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Would you like to go shopping without knowing any of the prices until you get to the register? You could spend a lot of time picking out your favorite items only to end up disappointed and leaving empty-handed because the price wasn’t right.
For many job seekers, this is what it can feel like when pay data in job postings is missing. Many might not bother applying to your jobs because it could end up being a waste of their time if the offered pay is not what they need.
Including pay information, or at least a salary range, is quickly becoming the new normal, according to new data from the online job board Indeed. At least 50% of all US-based jobs posted on its site include salary information.
What do these trends mean for employers across the country? Let’s look at the data and how it will affect your future hiring process.
Indeed is one of the most popular online job boards in the US. To promote pay transparency and equity, the site announced in 2022 that it would start including an estimated salary range on all jobs, even hourly jobs, if an employer does not include salary information. This has encouraged employers to share more salary information upfront.
In 2019, salary information was included in less than 20% of job postings on Indeed. Between 2020 and 2022, available salary information increased dramatically to about 30%. After Indeed’s announcement, and increased pressure from state and local governments, that number continued to grow until it reached 50% in August 2023.
This trend is expected to continue rising as potentially more governments pass salary disclosure laws. These laws typically prohibit employers from asking applicants how much they want to be paid and instead require employers to state salary information in the job description or at various points of the hiring process. Additionally, employers must consider the effects of revealing pay information to their current employees.
While this transparency lifts the veil of secrecy around pay, it causes anxiety for employers who may not have their jobs and employees accurately aligned to salary ranges and pay data. As part of total rewards strategies, using salary surveys and benchmarking jobs are rising in importance as employers prepare for the inevitable transparency in the future.
The biggest benefit of including pay data in your job postings is that is can dramatically increase the number of qualified applicants applying for your open positions.
In one study from Adobe, 85% of recent college graduates said they were less likely to apply for a job if the listing did not include the salary range.
Other benefits of being upfront with your salary information is that it can help close any potential racial or gender pay gaps. According to the Pew Research Center, the gender pay gap has barely moved in the last 20 years. In 2022, American women earned about 82 cents for every dollar men earned, compared to 80 cents on the dollar in 2002. This disparity increases dramatically when race is considered. For example, Hispanic women only earn about 70% as much as white men.
When employers include salary data upfront, this can help eliminate any subconscious bias when hiring women or minorities.
While there are obvious pay differences based on geographic area, there are also distinct differences in pay transparency. The most transparent states are typically in the west, while the southern states tend to be the least transparent.
According to Indeed, the state with the most salary information included in job postings is Colorado. Currently, 81% of Colorado job postings on Indeed include salary information. Colorado is followed by Washington (75%) and California (70%). Colorado has had pay disclosure laws since January 2021, longer than any other state, which is one of the primary reasons why they are leading this change.
The states with the lowest rates of transparency on Indeed include Mississippi (33%), Arkansas (36%), and Louisiana (38%).
New York recently passed a statewide salary disclosure law that went into effect on September 17. This and other upcoming state and local laws should help push the rates of pay transparency even higher.
Even without state laws in place, many employers are taking the initiative to be more transparent. For example, 62% of job postings for South Dakota include salary information on Indeed. Vermont is another state where employers are being proactive, with more than 60% of job listings including salary ranges.
We know some of you may be thinking that with an increase in pay transparency the need for salary surveys isn’t as necessary for compensation planning. However, our thoughts here at Mercer are that you need salary surveys more than ever! As you begin (or continue) to include salary information on all job postings, how do you know if what you’re offering is balanced and competitive, especially for new positions? The best way to get an accurate number is by using data available in salary surveys.
These surveys, available through Mercer, give you insights into how much other companies are paying their employees. You can filter through the data to get accurate information about your geographic area, your industry, and the type of position you are offering.
Using that data, you can then determine accurate salary ranges for your jobs, as well as the positioning of new hires versus employees with varied experience and performance.
When your jobs and employees are accurately positioned one to another and versus the external market, you can feel confident that your job postings will be accurate and appealing to potential applicants. This will also help you get ahead of any internal equity concerns.
You must have confidence in what you pay before you can be transparent. Mercer can help give you that confidence. Our salary surveys help you build appealing total reward packages and identify pay premiums for the most in-demand jobs.
No matter how much or how little data you need, Mercer can give you a complete picture of current market salary research trends. This will help give you an advantage over your competitors and help you attract and retain the best talent.
We offer a range of salary survey options including prevailing wage data, general industry surveys, specific industry surveys, hourly pay, and even executive rewards.
Not sure which salary survey is right for you? Give us a call today at 866-605-1031 and we can help you get started.