‘Quiet quitting’, ‘rage applying’ and now ‘career cushioning’. These are some of the popular buzzwords in the workplace over the past year or two. What’s quickly gaining attention is also the hot topic of ‘pay transparency’ – also known as ‘salary transparency’ – as governments, businesses and individuals around the globe ramp up actions towards this.

In 2022, we looked at what’s making companies hesitant to disclose salary bands in job listings. But this year, we are seeing a shift as employers adjust to the new environment. 

What does Salary Transparency – and Salary Range Transparency – mean?

Pay transparency can be interpreted in different ways, but the core meaning remains: being open in communicating and sharing compensation information. And in the workplace, it means doing that with current and prospective employees.   

The concept of salary transparency is not a novel one at all. In fact, it dates back to as early as the 18th century in Sweden and Norway – and Finland later – with the Nordics’ culture of openness that extends to salary transparency. It’s as open as going online and seeing how much their neighbor or friend earns!

While not to this extent, the rest of the world has not been sleeping on this either, coming up with transparency measures like pay reporting and audits. Today, pay disclosure laws are being enacted to break the enduring taboo around salary sharing, signalling “a new era of transparency in the workplace” – and one against pay inequity. 

An important thing to note is that ‘salary transparency’ and ‘salary range transparency’ are commonly used interchangeably, but they are not the same.

At JobWiz, we define salary range transparency as the practice for employers to publicize compensation ranges for a specific role in the business. This will often include a starting pay and a maximum salary. On the other hand, salary transparency encompasses a set of wide-ranging actions companies can take to communicate about pay with current employees, candidates, and the public on an ongoing basis.

2023 is the year of salary range transparency 

Where laws pave the way for salary range requirements 

Starting 2020/21, regulations around salary transparency have gone into effect in multiple US states and cities, specifically for job seekers and employees. 

As of January 2023, New York City, California and Washington joined Colorado in requiring businesses to disclose salary ranges in all job advertisements. Similar laws have been adopted in Maryland, Nevada and Connecticut, with more to follow soon, covering at least “1 in 4 workers” in the country by this year according to compensation management software PayScale.  

For states with no such legislation yet, it’s predicted that change would happen regardless, as pay transparency gathers momentum. And for major employment and talent hubs New York and California, big companies have the potential to set the standards with their regional and possibly global workforce. We have seen Microsoft, Citigroup and AmEx taking the lead to proactively share pay range information in all job postings across the US even when not required by law. 

“The momentum going into 2023 is encouraging that real change is ahead – not only in areas where laws are taking effect, but increasingly at the national level as well. More employers are also starting to see it as a competitive edge to attract talent in a tight labor market. And pay transparency can also help close pay gaps that still exist across gender, race, and ethnicity.”

Maggie Hulce, executive vice president and general manager of enterprise at Indeed, as quoted here

This steady drumbeat around pay range transparency has made its way to other parts of the world too. 

With pay transparency for jobseekers a key component, the new EU Equal Pay and Transparency Directive is one step away from being approved – by this month (March 2023) – to lay the legislative foundation for EU member states. It too has the potential to influence beyond and across the globe, not necessarily as a mandate, but “as a principle” or a corporate strategy for better workforce alignment, according to workplace equity analytics provider Syndio.

Over in the UK, while not within the jurisdiction, there are similar calls to make salary range transparency the law, one of which by talent platform Liberty Hive. This comes in the wake of a government pilot project last year for employers to list salary details on job adverts and stop asking about salary history during recruitment. 

For Asia and the Pacific, pay transparency is starting to catch up as well, as countries turn to that to tackle gender employment and pay gaps. In Japan, from this year onwards, employers will have to publicly disclose their gender wage gaps and account for any disparity. Similar legislation is also introduced in Australia, after the country abolishes pay secrecy clauses that traditionally prohibit workers from openly discussing pay.

Despite a different pace, one thing’s for sure – the days of salary as a taboo subject are numbered. It’s only a matter of time that pay range disclosure will become a standard for employees, especially as we step into a new world of work. 

Employers to embrace compensation transparency

Legislation or not, transparency around employee compensation is becoming a pressing priority for companies and HR practitioners in today’s evolving workforce and war for talent. It’s not just the workforce’s composition that has changed, but so have employee expectations and priorities – such as flexibility, purpose and support – accelerated by the pandemic and amid a looming economic downturn.

Businesses find themselves increasingly having to refine their employee experience, total rewards and talent strategies to attract and retain valuable employees. And pay transparency emerges as a “positive driver of retention and culture”, shaping talent initiatives like pay equity analysis, formalizing of salary grades/bands and job architecture. In fact, some progressive tech companies are offering salary transparency policies that outpace legislation as a “critical employee engagement factor” around commitments to gender pay equity, as well as diversity and inclusion. 

Mercer’s Global Talent Trends Study 2023 echoes a similar sentiment among HR leaders in Asia to address the challenges of talent attraction and retention, as they identified employee experience and compensation philosophy as the top priorities. 

The growing move towards pay transparency happens against the backdrop of a talent war in today’s competitive labor market. Multiple studies have shown that salary is still top of mind for job seekers, and according to LinkedIn’s recent survey, 91% said that pay range in job ads would affect their decision to apply, highlighting a need for salary range transparency.

To win this battle for talent, employers turn to offering above-average salaries to new hires – often higher than incumbent workers in similar roles – without reviewing and adjusting existing compensation. This creates a problem of “pay compression“, leading to disgruntled employees and even attrition, as they seek higher pay elsewhere.

Earlier this month, New York City tech worker Kimberly Nguyen went viral when she applied for her job title in her company which pays up to $90k more, sparking a heated debate about pay equity. Coincidentally, pay compression made it to the Singapore news last week where the sharp spike in graduate salaries suggests junior employees can be getting paid less than new hires.  

Clearly, to build an equitable and inclusive workforce and futureproof the business, employers would have to do more than posting salary ranges. That said, disclosing salary ranges has already reaped rewards for companies in terms of recruitment. 

According to SHRM Research, 70% of organizations that provide pay ranges in job listings said it has led to more applications, 66% discovered that it has increased their quality of applicants, and 65% found it makes them more competitive in attracting top talent. 

A new workforce that is more willing to talk salary

For years, when salary was still hush-hush, crowd-sourced spreadsheets and platforms like Glassdoor and Levels.fyi stood in as references for pay ranges. Even till today, many employees still turn to those openly shared salary data to compare and negotiate for compensation when the official data is not available. 

Overall there is less hesitation to discuss the once-taboo topic of salary and related issues like pay transparency and discrimination. On one hand, younger employees – who make up a growing share of the workforce – are not shying away from salary conversations. Rather, they have a greater expectation for communication, information sharing, data-driven decisions, and fairness. 

A survey by Bankrate found that 42% of Gen Z workers and 40% of millennials have shared their salary information with their professional network, as compared to only 31% of Gen Xers and 19% of baby boomers. 

On the other hand, the Internet and social media serve as the “online watercooler” for people to reveal information about themselves, including those about their work and salary. This gives rise to pay transparency advocates-slash-influencers like Hannah Williams’ Salary Transparency Street who help put the topic under the spotlight and onto people’s – as well as the media’s – radars. 

Even on Google, the search for ‘pay transparency’ has been on an upward trajectory in the last six months. 

While these are not entirely new and the effectiveness of some initiatives is probably a debate for another day, it points at a pressing demand to address pay transparency. 

Ground-up conversations and initiatives, legislations from the top as well as organizational change from within can make 2023 truly the year of salary range transparency. 

How can salary range transparency benefit me?

For employers, making salary bands accessible internally and externally can positively impact not only recruitment and retention, but also the company’s culture.

• More effective and efficient hiring with better quality in applications and interviews for hiring managers
• Drive employee engagement with career development planning and support managers in related conversations
• Improve talent retention and reduce attrition with the knowledge of fair pay and growth opportunities
• Contribute to diversity and equity with current and future employees
• Motivate employee growth and boost productivity with increased visibility into the connection between performance and pay
• Build trust and foster transparency by communicating the company’s commitment to fair pay

For employees, the knowledge of salary band information can set you up for success not just in your compensation package, but also in long-term career planning.

• Ensure fair opportunities and compensation
• More successful pay rise negotiations
• Less susceptible to pay compression
• More clarity of career progression with the company
• Greater motivation and job satisfaction

For job seekers, being aware of the salary ranges sets the right expectations from the start.

• More effective job search and selection
• Better job application and interview experience
• Assurance of fair remuneration and pay negotiation
• More informed decision making

Publicizing salary ranges can appear intimidating, but the rewards far outweigh the effort. Salary range transparency can differentiate organizations and make the company an employer of choice.

This is what we aim to accomplish at JobWiz, with our mission to make salary ranges and perks public. All job postings on our platform come with transparent salary information to help job seekers make their decisions. Our smart recommendations also ensure job seekers get matched to jobs that meet their expectations in terms of salary, perks and more. Check it out now!