It used to be that salary negotiation was the last step in a lengthy application process. But state laws are putting salary disclosure front and center, with five states now requiring employers to share pay transparency, and two more states coming on board in 2023.
Employers take note. According to a new Monster poll, nearly all workers (98%) believe companies should put salary ranges in job postings, and more than half (53%) would decide not to apply for a job that doesn’t.
“People expect to see a salary range in a job posting, and it makes sense,” says Bryan Driscoll, a lawyer and HR consultant in Orlando, Fla. “If a company only wants to pay half of what I want, let’s not waste either of our time, right?”
That said, companies aren’t necessarily racing to comply.
“Some companies believe that disclosing salaries will turn off potential candidates, as they may worry that the salary offered is too low or too high,” says Michelle Hague, HR manager at solar panel installer Solar Panels Network USA. “Ultimately, the answer depends on a number of factors, including industry trends and state laws.”
Here’s where the situation stands.
Pay Transparency Laws Vary by State
In the U.S., employers in California, Colorado, Connecticut, Maryland, and New York (New York City, specifically) are required to disclose base compensation to job seekers, says Vicki Salemi, a career expert for Monster. And Rhode Island and Washington will follow suit in January 2023. But the laws aren’t uniform across states.
“Requirements can be quite different between jurisdictions,” Salemi says. “For instance, in Colorado, employers are required to list the pay range and benefits for every job opening, whereas in Maryland, employers must provide pay ranges to candidates upon request.”
Differing state laws can make it difficult for companies located in multiple states to comply. “This is absolutely one issue that’s driving companies mad,” Driscoll says. “If a company is fully remote and they want to post a job online, how do they comply with the laws in states like California where they may not have any employees yet? It’s a constant juggle.”
Salary Is Important, but So Is Work-Life Balance
Monster found that six in ten workers (61%) say salary is their top consideration when looking for a new job. But other workers say they place things like work-life balance (16%) and benefits and perks (7%) at the top of their list.
For applicants looking for the full salary lowdown, pay transparency laws haven’t ironed out all of the wrinkles yet. “What I’ve noticed is that companies do not share the full compensation picture on their job postings,” says Brandon Bramley, founder of The Salary Negotiator, a salary negotiation coaching company. “They will usually only list the base salary range or a target compensation for the role. This confuses job seekers because they do not have visibility into the total compensation.”
Workers are Optimistic About the Future of Pay Transparency
More than half of workers (53%) think pay transparency will eventually result in salary equity and smaller or no pay gaps, according to Monster’s data, and 43% think it will lead to higher pay overall for workers.
In general, salary disclosure in job ads may lead to a better match, attracting candidates who are better suited for the role and more likely to be satisfied in their position, says Linda Shaffer, chief people and operations officer at background check company Checkr. “As such, it is an important issue that HR professionals need to carefully consider when crafting job postings and managing their recruitment process.”
Pay Transparency Gives Workers Leverage
Four in ten workers say that if they see a job posting for their position or a similar one from their employer with higher pay, they’d use it as leverage to get a raise, according to Monster’s poll. And if a company violates salary disclosure laws, more than three-quarters (77%) of workers would consider reporting them.
Then, of course, there’s the leverage that pay transparency lends to the job seeking process. “It’s another criteria for a job applicant to reject a company before going down the application rabbit hole,” Driscoll says. “It definitely puts a little more power in the applicant’s hands, but I think that levels the playing field.”
As more states enact laws, companies will have to learn to deal with pay transparency requirements. Employers posting jobs in states and cities with salary disclosure laws should include a salary range on job postings. (This includes remote jobs.)
Employers in states without laws (yet) might take this chance to get ahead of the curve and proactively post salary info. Monster, for instance, has published salaries for all U.S. based jobs at Monster.
“Ultimately, while some employers may continue to resist this trend, many others will likely embrace it in order to attract the best talent,” Hague says. “As a result, we can expect to see continued changes in hiring practices as employers adapt to the evolving landscape of salary disclosure.”