Salary transparency policies, where companies actively share the salary range on an open job, are becoming the norm.
According to Payscale’s latest compensation best practices report, which surveyed more than 5,700 business leaders and HR professionals as of the end of 2023, the majority, 60%, of companies now share salary ranges in job postings. This share increased by 15% compared to the previous year. and includes 21% of employers who say they list salaries because it is required by law and another 39% who do so regardless of any local or state legislation.
Ten states have passed salary range transparency laws: California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, New York, Nevada, Rhode Island and Washington. Other cities and municipalities, including Washington, D.C.; Cincinnati, Ohio and Toledo, Ohio also have salary range laws on the books.
However, 13% of companies say they actively oppose pay transparency, up slightly from the previous year. Companies say they don’t want to follow the new laws because putting systems in place to standardize and publicize their salary structure is too expensive, or because they don’t want competitors to know how much they pay, Lulu Seikaly, senior employment consultant at Payscale, he said during a briefing with reporters.
Some companies may not fully comply with the new laws by posting ranges that are too wide to be useful, or they may resist posting remote jobs that can be filled by a state that requires salary transparency.
Resistance to pay transparency is not good, Seikaly says.
A separate 2023 Payscale report finds that workers who don’t feel their employer is transparent about pay are more likely to look for a new job.
Anecdotally, pay transparency boosts morale, “and for companies that don’t, you can tell from their internal organizations” through employee engagement and turnover, Seikaly says.
Pay scale experts say employers now bound by pay transparency laws are seeing their workforce engaging with the topic. About 27% say employees have been asking more questions about their pay.
It also empowers workers: 14% of company leaders say employees have left because they saw higher-paying job ads elsewhere, and 11% saw a job ad within the company. organization and realized he was paid less for similar work.
More than 1 in 4 workers live in a location where they are eligible to see the salary range for a role on the job listing.
Business leaders say compensation will be their top challenge for 2024, with half of them saying it is a high-priority area of investment in the coming year, followed closely by recruiting and retention.
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