Salary Disclosure Becoming Common in US Job Ads
In recent months, job seekers in the United States have noticed a welcome change: an increasing number of job postings now include salary ranges. According to data from job search platform Indeed, over half of all job ads on the site now provide salary information, indicating a growing trend towards pay transparency.
This shift towards salary disclosure can be attributed to the implementation of pay transparency laws in several US states. Colorado, New York City, California, and Washington are among the states that have enacted legislation requiring employers to include salary details in job advertisements. The move has been met with enthusiasm from job seekers, with a survey conducted by Indeed earlier this year revealing that 75 percent of respondents would be more likely to apply for a job if it included salary data.
Not only is salary disclosure beneficial for potential job applicants, but it also appears to attract more candidates. Indeed’s survey indicated that job postings with pay rates saw a 30 percent increase in applicants. This finding makes sense given the current labor market, which is characterized by a shortage of skilled workers. In order to attract top talent, companies are resorting to pay transparency as a tactic.
One of the most recent examples of pay transparency legislation is New York’s new law, which requires employers to provide precise pay rates or ranges in job advertisements. However, some employers have attempted to exploit a “good faith” requirement by presenting unrealistic salary ranges in their job postings. This practice undermines the purpose of pay transparency laws and only serves to confuse and frustrate job seekers.
For companies, the decision to set wide salary ranges can be a strategic move to maintain bargaining power during the hiring process. However, research has shown that narrowing salary ranges tends to attract more applicants, especially in high-demand occupations. Additionally, different job markets have witnessed varying trends in salary ranges. In employer-friendly markets, wider salary bands are common, while in more competitive industries like tech, the salary spreads for positions such as software developers can reach up to a 35 percent gap between high and low pay rates.
As the labor market continues to tighten, it is increasingly crucial for employers to consider the benefits of salary disclosure. Not only does it attract more applicants, but it also contributes to creating a fair and transparent hiring process. Job seekers’ preferences are clear and align with pay transparency efforts, as they crave transparency and readily respond to job postings that include salary information.
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