Last week, California followed the lead of New York and Colorado in passing legislation that requires salary ranges to be listed in job postings. Not only that, but some leading job boards have announced updates that will have a salary listed for any open role you have, regardless of whether a member of your team enters it; they’ll simply use an algorithm to calculate an estimated pay range.
This most recent passage of legislation means that there is a chance (no matter how slim it seems) that pay transparency laws could impact your organization at some point in the future. While these types of laws may seem like a marked disadvantage at first glance to many employers, there are some ways that pay transparency can actually benefit your organization — both immediately and further into the future. Read on to learn more.
Drive more applicants
When pay transparency is incorporated into already well-written job descriptions, applicants will know exactly what the role entails — and what range they can expect to earn, which can ultimately help you drive more applicants. According to Hireology’s 2021 applicant research report, half of today’s job seekers are applying to more than 16 jobs during their job search. Why would they apply to your role if they have plenty of other options and they don’t know whether or not your role will pay what they need?
Now, you may be concerned that listing pay will only deter job applicants if your range is lower than a competing offer. But it’s important to remember that pay isn’t the only factor applicants consider when looking for a job. In fact, our study found that 84% of job seekers will take a lower paying offer as long as the pay is in an acceptable range and you offer other benefits they’re looking for, such as flexibility and career growth.
Learn more about the needs and expectations of the modern job seeker in our research-based report, The Great Reassessment.
Reduce candidate ghosting
In the same study mentioned earlier, 41% of candidates who have said they ghosted a job opportunity in the past said they did so because they found out the job wasn’t aligned with their needs. By incorporating pay transparency into your job postings, those not truly interested in the position will be less likely to apply — which means you’ll spend less time on candidates who are likely to ghost later on and more time on candidates who are truly a fit for your role.
When you drive more candidates who are aligned with your business’s needs, you’ll be able to run a much faster hiring process overall. This is good news for you: a faster process means you’ll get great folks in seats sooner and you can use your HR team’s time for other tasks that drive revenue at your organization.
Close the gender wage gap
Pay transparency laws are more than just a legislative effort to stabilize wages — they’re largely being put in place to close the gender wage gap. Going into 2022, it was reported that women earn an average of 83 cents per dollar that a male counterpart makes. While this may seem like an overall improvement, this finding has revealed that the pandemic slowed improvement in the gender pay gap.
By mandating that job descriptions for open roles include pay transparency your business can effectively improve the diversity, equity, and inclusion efforts at your company as an afterthought. The premise is this: the salary range is already public, so with frequent training, your hiring managers will be able to compete against any unknown gender biases they may hold by offering a woman with the same work history and education the same salary that they would a man with the same qualifications. The workforce of tomorrow does not look like the ones we’ve experienced in the past; working on your DEI initiatives now by helping to close the gender wage gap will only help your company succeed in the long term.
Pay transparency can seem like a daunting ask of small businesses, especially given the recent instability of the hiring market. While these pay transparency laws have only been put in place in three states of the country so far, there’s no telling if or when other states will pass similar legislation. The good news is that pay transparency benefits both you and your candidates, for many of the same reasons listed here.
Have questions about pay transparency laws at your business? Let’s connect to how Hireology can help you remain compliant no matter where you are in the U.S.!