Welcome to our salary range guide: the missed opportunity in pay transparency

Who we are

At Puck, our mission is to help companies find the best people to fill their open roles. In September 2021 we launched hiring podcasts to help serve this mission. We believe that transparency in job posts ultimately leads to more efficient and effective hiring. Adding extra information up front in the recruiting process saves time at the back end of the process. It’s the fuel that your organization needs to speed up. 

Ultimately, people join teams and not task lists. What people enjoy the most about their job is who they do it with. Puck helps introduce candidates to the team they will work with. Puck’s product already has shown up to a 35% faster time to hire for our customers, like Thyme Care. We have seen what happens to the pipeline and speed when companies take a step towards transparency.

Pay transparency laws

The goal of pay transparency laws is pay equity. We understand that there is a cost to pay equity for businesses. When employees see pay ranges, and they aren’t at the top of the range, they will ask for more. And some underrepresented people will get paid more, by asking for more. This is a business cost. But, there is also a business benefit. Higher retention of underrepresented people and better talent attraction outweigh the cost, particularly for growing companies. 

Today, we are excited to announce a new tool as part of the Puck offering, salary range benchmarking. 

Transparency depends on information being good and easy to find. Our tool makes it easier to find. Our goal is to help teams to take advantage of this real time information to better understand the labor market for their open roles. Giving teams better benchmarks helps them leverage pay transparency laws to attract the right people to their team.

What does pay transparency look like?

Meet Roxy. 

She made $200,000 in her sales role during COVID and moved back to Truckee when remote work was enabled. Her mom lives nearby now and does school pick up. Roxy is now looking for a new job. She knows she needs to make at least $200,000. She sees 3 jobs that look OK. One has no salary range. Another has a range $50,000 to $250,000. The last one at Acme has the range $175,000 - $225,000.

Roxy applies to the Acme job first. She knows she can make what she needs to if she gets the job. So she preps well for her interviews, gets the job and takes it. She drags out scheduling with the other two companies so that Acme finishes its process first. Roxy lives on a budget. Acme being up front that the salary will meet Roxy’s budget is appealing. She also knows that it takes work for a company to come up with a good range. That work is a signal to Roxy that the company is invested in their employees, and wants to treat their employees fairly.

Roxy, 2033. Is she better off?

Roxy prioritizes companies that meet her salary needs. As a result, she was rarely surprised about her salary, and her salary over time. She has been able to have longer stints as an employee and climb the corporate ladder to a VP. She isn’t a VP at the fastest growing company in her space. But she has progressed in her career more than if she hadn’t. Now her kids are old enough that she feels comfortable stepping on the gas on her career.

A wider look

There is plenty of evidence that pay transparency has reduced pay equity gaps, which is its goal. But there are concerns. It’s extra work for an employer to display the salary range up front, and it increases the likelihood people will ask for the top of the range. And, closing the pay gap will cost companies money, if it doesn’t cause attrition. So the law’s implementation isn’t without controversy. So far, Puck’s initial look is that approximately 20% of companies are complying. Although self-reported, ~30% more people are likely to apply to a role with a range, compared to without a range.

Transparency laws in context of the labor market

The national labor force participation rate is 62%, over a full percentage point down from the pre-COVID benchmark of 63%. There were 363k job cuts in 2022, mostly in tech. But across the economy the demand for workers is greater than the supply of workers by ~ 5 million people. Outside of technology, the demographic trends are stronger than the recession winds and layoffs.

To most employers, this means that attrition matters. And it will continue to matter for at least the next decade. This doubles the benefit of transparency. Not only does it bump up a candidate’s likelihood to apply. It also increases the employee’s likelihood to stay. Salary transparency as a law is intended to improve pay equity. But it doesn’t have to be bad for business.

Is it ROI positive?

Yes.

In the context of pay transparency, some people quit but much more often, employees will negotiate. The net effect is likely to be reduced attrition for diverse employees, more competitive talent attraction and a performance cycle that results in higher labor costs. But the internal adjustment is a one time cost. The juice is worth the squeeze. 

For companies that are growing, implementing pay transparency is a no brainer. And in that way, it’s also a market signal to candidates that a company is doing well and growing.

Puck for Recruiting teams

Puck works with recruiting teams to help them build their employer brand. We also help recruiters to tell stories, internally. Recruiters are in the market every day talking to candidates. They need to be able to bring back market insight to internal teams to help them make better decisions. We help recruiters in those conversations, with salary ranges and team introductions.

Say hello to your new teammates, and hello to us. Meet Roxy, and find your people, with Puck.