How to Navigate Pay Transparency Laws

“With pay transparency, the genie is out of the bottle and there is no going back,” says Maggie Hulce, Indeed’s executive vice president and general manager for enterprise. “By setting clearer pay expectations upfront between a job seeker and employer, better matches happen — faster. Pay transparency can also help close pay gaps that still exist across gender, race [and] ethnicity and other factors.”

Pay transparency laws require employers to share salary information, such as the minimum and maximum base pay for a role, in job posts. These laws have been on the rise in the U.S. ever since Colorado became the first state to establish one in 2021, with similar laws emerging in the European Union for pay transparency and equality. 

While the requirements vary, disclosing pay information can present new questions and obstacles for organizations. But there are some efficient ways to incorporate this into your recruiting process — not just to stay in compliance, but to get better hiring results.

Transparency and Successful Recruitment Go Hand in Hand

Pay transparency plays an important role in making the global workplace more equitable. The gender pay gap remains a large problem in 94% of occupations, where women make 82 cents on the dollar compared to men. This gap widens for women of color, with Black women earning 79 cents on the dollar and Hispanic women earning 78 cents. Moreover, LGBTQ+ workers earn around 90 cents for every dollar that the average worker does.

See Also: How to Support Black and Other Underrepresented Employees During Difficult Times

In a Glassdoor survey on what employed and job-seeking professionals are looking for, 81% of employees emphasized the importance of fair and equitable pay. When pay is public knowledge, this helps level the playing field — committing to pay transparency also demonstrates your commitment to pay equity.

In turn, this commitment drives greater interest in applying to your jobs. Fifty-eight percent of employees — and 70% of Gen Z workers — would consider switching jobs for one with greater pay transparency. And when making that decision to switch, 75% of job seekers said they’re more likely to apply for a job if the salary range is listed in the posting. Overall, 67% of job seekers consider salary information to be the most important component of a job description when looking for new opportunities.

Pay transparency not only eases barriers in talent attraction, but also leads to a smoother interview process for both recruiters and applicants. In a survey of U.S. job seekers, 54% say they have turned down a job after completing a long application and interview process once they learned its salary. Meanwhile, 33% said they wouldn’t even attend an interview if the employer did not disclose the salary range beforehand.

How Employers Can Embrace Pay Transparency

We recognize meeting these mandates can be a challenge for employers, especially those with complex hiring needs. In an Indeed survey, U.S. human resources leaders and hiring decision-makers suggested pay transparency might make employees uncomfortable (28%), lead to employee resentment and dissatisfaction (30%), cause overall wage costs to rise (31%) or expose pay ranges to competitors (32%). 

In the end, however, 93% of hiring decision-makers and 93% of HR leaders whose companies adopted pay transparency said they were glad to have done so, with 87% noting it makes their hiring easier. We’ve done it ourselves at Indeed: in 2019, we started including pay ranges in our open roles. 

Navigating changes in recruiting is never easy, but there are ways to streamline the process and keep pay transparency top of mind:

• Act now. Update existing job posts with pay ranges as soon as possible. This way, if or when there are legal requirements to do so, you’re all set. “More than one-third of the open U.S. jobs on Indeed have pay information provided by the employer, as more employers see the power of pay transparency to attract talent, especially in a tight labor market,” says Hulce.

• Follow pay transparency requirements when posting jobs. When posting new jobs through Indeed’s job posting funnel where a law exists requiring employers to include pay information, Indeed requires employers to do so when posting jobs to Indeed, or to indicate that the law does not apply to their post. This will help ensure your jobs can receive applicants.

• Give accurate and helpful information. Qualified applicants are informed about the compensation they deserve. A 2022 Indeed survey showed that 23% of workers in the U.S. and Canada are researching pay or salary on an ongoing basis. If a job description includes a salary far outside the market average — such as a range starting at $0 or with a $100,000 difference between the high and low ends — a potential applicant may move on to the next opportunity. 

• Stay competitive. Indeed Hiring Insights can provide guidelines on what other employers are offering on Indeed. With this tool, you can search the job title you’re recruiting for and its location to see the average salary for similar roles.

Let’s Work to Close the Pay Gap — Together

“Wanting more insight into expected salary ranges of [jobs] is one of the top pieces of feedback that we receive from job seekers,” says Priscilla Koranteng, Indeed’s chief people officer.

By using these strategies to make pay transparency one of your organization’s priorities, you can attract more talent within a challenging hiring environment.

Want more details on our approach? Get more information on Indeed pay transparency in the Indeed Employer Center. For further guidance on next steps for your company, learn how DISH Network successfully incorporated pay transparency into its recruiting process.