Web Start-Up Goes After the Wage Gap

Think you're underpaid?  There's an app for that.

The backdrop:  After selling their personal finance site Thrive to Lending Tree in 2009, founders Matt Wallaert and Avi Karnani founded a new consultancy called Churnless.  Then, in the first of what they deem their "passion projects", they decided to tackle the gender pay gap.  The result?  GetRaised, a site dedicated to helping people "get the right raise, the right way" by taking them through a process that helps them assess whether they are - in fact - underpaid, guides them through the development of a custom Raise Request letter addressed to their boss and provides tips on how best to deliver the request.

Average raise earned using their process (according to their site): $6,726.  Cost of the service: $20 (with the stipulation that if you don't get a raise in 6 months, you get your money back).

Now I'd like to go on record saying that I believe we've debunked the 77 cents statistic as evidence of widespread gender wage discrimination (since the researchers who brought us that data point also tell us that all but 9 cents of the difference can be explained by non-discriminatory factors).  The fact remains, however, that there are unexplained gender differences in pay - some part of which may well be linked to a reticence women appear to have about pay discussion and salary negotiation.  A 2008 research study provides data confirming this, when it examined gender differences in willingness to ask for a raise:

•"I would never dream of asking":  11% of men, 20%  of women agree

•"I would rather leave the company than ask":  3% of men, 4% of women agree

•"I would negotiate hard": 13% of men, 4% of women agree

With all of this in mind, I was intrigued by the article I read about GetRaised in Mashable.  I got in touch with the group to learn a little more and had the chance for an interesting phone conversation with Matt Wallaert.

What I liked about about his story:

Through the GetRaised process, users are encouraged to present a logical, data-based business case for their raise request.  This forces them to think beyond the "I want, I need, I deserve" mindset that some employees get trapped in.  It asks them to consider the employer's perspective and situation, and to contemplate how they might grow and add value in ways that makes them worth more to the organization. 

By offering coaching and tips, GetRaised helps make the raise discussion a less scary and less emotionally-charged one.

What concerns me:

The data that GetRaised offers to users to develop market comparisons is based on a "mashup" of Bureau of Labor Statistics data and open job postings.  One word:  Ugh.  Matt confirmed in our conversation that they do not want to purchase data - they want to keep the service low cost so that they can continue to offer it at a low price. I get that, but...

Although Matt says that they consulted with 100 HR professionals as well as academics from leading universities in developing GetRaised, nobody on the team appears to have HR or compensation credentials themselves.  This can be a positive, but also a negative.

I asked Matt if he had any advice or thoughts to share with us HR and compensation folks, based on the GetRaised experience to date. What he offered was essentially this: "People often ask for a raise in a very unscientific way.  GetRaised is trying to help change that.  But think about the employer's response; it is often appears to be just as unscientific to the employee."

Why share this with all of you?  I think it behooves all of us to keep track of what's happening at the edges of our profession, particularly in an area as culturally and politically sensitive as this one.  And I think GetRaised, with its flaws, has some interesting things going.  There may be other similar sites and services out there, but I'm not aware of them.

What I'm interested in is your take.  Share your thoughts!

Image courtesy of millionaireacts.com

Comments

[E James (Jim) Brennan]

Synchronicity again. Just led my favorite niece through the same process. After guessing (and confirming) that her pay was at the 10th percentile for beginners while she was a 7-year proven (petroleum!) production engineer, I gave her a storyboard for a scary meeting with her boss to discuss her career prospects. It worked beautifully for mutual benefit, but I failed to collect my $20 fee.

That service fills a legitimate need, as previously done by PayRate$ long ago, and more recently by Salary.com (now eaten up by a CRM firm), SalaryExpert.com and Glassdoor.com. By using a mashup of conservative BLS figures and job board exaggerations, they might not be too far off on non-industry-specific numbers. I'm comfortable saying that any real business not exceeding BLS OES rates should be ashamed of itself. No need to muddy the waters with unsupportable job board dream numbers and their high-end outliers when you have conservative BLS numbers free of charge such as the updated versions supplied in the CareerBuilders job board salary calculator.

[Margaret O'Hanlon]

I let Jim handle the technical issues, and weigh in on the employee side. It sould like they have created a framework that helps employees parse out the issues involved in qualifying for a raise. If GetRaised is helping employees understand how to think through and deliver on the case for higher pay, then go for it. Right now employees understand so little about pay that helping them build a cogent, well thought out case--that their performance delivers on-- can be helpful. I'm curious to see if GetRaised's approach encourages thoughtfulness (rather than being cookie cutter).

Thanks so much for bringing this to our attention. I agree that we should all know as much as we can about every innovation that crops up.

[E James (Jim) Brennan]

Boy, that's an important point, Margaret! One or two of those sources I cited were "disruptive technology" capital ventures little more (IMHO) than sophisticated money-making schemes with no concern for accuracy, integrity or the welfare of the suckers I mean buyers of their "truthy" creations... please excuse my harsh words, but some stuff is simply toxic to our profession. I call them "destructive technology" because they irresponsibly sell distorted views that disrupt morale and foment distrust. Others like SalaryExpert.com's Personal Salary Reports actually have offered for ten years very carefully written primers (I confess authorship) on exactly what you recommend. For the price of a few pizzas, people can get good solid conservative pay info and >20 pages of practical education on total rewards and basic HR/comp tradecraft methods. Rather than acrimonious confrontations (which some intend to create to serve their business model selling "solutions" to problems of their own creation), there should be clear communication about mutually helpful positive outcomes.

Wish every employer offered the appropriate basic "how pay is set here" module with their new hire orientation program. Maybe after they teach other more essential elements like "how to communicate."

[Executive Recruiting]

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[Lansing Workers Compensation Attorney]

I like the premise behind it, but I was be concerned if I were about to go through this process. Could it rub my employer the wrong way? Will it affect my future?

[E James (Jim) Brennan]

Counteroffer demands usually backfire, for sure. But saying, "Gee, I stumbled over an apparently credible source that says I'm terribly underpaid and that makes me worry about my career progress here, so what can you tell me?" is (usually) a non-threatening approach that generally works quite well. Typically, managers gain greater respect for the subordinate enterprising enough to want to cross-check their expectations against a variety of good sources and smartly trusting enough to approach the boss privately. But they better have GOOD sources rather than smoke-blowers.

[Ann Bares]

Thanks for all the great conversation and reaction here - Jim, Margaret, ER and LWCA.

Jim, I think you're probably right, that a combination of the conservative (but at least valid) BLS data and the somewhat-less-reliable-potentially-overblown job board data probably gets us into the right ballpark. Although the site's protocol does rely on job title matching, it also pushes the user to select a couple of alternatives - so hopefully having multiple data points helps mediate the presence of any wild outliers.

Margaret, you're right that there is education offered here as well as data. The fact that the site promotes non-emotional, fact-based communication is also a real positive. Always plenty of room for improvement in pay communication, isn't there.

And LWCA - I think the coaching, tips, follow-through as well as the availability of a live person to respond to questions help users manage their expectations and deal with the real possibility of a "no" response. I guess we'd all like to hope that if the employee approaches the conversation in a courteous, professional, non-emotional manner, the employer will respond (whether the answer is yes or no)likewise.

Again - appreciate the great discussion here!

[ruby on rails]

I'm not really understand about business flow what all of you are talking about. I only have many experiences to make a deal with some startup to release what they want to implemented into application, web based and other related such thing like that. But I'm trying to figure out what actually business run and play.