With the tight labor market impacting the country for the past couple of years, it’s not uncommon to see signs advertising job openings along with the starting pay and even sign-on bonuses. Despite the increased prevalence of such job ads, the reality is that there has traditionally been very little pay transparency, at least in the United States.
Ranges Common, Actual Pay Not So Much
When job applicants apply for a position, they may have a rough idea of the salary range, although that is certainly not guaranteed. Often, they do not know the starting pay until an offer has been made. Even then, it’s rarely clear whether a job offer reflects the average pay for similar roles in the company or falls somewhere above or below that average.
But the United States may be on the verge of an inflection point when it comes to pay transparency, writes Meredith Turits in an article for BBC Worklife.
A year ago, the idea that prospective employees in the United States would have the ability to learn the salary before applying for a job was pretty unrealistic, Turits says. But, that’s not the case in other countries.
“While many European nations already have policies mandating employers list pay, in the US, pay transparency legislation has been limited to a handful of states,” Turits notes. But, she adds, in 2022, “high-profile moves occurred in New York City, California and Washington—notable because, as major employment hubs, it’s nearly impossible for many firms to exclude these locations during recruitment.”
True Pay Transparency May Be Elusive
Despite this progress, many industry observers believe we have a long way to go before we achieve true wage transparency. For example, wage gaps that primarily impact women, people of color, and LGBTQ workers may still be hard to tackle under recent legislation. “First, since exact salaries are not listed, it’s possible that the groups most affected will still land up on the low end of the spectrum (and, in some cases, wage ranges have been so broad, they’re nearly meaningless),” adds Turits. “There is also the blind spot of bonuses, as additional compensation such as performance pay and equity fall outside the law.”
While there remains room for improvement, experts expect increasing progress in 2023. At some point, it’s possible that enough state and local governments and employers will accept pay transparency that those that haven’t yet embraced the practice will be forced to follow suit simply to stay competitive in the race for talent.
Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.