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News

Survey: As More Companies Divulge Salaries, Some Employees Leave for Higher-Paying Jobs

By:
S.J. Steinhardt
Published Date:
Mar 20, 2024

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Sixty percent of companies now share pay ranges in job ads, Payscale’s latest report on compensation best practices revealed. And 14 percent of the employer respondents reported that they are losing talent as a result of employees seeing postings with higher ranges elsewhere, CNBC Make It reported.

The 2023 survey of 5,735 business leaders and human resources professionals found that the share of employers showing pay ranges is up by 15 percent from the previous year. Twenty-one percent  reported listing salaries due to legal requirements, while 39 percent did so in the absence of  any local or state legislation.

Ten states (California, Colorado, Connecticut, Hawaii, Illinois, Massachusetts, New York, Nevada, Rhode Island and Washington) have passed pay range transparency laws, as have many municipalities, including Washington, D.C., Cincinnati, and New York City.

Thirteen percent of businesses reported actively resisting pay transparency, CNBC reported. Their reasons included the expense of putting systems in place to standardize and publicize their pay structure and not wanting competitors to know how much they pay, said Lulu Seikaly, senior employment counsel at Payscale, during a briefing with reporters.

Companies in jurisdictions that have such laws in place have found ways to avoid complying. They may post ranges that are too wide to be helpful, or they may resist posting remote jobs that can be done from a state that requires pay transparency.

There may also be unintended loopholes; New York City’s 2022 pay transparency law covers base salary ranges and not bonuses, meaning that businesses that pay employees most of their compensation in bonuses are not in violation if they list only salaries.

Those companies that do not comply, for whatever reason, may be placing themselves at a competitive disadvantage when it comes to their workforces. Seikaly said that, anecdotally, pay transparency boosts morale, “and for companies that don’t do it, you can tell” the impact it's having through employee engagement and turnover. That is reflected in the 14 percent of business leaders who said that employees have left because they saw job postings with higher pay elsewhere. In addition, 11 percent said that employees have realized through job postings that they are underpaid.

More than one quarter of U.S. workers are covered by such laws, and proposals could double that number in the next few years, CNBC Make It reported in June 2023.