A California law requiring nearly all employers hiring in the state to list salary ranges in job postings will go into effect next year, and New York’s governor is expected to sign similar legislation soon. Colorado began requiring pay transparency in 2021. National job boards including Indeed.com say more postings are spelling out salary ranges overall, regardless of where the jobs are located.
Job seekers like pay transparency because the salary data allows them to be more targeted in their search, according to compensation specialists and researchers. Posted pay ranges can also help people assess whether their own compensation is at market rate. Many managers say public salary information saves them time with candidates since there is a better chance that the company and the worker are on the same page when it comes to pay.
“ The good thing about pay-range transparency laws is that it sets an absolute floor for candidates, so people won’t be totally in the dark about a company’s pay practices,” said David Buckmaster, who led teams that designed compensation structures at Nike Inc. and Starbucks Corp., and wrote the book “Fair Pay.”
Candidates should know that a lot of companies only post their pay-range minimums to meet the compliance requirements, which means salaries might be more negotiable than the posted data suggest in some cases, Mr. Buck-master said. Paris Clarke, 24, works in customer service and is currently looking for a new role. She said she is less likely to apply for a position if the posting doesn’t include a pay range. A range helps her weed out salaries she considers insufficient for a job’s duties or her experience level. Ms. Clarke, who lives in Citrus Heights, Calif., said she is seeking between $18 and $22 an hour. Pay ranges are designed to be wide. Some salary ranges can span tens of thousands of dollars to account for potential hires with a variety of education and experience levels, Mr. Buckmaster said. Where a person falls in a range depends on how a company values a person’s skill set and the competition for the job, according to compensation specialists and human-resource executives.
Government efforts to compel companies to publish pay ranges are intended to boost pay equity and address gender and racial wage gaps by ensuring people doing the same jobs earn similar pay. A 2017 Pew Research Center study found 25% of employed women said they had earned less than a man who was doing the same job; 5% of men said they had earned less than a woman doing the same job. A 2019 study of 1.8 million salary responses by Payscale, a compensation-software and data provider, found that Black men earned 98 cents for every dollar earned by white men with the same job and qualifications. Whether these laws will help close the gaps remains unclear, because disparities can exist within wide salary ranges, human-resource officers and compensation coaches said. Workers shouldn’t assume that posted salary ranges mean that higher pay isn’t negotiable, Mr. Buck-master said. A candidate can try to ask for more than the base pay being offered, but will need to demonstrate skills far above the typical candidate to make their case. “Anything more than 10% above max will be a tough sell,” he added.
PHOTO ILLUSTRATION BY ELENA SCOTTI/ THE WALL STREET JOURNAL, ISTOCK
Salary disclosures can motivate workers to apply for and stay in jobs, said Alexandra Carter, director of the Mediation Clinic at Columbia Law School and author of the book “Ask for More.” She cited a recent survey by Visier, a people-analytics firm, that showed more than two-thirds of workers said they would switch jobs in favor of a place with greater pay transparency. (More than 20% of respondents didn’t want any transparency around pay, according to Visier.) “Pay transparency will quickly become a market advantage for companies that implement it,” she said. People tend to assume they should be paid at the top of the range. About two-thirds of job seekers think they are paid below market, according to 2021 research by Payscale. Of those employees who believe they are paid below their market value, 51% are paid at or above market, the Payscale report found.
HubSpot, a Boston-based digital marketing firm, decided to disclose salary ranges for all U.S.-based open roles in July. It trained managers to explain the factors that go into setting pay and why employees land where they do in a pay range, said Katie Burke, chief people officer of HubSpot.
Ben Cook, chief executive of Riva, a New York-based startup that coaches workers on negotiating compensation, said that pay ranges require more homework from job hunters than taking a job’s posted pay range at face value, especially in years like this one where inflation has raised peoples’ costs and pay needs. Riva helped a client negotiate for a 10% raise after the engineer in North Carolina had already accepted a new job offer, but before he officially started the new role. Mr. Cook said the client, fresh out of a master’s degree program, accepted a job with a pay range that was set in January, but the start date was in June. In the months between, the cost of living had risen significantly. To justify his ask for more money, Riva coached him to cite several regional competitors with similar job openings that were posted more recently with higher salaries.
