Salary transparency has been the hottest topic of the new year. California and Washington recently joined New York City and Colorado as the only states or cities requiring employers with 15 or more employees to post salary ranges with their job announcements.
And while every business owner and leadership team have their own reasons for withholding such information on public-facing job ads, it’s a practice that will only help foster more trust between companies and talent.
“Your level of transparency as an employer speaks to the culture you’re trying to build,” said Martin Parsons, owner of Legal Advocacy Headquarters in Carterville, Il. “Companies that are closed off about this type of information run the risk of losing credibility or trustworthiness in the eyes of job candidates or even their own employees.”
The COVID-19 pandemic has played a big role in leveling the playing field between employers and employees. Thanks to more vacancies and a newfound level of confidence, workers are calling their own shots, leaving negative workplace environments, and asking for more money.
It has been a long overdue power shift that is being met with resistance from corporate America. Salary transparency is one of the many aspects of the employer-professional relationship flipped on its head by the pandemic.
Many job announcements require candidates to fill out a preferred salary range, and until salary transparency laws came along, very few job announcements listed potential earnings. Any negotiation expert will tell you to never give the first number, but for years, job candidates have been required to do so.
Now, job seekers are in more control when it comes to their search.
Still, there are many questions facing human resources and talent acquisition teams – especially in California and Washington where businesses are grappling with the new laws.
Here are some tips from Parsons on how to manage salary transparency laws, even if they haven’t yet made it to your state. Consider this information before making any decisions about how you’re sharing this sensitive information.
What if my competitors see it?
“There are safeguards put into the laws for employers worried about losing a competitive advantage. The laws that have been put into place do not seem to be overly strict. You don’t have to disclose exactly how much you’re willing to pay for a certain position – you just need to provide a range.”
Are there legal concerns to posting potential salaries?
“There are some legal ramifications to consider before jumping straight into the practice of sharing salary ranges in your job posts. Be sure you’re ready to match what you’re advertising. If you bring someone through the hiring process and then don’t live up to what you promised as a salary, you can find yourself in trouble for bait-and-switch tactics.”
Any other legal issues to consider?
“There is also the issue of discrimination, which is one of the top issues we see businesses get into when it comes to legal challenges. Salary disparities between males and females could become something you have to explain publicly if that’s how you’re running your business. All of this can be avoided with more thoughtful management, but unfortunately, we see these issues a lot.”
Are there potential issues with internal team culture once you start openly advertising salary ranges for new positions?
“Yes, absolutely. Let’s say you haven’t been very diligent in giving your current employees raises. Then, all of a sudden, they see a similar role advertised for more money in your job announcements. That could result in a whole new set of challenges.”
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