Tuesday, November 8, 2016

Data That Does More: The Benefits and Potential Applications of Glassdoor Wage Forecasts

     The Wall Street Journal Article, “How Big Data Is Creating a Detailed Picture of U.S. Earnings” discusses Glassdoor, the job “review” site, on a whole, with an emphasis on the salary data it collects as a required entry for site users, and how it uses those estimates to create an unbiased, non-government issued, forecast of American wage growth. 
     As an Economics major (and junkie), I find Glassdoor’s analysis of wage growth based upon its (vast) user-base’s data to be a very efficient—and honest—use of the data.  Allow me to explain this perspective.
     Glassdoor users utilize the website to write an anonymous “review” of their employer compare their employment title and salary against those of similar employees within their same company, peer companies, or across their respective industry.  In order for these users to get accurate answers (answers that raise their awareness), they need to input their information correctly, and the disclosure of their salary is required.  This builds to the previously made point on honesty.
     As an applied macroeconomist, I frequently interact with wage data, especially the data issued from the Bureau of Labor Statistics (BLS); I often get confused with what data series to analyze and how to interpret it (and I study this field, so imagine the confusion of people without sufficient economics training).  Moreover, this data only talks about hourly and weekly earnings, not salaries on a whole. 
     Glassdoor’s salary data provides a very insightful, and easily interpreted, view into the direction of salaries, all derived directly from mining their user’s information.  And since it can be localized and refined to focus on only certain industries, it allows people the ability to more easily see the trend of wages in different parts of the country and job markets, components that are often left out of BLS data.
     All this said, Glassdoor’s also data serves as a “check” for government-issued statistics.  Since some people—for one reason or another—are skeptical of government data and whether or not its been “massaged”, Glassdoor’s data can serve as a cross-reference.

    Glassdoor’s forecasting of salaries is just one of many uses of the Web’s data that benefits both the public and private sectors in efficient planning and decision-making.  Data, and forecasts, like those provided by Glassdoor can become very useful and telling when discussing an appropriate course of action for, say, monetary policy.  If the government is for the people, then it should utilize the actual, real-time, data of its people in designing and implementing effective policy.  But,not to be so humorous in a post discussing wages and labor, that might put folks out of a job!

Article Source: http://blogs.wsj.com/economics/2016/11/04/how-big-data-is-creating-a-detailed-picture-of-u-s-earnings/

2 comments:

  1. Taylor has picked an interesting article to critique. Over this past summer, I used other recruiting websites, such as Internships.com’s user interface to recruit fellow interns as well as people who have recently entered the work force. I completely agree with Taylor because salary and weekly and hourly earnings are two different breeds. Whenever I assisted in recruiting for the firm I worked for, we had to specify the salary range for the positions we offered. In addition, many employees could rate their employer as well as their firms. For instance, whenever I browsed through Internships.com to get a better feel for the interface, I found that many people were unsatisfied with the internship or position that was with firm I worked with. However, there were some exceptions, such as a few reviewers gave only positive feedback on the website. I had my suspicions why the firm’s ratings weren’t as low as previous interns’ feedback suggested. Let’s say the supervisor I worked under saw these monstrous amounts of reviews. He/she might improve the ratings by reviewing them themselves and ultimately give an outstanding evaluation. Keep in mind, anyone can write these anonymous reviews (employers, employees, supervisors, and etc.).
    I’m not trying to be a “Negative Nancy”, but we should certainly keep a vigilant mind to better understand whether these responses are valid or not. That is unless we’re assuming everyone is inputting correct data, which must be unbiased. However, comparing Glassdoor and Internships.com to the Bureau Labor Statistics can be concluded that these websites are far more accurate than the BLS. In my opinion, data from the BLS is inferior to Glassdoor because the data information the BLS provides is rudimentary and basic. However, the BLS can be an additional asset to Glassdoor. With that being said, Taylor summarized and critiqued a topic few have endeavored. Not many people think about the comparisons between Glassdoor and the BLS in terms of big data.

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  2. I decided to comment on this article because of how much glassdoor has been used by myself and other students in our job search. As we begin to interview and negotiate salaries it is important to know our worth to the company and what negotiating power we have. I think this is an area that many students struggle with as they graduate because they are just happy to get a job but it is the job of the company to get the best talent as inexpensively as possible. The forecasting technology that Taylor mentions gives the potential employee a clearer picture of what the current market offering is. Another important area to look at is how the data is sourced. Taylor mentions the use of BLS data to see a full market picture but this data is user sourced. The employees, both current and past are the creators of the data and it is a more honest idea than what the company will tell you because their goal is to shield that information so they can achieve their goals. This data offered on glassdoor is the best available for a person trying to find current market salaries sourced from current and past employees. Another area that is important to see on glassdoor is promotion potential, future earnings and the company culture. This data is not as transparent and is not necessarily quantifiable by an organization like the BLS. Glassdoor is an excellent resource that offers real-time data and lets potential employees know their worth and what they are getting into prior to joining an organization.

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