Pay transparency is here to stay. Nearly two-thirds (62%) of employers say they always include the salary range in a job ad, an 8.3% increase from 2022.
While this trend is largely driven by new laws requiring pay transparency, legal compliance isn’t the only reason employers are sharing salary information. Though nearly one in five organizations report being transparent mostly due to regulations, another 42% say their transparency goes beyond what’s required or is not motivated by regulations alone.
Benefits of including a pay range on job postings
While some organizations include pay ranges on job postings to comply with a legal requirement, others embrace this level of transparency for the many benefits it brings.
1. Ensure legal compliance
Pay range transparency in job postings is required in a growing number of U.S. jurisdictions, including California, Colorado, and New York. It’s estimated that 20% of all U.S. workers are now covered by pay transparency laws.
Similar pay transparency laws are being introduced globally. For example, The European Union’s Pay Transparency Act requires employers to include a pay scale in job listings or prior to an interview.
Sharing pay ranges in job postings demonstrates your organization’s commitment to following the law and promoting fairness in the workplace.
2. Attract talent
Skilled talent will always be in high demand. Embracing pay transparency in your job postings can help you attract and engage more in-demand candidates for your open roles. In fact, 91% of U.S.-based respondents said that including salary ranges in a job post would affect their decision to apply.
It’s not just about the money: 56% of job seekers said they were still likely to apply for a job with a disappointing pay range if the role was otherwise a good fit.
3. Boost recruiter productivity
Compensation is the top reason candidates decline job offers. It’s not only disappointing to lose a candidate at a late stage in your hiring process — it’s a drain on your talent acquisition team’s productivity.
Including your salary range on job postings allows candidates to self-select out if your range doesn’t meet their expectations. This will save your team time from screening and interviewing candidates you can’t realistically win.
4. Improve pay equity
Openly sharing pay ranges on job postings allows candidates and employees to see how their offer or compensation stack up to the minimum and maximum salary for a given role. This can help employers stay accountable for fair pay practices and promote less secrecy around compensation — both of which can contribute to pay equity.
In fact, one study found that increased wage transparency led to a 20% decline in the gender pay gap for U.S. academics.
5. Increase employee retention
Employees who believe their pay is inequitable have a 15% lower intent to stay with their employer than employees who believe they’re paid equitably.
Openly sharing pay ranges in job posts fosters transparency and builds trust that your organization pays people fairly.
When employees feel they’re being paid fairly for their work, it can improve their morale and job satisfaction. They’ll be more likely to feel valued and respected, which can lead to higher levels of engagement and retention.
Potential drawbacks of including a salary range on job postings
While there are many worthwhile reasons to include salary information on job postings, there are some potential downsides that may hold employers back.
1. Distributed teams have wide wage ranges
Distributed teams that use local market compensation rates may find it difficult to create good faith pay ranges for open positions.
For example, the salary range for a given role might be $130,000-$170,000 in Tampa while it’s $200,000-$250,000 in New York City. That’s a wide range to include and candidates in areas with a lower cost of market are more likely to be disappointed in the job offers they receive.
2. Candidates may expect the high end of your range
Two-thirds of job seekers say they “definitely would” (23%) or “probably would” (45%) demand a job offer at the top of the pay range if they knew what it was. This can lead to disappointment or resentment if your offer comes in lower or it could lead to negotiations that bring about pay inequities.
3. Low ranges repel exceptional candidates
There may be cases where a candidate’s offer could exceed your planned pay range.
For example, you could meet an exceptional candidate and offer them a role at a higher job level than originally planned. Or if you have a performance-based compensation structure, your base salary range may be much lower than your expected total compensation. In these cases, adding a salary range to your job postings could cause your job to be filtered out by candidates or dissuade them from applying.
4. Conflict with current employees
Disclosing what you’re willing to pay a new hire can cause conflict with your current employees if they believe they’re being paid unfairly. They may not understand why they fall into the range where they do — and they especially won’t understand if they’re below-range.
As it stands, only 32% of employees feel they’re paid fairly. Providing data that supports their assumption can cause dissatisfaction, disengagement, and turnover.
Among employers hesitant to increase pay transparency, 46% cite possible employee reactions as a reason they’re holding back.
5. Compensation intel can sway talent toward competitors
Public-facing salary ranges indicate employee pay, making it easier for competitors to craft a job offer that might lure your employees away. Similarly, job postings with pay ranges show your competitors what they may need to offer candidates in your shared talent pool. This can inflate wages as companies try to compete against one another for skilled candidates.
Best practices for disclosing pay in job posts
If you’re ready to share salary ranges on your job postings, following best practices can help you get the most benefit with the least downside.
1. Comply with local regulations
If your company is subject to pay transparency legislation, it’s in your best interest to follow it. Laws around employee compensation regularly change, so stay on top of them to ensure you remain in compliance.
2. Have a clear compensation strategy
Get your compensation strategy in order before you begin adding pay ranges to your job postings.
Build job levels and salary ranges that align with your strategy and make a plan to review them — and employee pay — regularly. This will help you make strategic pay decisions and communicate them with both candidates and employees.
3. Train your managers
Your managers may already be fielding questions about pay from their team members and increased salary transparency could increase the frequency of these discussions.
Help your managers understand how employee compensation is determined and how to talk about pay with their direct reports.
4. Share a target hiring range in job posts
New employees are generally offered a starting salary in the low- to mid-range so there’s room for future salary increases. Mitigate the risk of candidates expecting the high end of your range by sharing a smaller target range for your role alongside the full pay scale.
A narrower pay range has the added benefit of building trust with your candidates. A Washington State University study found that job ads with wide pay ranges make employers seem less trustworthy, deterring job applicants. A smaller range can help your organization appear more honest during the application process — and when you make a job offer.
5. Include total compensation and employee benefits
Your base salary range may not be the only form of compensation you offer — and it’s not the only thing job candidates are considering.
Include other forms of compensation and employee benefits in your job descriptions, such as bonuses, stock options, healthcare plans, and retirement programs. It’s also a good idea to mention remote work, flex hours, or a reduced work week if you offer them, as many job seekers are particularly interested in flexible work arrangements.
6. Make sure employee compensation aligns with posted salary ranges
Pay transparency may bring unfair pay practices to light, which can affect both morale and retention.
Run a compensation analysis to ensure employee pay aligns with your compensation strategy. You can mitigate the risk of employee dissatisfaction by addressing any pay discrepancies before sharing salary ranges on your job posts.
7. Communicate about your compensation strategy with candidates and employees
When you present an offer, tell the candidate a bit about how your compensation strategy works, why they’re being offered a given starting salary, and what they can do to earn more. This demonstrates your commitment to fair pay, builds trust, and limits negotiations.
Existing employees should have access to this information as well and feel comfortable discussing it with their managers.
Final thoughts: Should you include salary ranges on job postings?
Some organizations are required to include salary ranges on job postings per local regulations. In that case, you should absolutely include salary ranges on job postings to ensure compliance.
Other organizations will need to decide what’s best for their unique team. Weigh the pros and cons and lean on your company values to make a choice.
Generally speaking, sharing pay ranges on job postings is the right decision. Candidates and employees have come to expect this level of transparency from employers — and they deserve to get it.
