[billjings]

As described, it is a fair ways away from what RealPage is doing. Specifically:

* RealPage sells raising rents, not just market info.

* RealPage pressures clients into taking their higher rents.

* RealPage also pressure clients to refuse to rent at lower rates for their own narrow economic interest - in other words, they actively seek to circumvent competitive pressure to keep rents high. (edit: to clarify, I mean they discourage lowering rent to attract a renter)

Pave does sound like it gives businesses a leg up over employees in wage negotiations, but until it e.g. starts promising clients that they will be able to pay lower salaries, the critical element of coordination won't be in the mix. Pave gives you the data, but you can still choose to pay above market to attract talent.

[__loam]

What's the point of getting this data if it's not to pay less money? What is the value add?

[dmattia]

It's almost certainly for the companies to pay less money, but with a more generous reading, I think it could be argued that that doesn't necessarily have to come out of employee salaries. That data could be used to:

- Set reasonable ranges to find the right candidates they are looking for faster and minimize hiring friction

- Standardize payment levels in a way that reduces legal liability in certain states like Colorado/California. Or the most generous reading of "reduces legal liability" would be "promoting fairness".

- Reduce the time spent by HR/other teams of negotiating or setting salaries, as they can simply target some target like "we want to pay more than 60% of companies like us"

- For budgeting/forecasting with new hires, this allows companies to have more confidence in their estimates as they plan hiring.

- Some companies now offer calculators even before you're hired with what your salary/compensation might look like, such as https://posthog.com/handbook/people/compensation

But yes, overall I do believe that most companies also expect a general reduction in salaries when they use these tools.

[kstrauser]

I routinely get emails like "we'd like to hire you as our CTO, and because we just got a bunch of VC money, we're prepared to offer you a generous comp package of up to $90,000 salary plus .05% equity! Must be onsite in San Francisco."

If they were aware of market rates, they could avoid making potential candidates laugh at them.

[__loam]

Founding engineer is the biggest ripoff in tech.

[kstrauser]

But... but... they already did the hard part of coming up with the idea! All you have to do is code it.

[steve_adams_86]

Literally the worst experience of my life. I don’t even mention it on my resume or LinkedIn or anything. I suppose it was a success and the product is still doing fine. I just never want to do that again unless it’s for myself.

[kstrauser]

Were you ever at Crittercism by chance?

[steve_adams_86]

No, this was a sort of AI assistant before AI thing. It was a whole bunch of state machines and decision trees and NLP. It actually worked fairly well.

[Terr_]

> plus .05% equity!

"Dilution? What? Stop worrying about made-up words and let's go change the world!"

[kstrauser]

That actually made me shudder.

[crazygringo]

Because it's just as much to pay more money and get the employees you want.

When you don't know what the market is paying, you're liable to lowball offers and refuse to raise them, and not get the employees you want.

If you know market rates, you can provide reasonable first offers, or have a more accurate idea of how high you should go.

[Wytwwww]

Which would be perfectly fine if you made this completely transparent and made the same information available to your applicants. Them not knowing the market rates (at least not even remotely as accurately) puts them at a significant disadvantage and you can't expect that most company won't exploit because it would be irrational to do that.

[crazygringo]

That's a really interesting idea.

It makes me wonder how it would affect salaries if companies were required to make the salary distribution public for all their roles. So you knew both the range where you were applying, as well as at other companies.

And also how that would interact with unionization. E.g. would it make collective wage bargaining less necessary to some degree? If workers felt they had the data to know they could bargain individually for more money?

[tdeck]

What I've heard from leadership at more than one company is that they choose a percentile of the market they want to pay and then set the compensation there. For example, they may say "we want to pay at the 75th percentile for SWEs with X experience in the Bay Area".

I certainly don't trust that this doesn't hold wages down overall, particularly in the boom hiring market we had until recently.

[danielmarkbruce]

To pay more money.

[Retric]

The limit on pay is the amount of money they can budget to the position not what other people are paying.

[danielmarkbruce]

And how do they arrive at the budgeted number? Lots of companies want to ensure they are paying a sufficiently high number to get sufficiently capable employees in a competitive market. While many (including me) find things like Pave gross, it's not a one way street, they can push wages up.

[Retric]

You’re thinking of the actual budget for a position not what a company could in theory budget.

A small businesses owner who pays themselves whatever is left over after expenses doesn’t care about what other companies pay, the company only has so much money. Apple could increase salaries up to the point where they make zero profit, but the goal is profit maximization not salary maximization.

It’s fundamentally the attempt to limit salaries that causes companies to look at the overall market.

[danielmarkbruce]

Small business owners aren't the target market and are likely to not use such a product.

Hiring well is hard - it's not super obvious if you aren't paying enough or your company isn't desirable or what else is the cause of not seeing good candidates. While in theory you could solve that by wildly overpaying, in practice you have to be able to justify your decision to higher ups in most cases, and pointing to a tool that shows what you really need to pay to get good people can be very helpful. I still find it gross, but, there are practical situations where it will drive salaries higher.

[jimbob45]

RealPage pressures clients

To be clear, they're not "pressuring" them, they simply drop clients as a rule who don't use their suggested rent prices at least 80% of the time.

[A4ET8a8uTh0]

Now that is interesting. I personally find the difference almost without meaning, BUT I am very curious. What is the incentive for them to do this? To they get a point off of the increase?

[ars]

Yah, that's the main difference: RealPage pressured landlords (i.e. tracked then) if they did not raise rents based on its recommendations.

If they had limited themselves to simply reporting the numbers, and letting landlords make their own decisions they would probably be legal.