“Honesty is the best policy.”
This is a phrase many people have used or lived by. It’s often used as a guiding principle, so it’s hard to accept when that energy is not reciprocated, regardless of the space.
One of the spaces where this concept is most covert is job seeking. Those interested in jumping into the often tumultuous space of job hunting come to the table with a list of requirements that’s best for them.
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And while everyone may have different priorities around what would make a job relationship ideal, nearly everyone wants to earn a livable wage that supports their lifestyle and affirms their value.
The problem, however, is that not all companies are open and honest about their budgets and the suggested salary aligned with posted positions. This process can be problematic for both the employer and the employee.
It doesn’t have to be this way. Both entities can benefit from salary transparency. Here’s why it matters and the current trends.
Salary transparency is growing among employers in the United States as laws and policies are being implemented to support the practice.
According to The New York Times, some companies are less apprehensive about disclosing what salaries are for their vacant roles. The report noted that the level of transparency is changing how hiring managers approach setting salaries, as some of its effects may impact earning potential.
LaKeisha Caton, a partner at the law firm Pryor Cashman, spoke to The New York Times about the more significant impact of being open about salaries and how it’s part of a more extensive conversation and culture shift for everyone involved.
“I don’t think you can just post the salary, and then that’s it,” Canton said. “I think it’s actually leading to more conversations internally regarding, How do we think about pay?”
The fight for salary transparency ultimately boils down to an equity issue.
According to a Forbes report, salary transparency will be instrumental in the fight for more significant pay equity. When the disclosure of salaries becomes mandatory, it assists in job negotiations and eliminating pay gaps mainly impacted by women and minority applicants.
In a New York Times interview, an economic subject matter expert doubled down on this sentiment of mandated salary transparency leading to more equitable job outcomes.
“It is totally 100 percent true across all the studies I’ve seen, with very few exceptions,” Zoe Cullen, an economist at Harvard Business School, said.
The outlet went on to add that Cullen believes the current and incoming transparency laws are “very good” at minimizing wage disparities.
CNBC outlines which states have current and incoming laws impacting what salary transparency means for the industry as a whole.
To date, the following states include:
- California – employers must list the salary range for all postings for jobs based out of the state for companies that have at least 15 employees and at least one of them in California.
- Colorado – employers must the list the salary range and break down of all benefits for job postings based out of the state.
- Connecticut – employers are required to share the salary range when an prospective employee asks or if an offer is extended, which ever comes first. The same rule applies if a person changes positions or if the employee requests an updated range for their role.
- Maryland – employers are required to share the salary range if an applicant requests it.
- Nevada – regardless if the applicant ask for it, employers are required to provide the salary range for a job after the initial interview. The law applies to internal promotions and transfers.
- Rhode Island – employers are required to disclose the salary range upon request and before extending any formal compensation offer. This also applies to internal promotions and transfers. Employees can also request salary updates at any time.
- Washington – employers must list the minimum and maximum salaries for all job postings. This applicable to organizations with at least 15 employees and those based in the state but allow remote work.
However, other states are building policies and laws only for a few areas and cities. Those include:
- Cincinnati, OH – employers must share salaries after they extend an offer and if an employee or applicant asks for it.
- Jersey City, New Jersey – employers must the list the salary range and break down of all benefits for job postings based out of the state.
- New York
- Ithaca – employers must the list the salary range for all job postings. This is applicable to internal transfers and promotions.
- New York City – employers must list the salary range for all postings for jobs based out of the state.
- Westchester County – employers must list the minimum and maximum salaries for all job postings.
- Toledo, OH – employers must share salaries after they extend an offer and if an employee or applicant asks for it.
As the concept of sharing salary information in job postings becomes more widely accepted, even companies that aren’t legally required could start recognizing the benefits of transparency. Eventually, this could lead to greater efficiency and effectiveness in the job search process, as job seekers can make more informed decisions based on clear and accurate information about compensation.
Kristopher Williams, Sr. Human Resources Business Partner at Warner Bros. Discovery detailed why listing job salaries gives insight into what a company values.
“For companies, it shows that we value transparency. Also, it helps to recruit to possibly discourage those who are not within the range not to apply. As a result, recruiters are able to focus on those who fall within the range,” Williams said.
Conversely, Williams noted that it takes out some guesswork in job seeking.
“It benefits employees by showing them compensation, so there are no surprises. For internal employees in the same role, it shows if they are being fairly compensated. Also, if the range is not what an employee/candidate wants, they don’t waste their time applying,” he continued.
Both employees and employers can better shape the holistic job industry’s trajectory when salaries are open and exposed. It leads to accountability, data around performance outcomes, and processes for individual and collective strategies.
The Harvard Business Review discusses the dimensions of this work, which are primarily positive, but also face critique.
Ultimately, salary transparency leaves both parties at the forefront of decision-making and balances the power between employers and employees.
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