Since 2016, Glassdoor’s Know Your Worth free salary estimator tool has served as one way that workers can inform themselves on the pay they should expect, based on the millions of salaries that users have shared anonymously on Glassdoor. It is also emblematic of a broader cultural shift toward pay fairness: recent examples include bans on asking candidates for their salary history in 18 American states and mandatory disclosure of gender pay gaps in Europe.
In this study, we explore who is most likely to use the salary tool, how increased pay transparency translates into higher worker pay and the implications this research has on the gender pay gap.
- In 2016, Glassdoor released the Know Your Worth tool, a salary calculator based on the millions of salaries that people have shared anonymously on Glassdoor. In this study, using a sample of 340,000 salaries, we examine the impact that using the tool has on workers’ actual salaries.
- Key takeaway: People who use Glassdoor’s Know Your Worth tool earn 2.4 percent higher salaries on average than people who do not, after applying statistical controls to compare similar people. That translates into an additional $1,315 per year for the average person.
- Who wants to know? The people who use Glassdoor’s Know Your Worth tool are more salary-conscious than the average person. They can be characterized in two ways:
- Workers with less salary information are more likely to use the tool. Workers at smaller employers have less visibility into their pay and are more likely to use the tool. Conversely, workers in industries and job functions with more transparent pay-scales, like education or government, are less likely to use the tool.
- Workers poised for salary gains are more likely to use the tool. Workers in high-paying, competitive fields like finance, business services and information technology are more likely to use the tool. Additionally, today’s millennials (25-44 years old), who are in the prime of their careers when they experience the most pay growth, are more likely to use the tool.
- Younger and less experienced workers benefit more from the tool. The positive effect of the tool is almost twice as large for younger and less experienced workers who can see a bump in pay as high as 4.4 percent. But these workers, who could benefit the most from the tool, are not necessarily the ones using it most frequently today.
- Men and women benefit differently. While the tool is beneficial for both men and women, men capture more of the benefits of using the tool, seeing a 3.3 percent bump in pay compared to 1.4 percent for women. This may be due to differences in men’s willingness to and success in negotiating and has important implications for how to address the gender pay gap.
For more information, please download the full report, “Know Your Worth: The Power of Pay Transparency”