hired Inc., PayScale Inc. and Vault.com Inc. vying to provide salary reports and employee reviews on company culture, compensation and other benefits.
Palo Alto, California-based Paysa uses data from more than 90 million employee profiles to define a candidate’s current worth based on their education, experience, job title, market they work in and other career factors. The site lets employees understand their real market value while enabling employers to figure out what they will have to pay to secure top talent, said Krishna Kolluri, a general partner at New Enterprise Associates. “Everyone is competing for the same talent. Paysa levels the playing field a little.”
The service is free to consumers, and the company says it will generate revenue through referral fees from job listing partners and training providers. Paysa is using machine learning algorithms to come up with a unique number for each individual, CEO Chris Bolte said. “It’s not ‘what a director of software makes,’ it’s personal to who you are and your experience.”
Sites like Paysa that bring new technology and algorithms to the salary transparency conversation have grown increasingly popular, especially among millennials. Many of them have no qualms about sharing their own compensation and other workplace data.
“Sites like these are taking the genie out of the bottle,” said R. Ray Wang, principal analyst at Constellation Research Inc. “Democratizing salary data will change the way people look at prospective employers, and give employers a better idea of what they need to pay their people.”
It will be a little chaotic at first, Wang said, but eventually salary conversations will lose that taboo status and become a baseline piece of talent acquisition information.
“It makes the conversation about salary more transparent and direct,” said Bolte, who founded Paysa in 2015 and had previous stints with @WalmartLabs and Yahoo Inc. His ultimate goal is for salary data to be laid out at the start of every job negotiation, rather than a secret held till the end.
“There is nothing more frustrating than spending four weeks in interviews only to find out the salary offer isn’t even close to competitive,” he said. “A candidate should just be able to check whether the offer is fair before continuing the conversation.”
The platform currently only has data for professionals in software, data science or information technology fields, but Bolte plans to expand to sales professionals as the company ramps up. Wang believes that calculating salaries for sales staff will be a lot more complicated.
“With an engineer, you can look at their title, experience and degree and come up with a number, but sales is harder,” he said. Factoring things like sales pipelines, existing relationships, and projected future sales based on past performance isn’t an easy algorithm to define, Wang said.
What to Say About Pay
It may take a few years, but eventually sites like Paysa will force companies to change the way they talk to new and existing talent about compensation, Wang said. And those companies that resist may find themselves losing access to candidates who expect salary offers up front, and attrition among good employees who think they aren’t being fairly compensated based on market standards.
“Companies are going to need a talent management strategy that takes salary transparency into account,” Wang said.
This trend will also force hiring managers to be more realistic about their candidate profiles, and that will make recruiters’ lives a whole lot easier. Now, if a recruiter is handed an unrealistic candidate profile, they can point to the data that says exactly how much that person will cost, then suggest changes to the hiring parameters to narrow the gap.
Compensation may be just one factor in why a person accepts a job offer, but it’s an important one, and companies need to recognize that candidates have access to this data, Kolluri said. “It means they will have to work harder at demonstrating how they stack up to their competitors, and why their offer is more competitive.”