Niki is director, service operations with Insperity. She specializes in employee onboarding, human capital management and HR infrastructure.
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According to the U.S. Bureau of Labor Statistics, preliminary reports for November 2021 indicate 10.6 million job openings and 4.5 million resignations, further fueling a job-seeker’s market. As employers continue to navigate the challenges of attracting and retaining top talent, they remain steadfast in their efforts to find the perfect combination of employee benefits and perks. However, savvy employers that leverage trending legislation might effectively move one step closer to reaching their goals.
Some states and local jurisdictions have passed laws that pave the way for employees who are curious, albeit hesitant, about salary during the recruiting and hiring process. More specifically, New York City recently passed a law requiring employers to include the minimum and maximum starting salary for any advertised job, promotion or transfer opportunity. This is part of a growing trend of wage transparency laws enacted in some form or fashion in 10 states, with three more under consideration.
In an effort to stand out in the crowd, employers should take this cue to proactively continue the conversation and leverage salary transparency for a competitive advantage. Following are seven reasons why:
Addressing Compensation
When employers list salary ranges, it automatically addresses job seekers’ most burning question by sharing information that has previously been avoided or discussed much later in the hiring process. Job applicants can be in a precarious situation when it comes to salary. One of the first things they want to know is how much the position pays. Many times, they are concerned about asking the question too soon, if at all, because it might come across as a negative. If they fail to ask, they may lose any negotiating power and run the risk of being underpaid.
Displaying Respect
The job search and recruiting/hiring process can be long and arduous for all parties, as candidates and hiring managers spend hours, days, weeks and months searching, reviewing, preparing and interviewing to fill positions. One way to streamline the process by saving time and energy is to include salary ranges on job postings, which displays respect for all.
When job seekers know the salary in advance, they can make informed decisions about whether or not to apply, rather than waiting further along in the process, only to be disappointed if the salary does not fall within their desired range. This can be frustrating for both sides because the time-consuming process should be spent on legitimate candidates. Job seekers lose valuable time finding new positions, and hiring managers must regroup and start over.
Reducing Salary Negotiations
Posting salary ranges that are not too broad will help reduce the number of salary negotiations that take place for external and internal candidates. When the range is made known upfront, there is less room for discretion and interpretation, which saves time, fills positions sooner and leads to faster onboarding and productivity. In some cases, knowing the range also helps existing employees feel more secure in their current roles and less inclined to pursue the time-consuming process of seeking a raise.
Remaining In Compliance
As the trend for hiring remote workers continues to accelerate, posting salary ranges helps companies remain in compliance with current legislation when they advertise and recruit in other cities and states. When employers implement a standard, companywide approach to salary transparency, it does not limit their reach but saves time and resources.
Enabling Employees To Focus
When salary ranges are made public, it can help alleviate worker concerns and avoid any waste of time, enabling employees to continue focusing on their work and productivity. As new jobs, promotions and transfer opportunities become available and posted, it can cause perfectly happy employees to question their own situations. In addition, while it is human nature for workers to wonder about the compensation of co-workers, some employees might take it to an extreme trying to figure it out to determine their own value. This can be a distraction, leading to decreased engagement and productivity that can also have a negative impact on the team.
Promoting The Brand
When employers list salary ranges, it can have a positive impact on the brand from numerous perspectives. The transparency reflects well on job seekers and current employees because the company is helping to build trust by sharing the range. Since there are no deep, dark secrets about how the company compensates its workers, it might attract more highly skilled workers, especially if competitors do not reveal their salary ranges.
Existing employees will no longer be left wondering how their salary compares to others, giving them the leverage to ask for a raise and the company an opportunity to retain top talent. When companies make an effort to be straightforward about their compensation levels, it can boost their reputation among qualified job seekers, valued employees, important stakeholders and the community, leading to preferred employer status.
Making A Clear Distinction
As a caveat, it is important for employers to remember that there is a clear distinction between salary transparency and salary history. Salary discussions do not work both ways for employers in 34 states and municipalities where legislation prohibits employers from asking job seekers for salary history on applications and during the recruiting/hiring process. This is especially pertinent as more companies hire remote workers, so it is a good idea to have up-to-date information.
When employers take a proactive approach to salary transparency by including salary ranges on job postings, they are positioning their companies for a competitive advantage and long-term success by attracting and retaining top talent.
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