This company is fixing a huge problem in the tech industry through salary transparency

Salary negotiation tips can make an impact when trying to increase your pay, but they can only take you so far. A better weapon would be if you could cite the salaries of your counterparts at other companies. This is something that a company called Levels.fyi can off; they’ve been an integral player in helping tech employees get the salaries they deserve by demystifying the complex world of levels at tech companies.

The journey of Levels.FYI

Levels.fyi was born out of the frustration of Zaheer Mohiuddin when he was leaving LinkedIn for a job at Amazon in 2017. He and his friend, and eventual Levels.fyi co-founder Zuhayeer Musa, were having trouble figuring out where their former roles placed them at their new companies in terms of job level and, more importantly, salary.

Tech companies differ from other types of companies in their compensation structure as they use a tier-based hierarchy. When you get hired at a large company like Google you have a job title but you also have a level that is assigned to you. The level determines the seniority of your role and also what salary band you fall into. Google, by the way, has 11 levels for engineers while Microsoft levels hit the 60s so you can see how complex this is.

Zuhayeer Musa told Ladders, “As we scrolled through a few tech forums we noticed many questions along the same lines, like ‘At what level can a Senior SDE/Level 63 at Microsoft be placed at Google?’ After a little more digging, we found similar questions across the web and realized there just had to be a simpler way to map engineering job titles to experience levels. It struck us that there was a rather large information gap and that Zaheer’s annoyance was actually an opportunity.”

Out of frustration comes opportunity

The two men began crowdsourcing information about salaries and benefits. “Salary transparency allows for people to get paid fairly. Especially people who don’t have in-network access to peers in the industry. Understanding compensation especially in tech is important because it consists of multiple variable components that make up your total yearly compensation. The first step to getting paid fairly is having a good understanding of what your compensation entails,” Musa told Ladders.

In simple terms, Total Compensation in a tech role means adding up all the ways you are paid:

  • Base salary
  • Bonus
  • Equity (stock) compensation
  • Benefits

You can read more about the breakdown of each of these components on Levels.fyi but what this shows is that tech salaries are complex and have a lot of factors tied to them. The more the job candidate knows about their salary, the stronger their case is for getting a raise or negotiating a new job offer.

This is where Levels.fyi comes in using extensive crowdsourced data that is then leveraged to create leveling charts to track how levels at one company measure up with those at another — seniority at a tech company is ranked on a level scale — and then how compensation can also differ within those levels.

Example of Levels.fyi levels for software engineers at Facebook and Google.

Levels.fyi just simplifies the process of determining pay in a very convoluted system. You can use your previous level at a company or use Level’s standard definitions on their site to get a rough estimate of your salary. Determining your level is essential according to Musa. “Leveling can also depend on things such as your interview performance, tenure in level, and scope of work – but the main reason it is important to align early on leveling is that it determines your pay! Companies have salary bands established by level. Once you know your level, you can use Levels.fyi to find a high anchor compensation target to negotiate up your original offer. Companies will almost never give you their best offer upfront, and so it’s worth having a ballpark for how wide the band can get.”

The benefits of pay transparency

Secrecy around pay transparency at tech companies has been an issue for years. In addition to people not knowing what they should be making and what compensation to ask for in new roles, this has contributed to the gender pay gap. If women, who are notoriously underrepresented in tech roles already, were underpaid in a previous tech role, that lack of knowledge will follow her to a new employer. This continues to widen the gap.

“The gender wage gap has definitely been illuminated through our data too. We did an analysis on our 2020 dataset across a normalized set of levels and found that women make less than men at each level. But not only that, the gap compounds the higher in level you go, which highlights the importance of negotiating and ensuring parity from early on in your career,” Musa said.

Levels.fyi expands past tech

As more people in tech began using Levels.fyi other people, including those working in non-technical sectors, also saw the benefits of this service. The company now provides insight into how compensation packages work, and in the past year, the two founders started offering negotiation services with hands-on training from former recruiters at companies including Amazon and Google.

So what is their best piece of advice when negotiating a salary? “The simplest advice we give people is to not reveal your salary expectations early on in your process with a company. Instead, you can reflect that question to your recruiter and ask what the salary range is for the role. In many states within the U.S., employers legally have to provide a salary range if you ask them.”

The company has helped negotiate over $75 million in total compensation after only offering these services for less than a year. As for future plans for Levels.fyi, Musa says “We want to be the go-to place for anyone thinking about their career. In addition to expanding to other industries, we’re planning to build better support for all regions around the world. We already support parts of Europe, Canada, and Singapore through our negotiation service and have received a lot of positive feedback so far.

Levels.fyi is now rolling out a community aspect to our site where people can help each other by asking questions and exchanging information directly through verified and pseudonymous identities.

Learn more about how Levels.fyi can help you here.