The implementation of pay transparency laws has led to a decrease in the advertised salary ranges by employers, according to a report by ZipRecruiter. While a majority of firms are complying with the new laws by disclosing salary ranges in job descriptions, some companies are not adhering to the regulations, and others are posting pay ranges even when not required. As a result, the growth of advertised wages for new hires is slowing, and in some cases, companies are offering lower pay ranges.
Furthermore, the report highlights that companies have been leaving certain job positions unfilled because candidates are requesting higher pay than what the company is willing to offer. This has caused nearly half of the companies surveyed to lower pay bands for certain roles in the past year. Julia Pollak, the chief economist at ZipRecruiter, explains that employers are attempting to reset candidate expectations. However, this approach can threaten internal equity and incentives, as there needs to be consistent salary growth to retain and engage employees.
Although some companies are not complying with pay transparency laws, Revelio Labs, a workforce analytics firm, reports that nearly 40% of firms voluntarily disclose salaries for jobs in states that do not have a legal requirement. This phenomenon can be attributed to the rise of remote work, making it difficult for employers to adjust postings to comply with different state and local requirements. SalesLoft, a revenue workflow platform based in Atlanta, is one such company that publishes pay for all its U.S. job postings. In addition to legal regulations, employees, particularly from Generation Z, are increasingly open to discussing their pay with peers, prompting companies to adopt comprehensive strategies for addressing pay and determining the various motivating factors for their workforce.