Dive Brief:
- Salary transparency may change the negotiation game. Sixty-eight percent of respondents to a ResumeBuilder survey of 1,200 U.S. adults said they “definitely would” (23%) or “probably would” (45%) demand to be paid the highest known end of the pay range if given access to pay transparency. If they found co-workers were being paid more for the same job, 63% said they would demand equivalent pay.
- The increasing use of salary transparency — whether by convention or law — is playing a role in recruiting, however. Eighty-five percent of respondents said they’re more likely to apply for a job that lists a salary range. But a disappointing pay range is not necessarily a deal breaker; 56% said they were still likely to apply for such a job if it was otherwise a good fit.
- While the overwhelming majority of respondents supported pay transparency laws, they also expressed concern about the potential impact of such information on relationships among co-workers. Sixty-three percent said they feared it would be “problematic” to know their co-workers’ salaries.
Dive Insight:
Pay transparency is on the rise, with New York City being the latest region to require employers to disclose pay ranges, in what turned out to be a shaky rollout. The city joins a growing list of states and localities requiring the disclosure of such information.
While workers have expressed enthusiasm for pay ranges — as well as outright skepticism when they are missing — the changing convention may give rise to a set of unintended consequences.
Stacie Haller, career counselor, executive recruiter and contributing editor at ResumeBuilder, noted that the top of the salary range is typically intended for those “who check every box on the job descriptions or possibly exceed the requirements with their experience.” Candidates who don’t fit that profile may inadvertently take themselves out of the running if they insist on the highest possible salary when they would be willing to accept something lower, she said in ResumeBuilder’s write-up on its findings.
In a recent Cornell University panel, a research director at Cornell’s School of Industrial and Labor Relations shared the findings of his research into the issue. He found that pay transparency encouraged some employees to work harder, but only those sensitive to equity and fairness. What it did impact was workers’ perception of how much they could gain by working harder.
Many workers seem to have an intuitive understanding of the effects of pay transparency; 61% of ResumeBuilder respondents said salary range laws would reduce pay gaps, a finding that the Cornell research director said was demonstrable. The director also noted that such information could stoke worker envy — a concern more than half of survey respondents seemed to reflect in their worry over the “problematic” aspects of knowing a co-worker’s salary.
Survey respondents also weighed in on how broad pay ranges should be, with most suggesting the top of the range should be no more than 10%-20% higher than the bottom. Haller agreed too wide a range — part of the problem with some of the first attempts to comply with New York City’s law — would be generally undesirable.
“Displaying a very wide salary range does not help anyone,” Haller said. “The variance will likely be unreasonably explained away by companies that will state the position is simply open to a variety of applicants at different career stages. By doing this companies may intentionally or not be allowing for further wage gaps. A wide range is also a turn off for candidates who may feel the company is not listing the range in good faith.”
