Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

How much should you be making? PayScale reveals SV salary data

Posted by Tom Foremski - October 4, 2006

I recently met with PayScale, the Seattle-based aggregator of salary information. The company says that it can provide users with an accurate, assessment of salaries for specific jobs in regions around the world.

That sounds like a chance for snooping on colleagues and bosses, and thus wonderfully enticing. But Joe Giordano, the founder and VP of product development, and Mike Metzger, the CEO said that they protect people's privacy so it is difficult to check a specific person's salary although you can probably get a good approximation.

Here is some fresh jobs data on Silicon Valley salaries (not including bonuses). You can view the rest of the spreadsheet here.

SV Salaries.png


The power of the site is in the real-time salary survey data that users put into the system. And that is done by following a set of questions that tie salary to education, location, experience and type of job.

But how does PayScale ensure the quality of its data? "By following the line of questions we can eliminate false salary data, because we already know how much someone would be making. And there is not much incentive for people to lie because they want accurate information themselves," explained Mr Giordano.

Mr Metzger said that there are 20 tests that are designed to check for validity. Any data that falls out of the statistical norm is rejected. As much as 50 percent of profiles are rejected by the system.

Individuals can use the service for free in exchange for filling out a salary survey. The money is made on services sold to human resource departments in large companies. And that's the future for the company, rolling out business services based on its data while allowing individuals free access to the data to evaluate job offers.

With more than one million users, PayScale claims it has the most accurate salary database of anyone, including government statistics. "Government data takes months to collect and publish and it is very broad. For example, Our data can distinguish a nurse's salary according to the size of the hospital, its location, and several other factors," said Mr Giordano.

The company was just awarded a top ten HR product of the year by Human Resource Executive magazine, so it must be heading in the right business direction.

SVW's take: PayScale's database could provide it with some additional opportunities to partner with other online services such as job boards. And it could become a place where individuals could return time and again for personalised career planning, advice, career development and jobs wanted.

The company has raised VC money and is building out its infrastructure. The challenge will be in making sure the quality of its data is fresh and relevant. That means it has to have a large number of profiles spanning many regions. HR departments are reticent about sharing their data because of potential lawsuit problems so attracting individuals to volunteer their information, and to do it on a regular basis, is key.


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Additional Info:

Company overview: http://www.payscale.com/about.asp?pg=about&sub=overview
Managment bios: http://www.payscale.com/about.asp?pg=mgmt&sub=exec
HR Exec press release: http://payscale.com/about.asp?pg=news&sub=pr&pr=101

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