The recent introduction and adoption of legislation requiring job postings to include salary ranges in states like California and Washington have made the conversation around pay transparency more relevant than ever. However, according to an article in The Playbook, such laws, well-intentioned as they are, may have an unintended consequence: widening salary ranges.
California and Washington are new additions to a growing collective of states with pay transparency legislation on the books, joining such states as Colorado, Connecticut, Maryland, Nevada, and Rhode Island. New York is poised to join later this year when its own state law takes effect.
Partially in response to this swell of legislation, a recent Indeed HiringLab report noted a considerable increase in job postings including salary information – from 20% pre-pandemic to 45% as of April. The most common information provided by far was a salary range, and tracking changes in the spread of these ranges – the difference between the high and low end of the range – has revealed some potentially troublesome trends.
Of all postings that provide a salary range, the average spread, according to the Indeed data, sits around 17%. However, in some states that have adopted pay transparency laws, the spread is growing rapidly. Seattle’s median salary range spread rose from 14.3% to 20.7%, while the spread in San Jose hit 25% after previously hovering around 17.6%.
This increase may suggest that employers in states with new pay transparency laws may just be providing wide ranges to comply with the legislation without providing any clarity or useful information for job candidates and workers. Broad and non-specific salary ranges can ultimately prove frustrating to both candidates and employers, as ranges that dip below what workers are willing to accept will prompt them to look elsewhere.
Regardless of whether your state has codified salary transparency, failing to provide a salary range altogether is also increasingly unacceptable to the job candidates of today. A recent survey by Skynova indicates that 71% of workers surveyed reported that they would be less likely to apply to a job posting that didn’t include any salary information.
If the law and public opinion are increasingly mandating pay transparency in job postings, how can employers ensure that the information provided is beneficial to all involved parties and serves to attract talent rather than repel it? Recruiters say the answer may be… more transparency – specifically around how salary ranges are determined.
The key to successfully navigating this push for pay transparency is clear communication with both candidates and existing employees to provide crucial context, according to Muriel Taing, the senior compensation consultant at Mercer. “The reality is that many employees and candidates don’t have this context to understand how pay is determined, how pay ranges are created, and how they can expect to move through the pay range,” says Taing. “Without appropriate context, pay will continue to be a one-sided conversation with employees remaining bewildered, searching for answers and creating their own narrative. Leading employers are addressing this issue more broadly by driving a narrative that makes pay range more meaningful and useful to employees and candidates.”
If you have any questions or concerns about how to incorporate pay transparency at your business, a Harger Howe Account Manager would be happy to assist you. For more information about Harger Howe Advertising and the services we provide, please contact our President Mike Walsh at mwalsh@hargerhowe.com.
