The No. 1 Way Hiring Managers Are Promoting Pay Transparency in 2022

New York City just passed a law that will require employers to post salaries on job listings, beginning in April 2022. This is creating waves across the city — and the country. Although the law and similar ones that have appeared in recent years have their detractors, many are praising pay transparency regulations.

A brief history of pay transparency laws in the U.S.

At the beginning of 2021, Colorado’s Equal Pay for Equal Work Act was put into effect. This law, like NYC’s, requires employers to include compensation (including salary, along with bonuses and other benefits) in job listings, among other regulations, like notifying employees of promotional opportunities and keeping job description and wage rate records. 

Meanwhile, other states, such as California, Connecticut, Maryland, Nevada, and Rhode Island, have passed similar measures — not all of which have gone into effect — while Massachusetts and Pennsylvania have pending legislation on the table. 

3 benefits of pay transparency

1. It will promote inclusivity.

According to C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research, pay transparency laws “chip away at issues around pay inequity, [and] can go a long way towards closing the pay gap.”

This is the very purpose of these types of laws: closing equity gaps, particularly for marginalized groups who have long faced discrimination in pay and wages. The hope is that offering transparency upfront will prevent employers from ultimately offering lower salaries to their choice candidates who fall into groups that have so often received less generous packages, even when their qualifications match those of better-paid workers with equivalent roles.

2. It will aid retention efforts.

Pay transparency doesn’t just aid hiring efforts — it could also lead to better retention of current employees. 

A 2021 report from Beqom found that 58% of employees would consider changing jobs for greater pay transparency. Among Gen Z workers, that percentage grows to a staggering 70%. 

How can laws regarding the hiring process affect current employees? Once workers see what their employers are offering newer employees, their workers are in a better position to negotiate for salaries these organizations are advertising to prospective employees.

3. It will expedite the hiring process.

Posting salary ranges will also improve the hiring process for employees and candidates alike. When you don’t post your range, you will receive applications from individuals who are looking for higher compensation packages than you’re willing to offer. Both of you could end up investing significant time and effort into the hiring process — only to finally realize you can’t meet their salary expectations. By posting your salary range, candidates will have a better idea of what to expect, thereby helping you both.

Salary transparency laws have come under some criticism. Still, they have proven themselves to go a long way in aiding employers and employees alike and could revolutionize the way we look at pay — and pay gaps — in the future.

What's your no. 1 piece of pay transparency advice for employers? Share your answer in the comments to help other Fairygodboss'ers!

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