Traditionally, the workplace has upheld an almost universal taboo around the subject of money. Whilst pay transparency is gaining traction around the globe, within the US around half of all employees adhere to either a formal policy or informal unspoken agreement that pay does not get discussed.
This taboo around pay is however breaking down. More than ever, businesses are relenting to disclosing pay. Local and national legislation is making its way into firms, to increase the transparency around remuneration.
These range from requirements to report aggregated pay statistics by gender, to laws that require the ‘wholesale disclosure’ of individual pay or even tax returns. For example, New York City joined a list of lawmakers now requiring businesses to post what it called ‘good faith’ pay ranges with all new job postings in November of 2022.
Other states, such as Washington, California and Rhode Island have this year put in place similar requirements.
Other workers across the nation can discover more about pay ranges from sites such as Glassdoor, which encourages anonymous reporting from staff themselves.
According to Financial Times data, the share of US job postings that include salary ranges has more than doubled since 2020 as a result of such movement. A total of 43.7% of US job postings on Indeed contained salary ranges last month, up from 18.4% in February of 2020.
Talent & the fight for equitable pay
So what effect is this having on talent? Whilst the movement as a whole can be seen as a positive, in which workers have far more oversight over where they sit within their corporate remuneration hierarchy, the initial findings are that this information is causing some backlash.
In the broad, many workers are discovering that more junior positions, or job postings for roles beneath their assumed salary banding, are in fact being advertised at higher salaries than they themselves are on.
For example, one anonymous worker recently told The FT that after seeing a job posting for a junior position for more money than they made, the individual felt disillusioned and resolved to reduce her investment in her company.
“It is the biggest slap in the face. Ever since then, I don’t work a minute over 40 hours. I do not stay late online. I will not take on extra work.”
And herein lies the lesson for HR and talent managers. Existing talent is more than likely more valuable, and economical, than external talent. If external talent is to be brought in at a higher salary, in the age of pay transparency, you must presume that existing staff will see this. Ask yourself, are you investing additional funds into a higher turnover rate, or contributing to increased retention?