Middle managers are in the hot seat, again.
Difficult conversations about pay are another responsibility falling to middle managers as more states and localities enact salary transparency laws. Many are ill-equipped to navigate those concerns, and experts say more guidance and preparation is needed as more companies post salary information available to both prospective and current employees.
More U.S. states are implementing rules this year requiring employers to include salary ranges in job postings to narrow wage gaps by race and gender.
Many are posting wide ranges, as job seekers use that to their advantage to negotiate higher salaries, and current employees consider it to determine whether they feel they’re fairly compensated.
“These questions are increasing in frequency, and these conversations between managers and their direct reports are,” said Tony Guadagni, senior principal for the human resources peer and practitioner research team at Gartner.
“[Employees] are coming with a different point of view, and that information imbalance that managers could sort of lean on, to a certain extent before, is oftentimes erased,” Guadagni said.
Middle managers have had a particularly tough time over the past year as employers have leaned on them to lead high-functioning hybrid teams, without necessarily training on how to do so effectively.
Plus, middle managers are typically squeezed between those who are actually executing the work and senior leadership and are often not filled in on the full picture behind major strategic decisions or legacy details like pay structures. That has led to widespread anxiety among middle managers.
Why do they make more than I do?
Companies should better train managers on how to approach these situations, though many will have to simply prepare themselves, experts say.
A lack of transparency into how salaries are actually determined for individual employees drives most breakdowns in these conversations, Guadagni said.
“I think a lot of employees sort of think this is pulled out of a hat,” he said.
Employers with detailed procedures and benchmarks for setting pay should be able to clearly outline that to employees who ask. When employees know and understand that, they feel more positively about their pay, he said.
Managers should also be proactive if they sense an employee is disengaged or dissatisfied with their compensation or placement in the organization, Guadagni said.
“In some cases, it might make sense to preempt that conversation rather than waiting for the employee to come to you,” he said.
What are your salary expectations?
The move toward broader salary transparency is also motivating new hires to ask for higher offers. About 41% said they negotiated an offer between April and June this year, up from 38% at the end of last year, according to a recent survey from ZipRecruiter including more than 2,000 respondents.
Success rates in negotiation attempts have remained steady for the past nine months, with over 90% saying they received some improvement in their offer after asking, that survey found.
“Candidates coming through the interview process may push harder on salary ranges and how they’re established,” said Leslie Tarnacki, said CHRO at WorkForce Software.
“Middle managers are going to need to be very well prepared to discuss the many aspects of compensation and benefits in the interview process, beyond what they traditionally have had to do,” she said.
Managers should be able to understand and explain total compensation including other incentives and benefits, she said.
“Compensation really encompasses more than merely the salary piece of it,” she said.