Comment by nowyoudont
5 months ago
I'm asking this as someone with 0 legal knowledge: doesn't the context matter? If every company takes this data and is like "we want to pay at the 95th percentile" (which is what they all do), that seems like wage fixing even if they're not all agreeing to it together.
If they’re all shooting for the 95th percentile and have up-to-date data then you certainly won’t have fixing; rather you’ll get insanely rapid wage inflation!
There's also a more cynical explanation.
It's possible the purpose of wage benchmarking companies is to allow bosses to say they pay the 95th percentile - which is useful to be able to say, when someone at an all-hands Q&A asks about raises and bonuses.
Then the benchmarking company simply has to define 'comparable roles' broadly enough to give the customer the result they want.
Not necessarily, if everyone's wages (except 5%) were set at minimum wage then the 95th percentile would be the minimum wage.
Yeah, it seems more like they'd all shoot for 45th percentile and say "We pay competitive wages" instead, slowly driving the wages down.
That's what my employer does. The head of our HR team got in front of the entire company and said that they aim for 50th percentile for everyone in every pay band. It instantly made me want to job hop, tempered only by the million things I have going on in my personal life that have a better expected value than a 5 or 10k pay bump.
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Which is... exactly what the software industry has seen over the past 30 years?
> If every company takes this data and is like "we want to pay at the 95th percentile"
It's thought by some that this is how CEO compensation has gone up so much: Corporate boards of directors have compensation committees, which are fed survey data about comp ranges; a comp committee will say, "We want our CEO's comp to be in the top quartile" — which, as time goes on, leads to an inexorable upward ratchet effect.
I think some basic math knowledge would help more, if every company paid at the 95th percentile then it wouldn't be the 95th percentile, it would in fact be the average. But no, these distributions are not flat like that, there is a large spread and "by definition" of the 95th percentile only a few companies pay at that rate.
If you opened up a business selling water bottles, you'd probably check what price water sells at across brands, then decide in which segment to price it.
"I want to sell my water at the upper end and market it as a gourmet brand"
But in this case you're not selling, you're buying.
That’s how pricing works in a market?
In fact if every company did pay at 95th percentile then I’d say it’s a good outcome. There’s a 5 percentile slack which is not too bad?