Job postings with salary ranges are fast becoming the new norm
It’s gotten so much easier for job seekers to find out how much a potential job may pay.
Half of US job postings in August advertised at least some employer-provided salary
information, according to a new report by the job board Indeed. That marked the highest share
yet recorded by the firm. Overall, the share of postings with pay transparency has nearly tripled
from its February 2020 level of 18%.
The increase is largely due to a host of pay transparency laws enacted over the past few years by
states and the share of postings with pay data likely will rise with New York State’s disclosure law
going into effect this month.
"Now that the share of postings advertising pay is passing the halfway point, it looks like salary
transparency is here to stay," Cory Stahle, an economist at the Indeed Hiring Lab, told Yahoo
Finance.
"Given the near-tripling transparent postings in the last few years, it’s not looking very likely that
we’ll return to the days of having pay in 15 to 20% of job listings, even in light of a cooling labor
market."
By the end of this year, roughly one in four workers across the country will be covered by a state
or local law that requires businesses to be transparent about their pay range.
New York state's pay-transparency law, which requires employers to disclose a salary range in job
listings, takes effect on Sunday, while New York City's law has been in place since last year.
In preparation for the new law, many employers in New York state had already jumped on
board. More than six in 10 (61%) of job postings in New York State featured some level of pay
transparency in August, almost double from a year prior (31%), according to the Indeed data.
In California and Washington state, laws requiring employers to post salary ranges on all
advertised job postings went into effect on Jan. 1. Similar pay disclosure laws are in place in
Colorado, while Maryland and Rhode Island require salary information to be provided when an
applicant requests it.
More than eight in 10 (81%) of listings in Colorado featured salary data, making it the most
transparent state. Its law took effect in 2021 and was the first in the country to require employers
to reveal the salary nitty gritty.
Other states with a lofty share of salary data listed on their job postings also have laws on the
books, including California, where 70% of listings include pay details, and Washington state with
75%.
While salary transparency rates are rising overall, that growth is not occurring evenly across state
lines and geographic regions. In general, employers in the West provide pay details in postings at
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the highest rate, while employers in the South are less likely to advertise salary upfront, according
to the research.
And, for the most part, employers are not disclosing the pay information out of the goodness of
their hearts. Pay transparency rates have grown the most in cities subject to pay disclosure laws.
Better bargaining power for job seekers
The upshot of having the new laws for job seekers is that knowing a salary range for a position
can help job hunters catch a whiff of what a job is likely to pay and how far they can push in
negotiating compensation.
And for many employers, posting those salaries, well, paid off.
"When it comes to pay transparency, SHRM research has found that 70% of organizations that
list pay ranges in job postings say doing so has led to more people applying, while 66% said
disclosing pay has increased the quality of applicants they’re seeing," Emily Dickens, chief of staff
and head of public affairs at SHRM, the Society for Human Resource Management, told Yahoo
Finance.
"Moreover, 65% of companies that list pay ranges said it makes them more competitive in
attracting top talent."
One concern, though, is that now job openings have begun to decline, employers may opt to pull
back on how much they reveal about their pay structure.
"It’s possible that employers may continue to advertise pay in postings, but reduce the precision
of that information as recruiting intensity fades," Stahle said.
There are many reasons why employers resist posting detailed salary data. For example, knowing
what a job pays elsewhere can make it more appealing for current employees to jump ship for
higher pay. It can also give them the courage to request a raise based on the salaries posted by
their employer for new hires in the same or similar position.
In fact, 36% of 1,300 HR professionals surveyed by the Society for Human Resource Management
said transparency laws caused more current employees to ask about receiving a pay raise.
As the need to hire eases, some of that might "already be happening," Stahle added. "Job postings
containing pay information are less likely to advertise an exact salary or wage than they were a
few years ago (only 22% mentioned precise pay this spring, down from 38% before the
pandemic)," he said.
While there is much to be applauded for the open pay disclosure, the biggest flaw so far is
laughably wide pay ranges, often covering more than a six-figure span.
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"Indeed data shows that pay ranges have widened in areas with new pay transparency
requirements since last year," Stahle said.
For example, the gap between the low and high end of salaries in San Jose increased to 25% from
17.5% in one year. A recent job posting for a software engineer at Google in San Jose pays a salary
ranging from $157,000 to $235,000 plus bonus, equity, and benefits.
"People are shortchanging themselves if they look at just the salary number and not all the
components that go into a compensation package," Dickens said. "Employers covered by the new
law need to publish their salaries, but they remain free to also publish full compensation if it is in
their interest to do so."
In general, though, salary ranges have widened most in mid-to-high paying sectors like
pharmacy and medical information and have narrowed in lower-paying jobs like driving and
food preparation and services, where finding and retaining workers is hardest right now, Stahle
said.
"To some degree, this information, even when the range is wide, is going to help job seekers,"
Julia Pollak, chief economist at ZipRecruiter, the employment search site, previously told Yahoo
Finance. "It'll help them to focus on jobs that actually provide the pay that they want, rather than
going down a rabbit hole, writing out a whole application, then finding that the job pays much
less than they need."
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