No More Salary Guesswork - or Poker Games!

Introduction: “The Flop” in Poker and in Job Hunting

Are you a poker player? If not, are you one of the many, many of us who have wandered into watching one of the thousand channels we now have and watched a poker show at 2 a.m.? Now, there are two, mutually exclusive schools of thought when it comes to watching “professional” poker players wager thousands - often tens of thousands of dollars or even more - on your big-screen TV. Either you find this exhilarating, in that you can live vicariously - and far more cheaply - by watching others gamble on a high-stakes turn of the cards, or you find it akin to watching paint dry. However, one thing is for sure: These shows do definitely draw eyeballs, as people - out of either sheer fascination or sheer boredom (and yes, they do count the same to marketers!) - will watch these shows and give their attention not just to the obvious ads inserted into what is largely very well-produced and choreographed entertaining shows, but also to the players’ sponsors, who adorn their shirts and visors with logos of some very prominent firms outside of the gaming sector!

The game of choice for poker programming today is one of the most popular card games - Texas Hold 'em. If you are not a degenerate poker room regular or even a casual, Friday night poker player with your friends, the game has a rhythm that makes it go quickly and yes, builds suspense both for the players and for those watching poker content on their televisions, their laptops, their tablets, or their phones. The rules of Texas Hold 'em are simple - well, relatively (and yes, these rules are presented purely for informational purposes only). There are seven cards total for each player in Texas Hold 'em.

• Cards 1-2: Pocket Cards/Hole Cards - First two cards dealt to each player in Texas Hold 'em, facing down - all players must bet to be in the game and receive these cards.
• Cards 3-5: The Flop - The first three community cards are dealt after the first round of betting. These community cards are shared by all players to use in their hands, and as such, they are dealt facing up in the center of the table for all to see.
• Card 6: The Turn - The fourth community card, facing up in the center of the table for all to see, is dealt after the second round of betting.
• Card 7: The River Card - The fifth, and final, community card, facing up in the center of the table for all to see, is dealt after the third round of betting.
• The Showdown - Betting continues until no more bets are placed by the players.
• The Reveal - The winner of the hand is determined by players “revealing” their two Pocket/Hole Cards and demonstrating the best 5-card hand that they have, based on matching one, two, or none of their formerly hidden cards with the 5 community cards in the center of the table.

Texas Hold 'em has been studied extensively, both by poker players seeking to gain an edge and/or learn from poker legends of the past and even by real physicists seeking to explain the science of it all!

Now, the “reveal” in a game of Texas Hold 'em on TV is often a moment of high tension. The players in the game can instantly see if they win or lose, in other words, did they make the "right" bets or did they make, what in retrospect, knowing the outcome, was a foolish decision….

Believe it or not, though, both job hunters and corporate HR departments and recruiters have - until now - largely been playing a game of Texas Hold 'em - and this in perhaps the biggest and most important game in almost all our lives - the employment game! What a job will pay has been treated much like the Pocket/Hole Cards in this high-stakes poker game that is well, your future! Each party, the job seeker and the job recruiter (whether inside or outside of the organization), wants to know two things. The former wants to know what the job pays, in order to know if a job change would be worth their while, and the latter party wants to know if the salary that they can offer will be “enough” to get the job applicant to “sign on the line that is dotted” and accept an offer to join their organization if one is merited. But until recently - very recently, salary was considered a verboten topic! What a job might actually pay was something that job seekers were advised to certainly not ask about - at least early in the application and interview process, if at all, until magically, an offer comes from a prospective employer with “the number” (i.e. what the job will actually pay!). And from the recruitment perspective, employers will always know - at least in a range - what a job can pay going into the process of trying to fill that slot. Of course, in any organization - profit or non-profit, private or public - the goal of management, in terms of compensation, will always be to figure out what would be the lowest number that we can offer that the applicant we want to take the job will actually accept our offer. That is the cold reality of how Compensation 101 works!

Both sides in the job placement equation have thus been operating - up until now - with a mindset of viewing pay as a generalized, rather than a specific, construct, knowing that “the market” says what a job should pay - however one might get that information! One can look at this number as being equivalent to the community cards in Texas Hold 'em. However, both parties have their respective Pocket/Hole Cards that will actually determine whether or not the job applicant selected by the organization will actually consider, let alone take, the job offer extended to them. In other words, is the pay being offered “good enough” to get the job done for both parties in the employment equation? And until recently, let’s only reveal those cards at the very end of the employment process! However, this is coming to an end - fast - as we enter an age of pay transparency - and a better, more enlightened and efficient era of job hunting and job recruitment with everyone’s cards on the table, and those cards are all facing up from the start!

The Good Old Days of Job Hunting Meets Modern Realities

Remember the "good old days" of job hunting? Let’s say that you became interested enough in a job to actually apply for the position with a company. So, how do you go about doing so? Now, while the author is “of a certain age” to where he can tell his college student audiences about the ancient days of job hunting - well, no more than a decade or two ago - when it might have taken days for one to prepare an application package to send to a company, a government agency, a non-profit or even a university! You would send in a carefully crafted cover letter, a resume printed on the finest paper, and yes, often with reference letters! All of this paper-based process was costly in time and money - both for applicants and for the hiring organizations (who had to sort through all of this "stuff" manually). But alas, we know that the world has changed. Today, you can apply for most jobs with just a tap on a button or a swipe on a screen! Yep! Job hunting has absolutely changed for the better - in fact, for the much, much better!

Yet, the shifting of the “mechanics” of job hunting from a paper-based process to an electronic one may not be the biggest revolution in the employment “match game” over the past few decades. Indeed, the biggest shift is taking place right now, and this change will have major implications for how we work - and yes, where we will work and for how long - going forward. This is the move towards full pay transparency - where job seekers increasingly will know what a potential job for them will pay upfront in the employment process. Pay transparency is being propelled not just by new state laws mandating this. But more so, the shift is based on an evolution in the way compensation is thought of - and openly talked about - upfront in the employment process. As we will see, employers all across the nation, not just those in states mandating that pay information be in job postings and recruiting advertisements, are including - and including prominently - specific job pay - or at least pay ranges - for jobs in their employment listings. In doing so, the matching process that is the way we look for jobs and the way companies look for talent is being reshaped to work better - for all - with salary information being shared freely and openly.

This change is nothing less than transformational to the “employment game,” as job seekers - as well as job offerers - will have far, far greater insights into what “the number” (in terms of compensation) needs to be - and what it is - that will create a successful “end” to the recruitment process! In our poker analogy, what a job pays - and what an applicant is making - no longer should be information that is held onto by both job seekers and employers like their respective Pocket/Hole Cards in a high stakes, career and even life-altering game of what amounts to "Employment Texas Hold 'em!"

Pay Transparency is Coming Fast

The concept of employers offering pay transparency - being upfront in their job listings and in all of their recruiting efforts about what a position will actually pay - is fast gaining traction in the employment marketplace. On one hand, this is happening because pay transparency is being mandated. However, the market - the “invisible hand” of the long dead, but prescient, economist, Adam Smith that drives much of the way things work, well, in everything - is finally, finally coming to one of its last and most recalcitrant outposts - the very important realm of employment.

So, let’s first look at the fact that government entities - both at the state and local levels (not at the federal level, yet!) - have, since 2019, enacted a wave of pay transparency laws. The laws are definitely not “one size fits all,” as analysis shows that some jurisdictions require pay disclosure in job listings, while others require employers to disclose salary information either at specific points in the application process and/or upon demand of the job seeker. Still, 10 states (see Table 1: States with Pay Transparency Laws in Place as of Late 2023) and a number of localities (including New York City, Cincinnati, and Toledo) have enacted pay transparency laws in recent years. This movement, yes, largely in the so-called “Blue States” where the Democratic Party holds sway, demonstrates that there is momentum towards the government mandating that salary be disclosed - if not up front, at least earlier in the process than the job offer itself.

Table 1: States with Pay Transparency Laws in Place as of 2023

• California – effective Jan. 1, 2023
• Colorado – effective Jan. 1, 2021
• Connecticut – effective Oct. 1, 2021
• Maryland – effective Oct. 1, 2020
• Nevada – effective Oct. 1, 2021
• New York State – effective Sept. 1, 2023
• Rhode Island – effective Jan. 1, 2023
• Washington – effective Jan. 1, 2023

NOTE: Additionally, Hawaii has a pay transparency law that will take effect in 2024, with Illinois’ version slated to become effective in 2025.

Source: GovDocs - “Pay Transparency Laws” - March 2023.

From my perspective - as a management consultant and professor, while the state and local mandates are indeed important, the more critical development fueling the pay transparency movement is market-based, not government-mandated. But, of course, federal legislation would make transparency the law, not just a growing norm in practice! How fast and how far has pay transparency taken root in the employment marketplace as a “standard practice” has really been phenomenal - outside of a national governmental mandate. Consider that in a recent article from the data analytics firm, Chartr, entitled “Salary Transparency is the New Norm,” their analysts found that, based on data from the preeminent online job market today, Indeed.com, pay is being disclosed upfront by over half of all employers posting on their site! As can be seen in Figure 1 (The Trend Towards Salary Transparency in Online Job Listings) below, this is up significantly just over the past 4 years, growing from approximately 15% of job listings listing pay on Indeed to now over 50% of them! That, my friends, is nothing short of a revolution in the way we look for jobs - and in the way companies and indeed, all organizations, will play the “employment game” - both now and in the years ahead!

Figure 1: The Trend Towards Salary Transparency in Online Job Listings

Source: Chartr - “Salary Transparency is the New Norm” - September 2023

Analysis

At the end of the day, the move towards pay transparency will benefit both job seekers and the organizations who seek to find them. Both parties in the employment game will benefit from the fact that the rules of this game are fast-changing, from a high-stakes version of Texas Hold 'em to a game - or rather an employment marketplace - where all the cards are face-up and both job applicants and employers know what the numbers are in terms of the pay that it will take to fill a position. This is not necessarily the “minimum” pay that an applicant will sometimes reluctantly accept just to get in the door of a company, but a level of compensation that will work towards retaining him or her with that organization. And yes, that should be the goal of all corporate, non-profit, or government agency recruiting - to simply not have to go through the same process again, and again, and again. This is because placement failures cost real dollars - both in terms of losing a valuable employee (and the knowledge/expertise he or she takes with them) and because the recruiting process takes a lot of organizational time, effort, and oh yes, money! And finally, pay transparency does indeed work both ways, for just as job applicants can make decisions based on actual pay numbers being disclosed if not upfront, at least early in the application process, employers can yes, pay for market-based employment surveys, or scour sites like Glassdoor.com - for free - to see what their job applicants might be currently making - either in general or even with their current employers!

In short, speaking as a management expert (yeah, I’ve earned it), we should all - job seekers and hiring organizations alike - look upon a world in which salary transparency is fast becoming the “de facto norm” in terms of job hunting and recruitment is indeed better for all parties involved. Recent research has highlighted how letting “sunlight” into what jobs might actually pay works to the specific benefit of both women and minorities. However, in truth, the new world of work - and job hunting - where pay is openly disclosed - and easily discoverable - changes the employment game for the better for all of us. And yes, it should be a relief to all job seekers - and job recruiters - to engage in the employment process not as a poker game, but as an actual process where both parties can operate with full information and find a mutually beneficial outcome - not a high-stakes game that has, heretofore, not provided transparency on the most important variable in most jobs - i.e. the pay.

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About David Wyld

David Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld. You can subscribe to his Medium article feed at: https://davidwyld.medium.com/subscribe.

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