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A new study into salary transparency across the US has revealed over a third (36%) of LinkedIn job ads in the US don’t include salary details, and which states are the most/least salary transparent.
People Managing People, analyzed over 4,000 live job ads across the US on LinkedIn.
Key findings include:
California, Washington and New York are the most salary-transparent states in the US
59% of vacant roles in Maryland don’t include salary details, despite it being against the law in this state
80% of job ads in the education sector don’t include salary details, and half (50%) of finance roles don’t
David Rice, HR expert at People Managing People, explains why lack of salary transparency is fuelling gender and racial pay gaps in the US. As it stands, women earn 16% less than men, and black women earn 64% of what white men earn in the US.
How does a lack of salary transparency create pay gaps around gender and race?
"By advocating for transparency and clarity in job advertisements, we can create a more equitable job market where candidates feel empowered to pursue opportunities that meet their financial expectations, and they are paid for the value they will bring to a business.
"It's important for pay equity, closing pay gaps and attracting talent, but businesses clearly still do not feel it’s their job to drive pay equity and they’ll likely get interested applicants either way.
"In the US, women still earn 16% less than men, and black women earn 64% of what white men earn. That is not acceptable, and businesses need to take greater responsibility for closing the gap and striving for equality."
Is this a uniquely American problem?
"While the issue is prevalent in the United States, it's not uniquely American. A lot of countries around the world face pay gaps tied to gender, race, and other factors, though the scale and visibility of the problem vary by region. Countries with stronger labor laws, mandatory salary reporting, and cultural support for pay equity— often European nations—tend to have narrower gaps. The US gets a lot of attention because it stands out due to its combination of decentralized labor laws and a culture of secrecy around salaries."
What can be done to fix it?
"Salary transparency policies at companies and legislation from states are changing things a bit, but some argue it may not have the desired impact. I think two other things that can help are to standardize compensation reviews so regular audits are carried out to examine pay discrepancies across gender and race, this can help organizations identify and correct inequities. They can also start shifting the culture to embrace open salary discussions. Promoting a culture where employees feel comfortable discussing salary without fear of retaliation can help expose discrepancies and drive change. While it may be a bit uncomfortable, creating that open environment will help some people who struggle with confidence in conversations around salary negotiation."
What are the obstacles?
"Non-transparency is an established culture, so there's significant obstacles. Many employers and employees are uncomfortable discussing salaries, often considering it a private matter. Companies often resist salary transparency citing fears that it will lead to internal conflict or force them to adjust salaries upward, increasing costs.
"On top of that, not all states or countries have robust laws enforcing pay equity, which leaves the issue largely unchecked in many places, there is no motivation to change it, and sometimes very little public discourse on it."
Is it improving?
"There are tidbits of progress, but the pace is slow and uneven. In the US, several states and cities have enacted laws and many countries in Europe are also moving towards mandatory pay audits and transparency. Companies are also starting to adopt fair pay practices voluntarily due to growing public awareness and pressure from employees and advocacy groups."
Are some states doing better than others?
"It's not surprising that states where laws have been implemented have higher levels of political support for such measures and more organized advocacy groups pushing for change. Additionally, the demographic and economic differences across states lead to varying levels of urgency and political will to address pay equity issues."
The most salary transparent states are:
| The least salary transparent states are:
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Do employers care?
"At this point, it's a bigger focus for large corporations. Those organizations are more so dealing with the growing awareness, public scrutiny, and legal requirements. For smaller companies, there is less scrutiny and for some industries or regions where there is less legal pressure or public attention, employers may not be as motivated to tackle the issue."
What would make them care?
"Same thing that had them caring about DEI after George Floyd. Public pressure and employee activism. But for things to actually change you need three things. 1) a sustained effort from people to keep that pressure and activism going 2) accountability around this issue that ensures leaders have their feet held to the fire if there isn't measured improvement in these areas and 3) a business impact. If it impacts the bottom line because top talent is willing to leave over this and go to a company that's getting it right, that other company has a competitive advantage. Nothing motivates business leaders like an impact to the business."
Where will we be in a few years?
'I think we'll continue to see more laws on this issue, and I think we'll also start to see data on whether the actions taken so far are actually having any positive impacts. That may shift the narratives about what needs to be done exactly. Technology may also play a role, with tools that allow employees to compare salaries more easily, further pressuring employers to maintain equitable pay structures. However, the pace of change will largely depend on continued advocacy, political action, and the level of public interest in the issue of pay gaps. It's top of mind until the next natural disaster, then climate change becomes a big focus or until the next big school shooting, police brutality or government fraud case, then something else becomes the center of attention. That's the biggest challenge, keeping it in focus and holding people accountable for results."
