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Pay transparency is when an employer openly communicates pay-related information through established practices to current or prospective employees. Employers can provide this information through various channels, such as online job sites, job postings or during an interview. As a result of changing labor markets, more and more employees are demanding pay transparency. Further, some jurisdictions are now requiring employers to share pay information, meaning that this trend is impacting more and more employers.
This article discusses rules surrounding pay transparency across the country and workers’ growing demand for it. This article also explains employer advantages and strategies to implement pay transparency practices in an organization.
Pay Transparency Across the Nation
As demands for pay transparency increase, some states have passed legislation requiring organizations to be transparent. In recent years, California, Colorado, Connecticut, Maryland, Nevada, Rhode Island and Washington have all passed pay transparency laws. Some cities, including New York City, Jersey City and Cincinnati, have also passed such laws.
Employers should be aware that pay transparency laws vary depending on the jurisdiction. Some jurisdictions only require employers to provide pay ranges if the candidate requests it, while others require employers to disclose it upfront, as evidenced by the recent California law requiring employers with 15 or more employees to include pay scale information in all job postings, including job postings on third-party sites, starting Jan. 1, 2023.
Employee Demand for Pay Transparency
The tight labor market has led employees to make new demands, such as remote working arrangements, enhanced benefits and more—among them is pay transparency. Pay-related websites, such as Glassdoor, have helped normalize pay transparency as an integral part of an individual’s employment search and facilitate employee-driven conversations about pay. Employees value transparency because it holds employers accountable for providing similar wages for similar roles, builds trust and helps employees easily see if they are being compensated fairly.
Visier’s 2022 Pay Transparency Pulse Report found the most important factor potential employees consider when deciding whether to apply for a job is their estimated compensation. Further, 11% of candidates will not apply or interview for a role without knowing the salary band, and 50% have completely abandoned an application or interview process because the pay did not meet their expectations once the employer revealed it. Salary information is important to job applicants because they want fair pay—competitive with the marketplace and in line with what they contributed—and to avoid applying and interviewing for jobs they ultimately won’t accept due to insufficient pay. Applicants also see pay transparency as a way to develop trust with their potential employer at the outset of the employment relationship.
By Jennifer Outcelt, Creative Content Architect
I’ve seen a fair number of job listings in the 10 years I’ve been in the work force. Luckily, I’ve been stable and happy at my current job for almost 7 years, but I’ve watched as friends and family around me beat down that well worn path towards a new vocation. One thing I am always surprised by is the lack of some very important information within the job listings I’ve seen. What’s that, you ask? Well, what would be the most important information to YOU? Salary, I presume. Or at least it’s in your top three.
When my husband left the military and started his own job hunt, we looked for jobs that checked a few key boxes; Do you want to do this job? Are you able to do this job? Is the salary enough for this job to be worth it? While a “Yep” on the first two questions was promising, if the last question was a “Nope” then the job was disqualified from the running. The conundrum though, was that a “Yep” or a “Nope” was not always easy to come by. Hardly any of the postings listed a salary! We were able to tell that he needed to be able to lift a box of papers… but not how much he would make each year?!
There is a crazy low percentage (12%) of US job postings that regard salary as a crucial piece of information for potential job seekers. There are several reasons why Employers opt out of upfront salary disclosure, but are the perceived benefits really hurting them in the long run? I came across a great article on CNN that breaks down the salary posting debate. Give it a read, then think about the job posting that put you in the job you have now. Would it have made a difference? Maybe the entirety of the US workforce should be chanting, “Show Us the Money!”