Publishing salaries is just the beginning for pay transparency – experts on what’s next


Salary ranges are now required by law in New York City job postings, and HR teams overseeing nearly 4 million private-sector workers in the city have spent a year preparing.

They’ve stopped working to revise payrolls, make internal payroll adjustments, overhaul applicant tracking systems, train managers about the changes and, perhaps ultimately, prepare for an onslaught of employee questions and concerns. salaries are over.

In general, the intended effect of such wage transparency laws is to give job seekers the power to know how much a role will pay before being enforced, which economists and advocates say is key to closing racial and gender wage gaps.

But there can also be unintended consequences: it can lead to workplace tensions, disgruntled employees can quit, companies can face legal and reputational risks, and businesses can lose their ability to compete in a tight market. a little.

That’s why experts say listing hiring salary ranges is just the beginning of salary transparency efforts.

Sending a salary is ‘not a one-time job’

In many ways, November 1 was really just the starting date for employers to begin their wage transparency efforts.

“It’s not a one-time job,” said Robert Boersma, vice president of operations at Talent.com, a recruiting platform. “Continuously training your managers to have these conversations, then consistently communicating how employees create value for your business and how compensation components reflect that is a work in progress.”

These conversations are bound to come up with prospective hires as much as they do with current employees, said Cassandra Rose, Fringe’s head of people, as the lifestyle benefits are in the market.

He focuses on two ways the law will affect his work in the coming months: Does it change how many people apply for his jobs, including salary groups, the types of candidates who apply for his jobs, and whether candidates actually feel more empowered to negotiate. pay in early hiring interviews?

Second, many people will be equipped with salary groups that go to annual reviews and seasonal increases. Will they use salary data to negotiate merit increases?

Can people opt out?

Tony Guadagni, senior research director at consulting firm Gartner, says that if businesses struggle to explain to people why they’re being paid, not what they’re being paid, it could lead to another wave of layoffs at an already turbulent time in the hiring market.

Rose is pragmatic in weighing well-intentioned outcomes against devastating unintended consequences. Pay transparency “typically helps underrepresented and underpaid people stand up better, but it creates another problem for those who, whether true or false, think they should be compensated more, feel they have to go elsewhere. This , can lead to high attrition. , perhaps for no good reason.”

After the pay transparency law, Colorado saw an increase in the number of people looking for work. However, it’s not entirely clear how much of this is people being brought back into the labor force from outside or workers leaving their old jobs for new ones.

If anything, Boersma adds, workers are already planning to quit and are motivated to search harder when armed with more salary information.

Leaders must quickly double down on their competitive advantage

With visible salary ranges on the table, hiring leaders will have to work harder to make sure their job descriptions showcase all the perks, benefits, and great company culture that set them apart in the hiring market. This will be especially important for small businesses that may not be able to pay as competitively as large corporations in their markets.

To that end, Rose says, the changes could cause some businesses to leave New York City if they can’t pay at the top end of the market, and they see the region’s pool of qualified applicants shrink.

But the move doesn’t mean they’ll avoid pay transparency laws coming to California, Rhode Island and Washington in 2023.

“Even if you think the laws in New York, Rhode Island, Colorado or California don’t apply to you, know that these are just the first of many,” he said. “They’re going to put pressure on other places. I’d advise companies to get ahead of that before the demand you have to compete against.”

Check:

$2 million range, deleted job postings: NYC’s salary transparency law is off to a rough start

Cold and flu season is here, and people are coming to work to get sick again

28-year-old former teacher now earns $110,000 – how working for a company with salary transparency helped

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