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The growing importance of pay transparency: what recruiters need to know

Why is pay transparency trending?

It’s pretty much a guarantee that if you log in to LinkedIn, you’re going to see a viral post in your feed — one complaining about the lack of pay transparency in the interview process.

The poster generally laments the wasted time. Wasted effort. Wasted excitement.

In recent years, the conversation around pay transparency has gained significant traction. This topic, once rarely discussed among peers, is now a common subject, especially in the United States. Gone are the days of hiding your salary from your friends and colleagues. Now, we’re seeing many speak freely about how much they make, how much they spend, and how often they get raises — even on public platforms like LinkedIn and beyond.

As the job market fluctuates, these conversations come in and out of focus. Especially after several rounds of layoffs — when more and more talented workers are on the hunt for their next gig — the concept of efficiency when applying and interviewing becomes a main concern. Horror stories of getting to the final stage of an interview process only to discover the pay range is significantly lower than the candidate is expecting are common.

For candidates, it’s clear that pay transparency sooner rather than later is ideal — and for many recruiters, it’s the same. Why waste dozens of hours vetting a candidate only to find out, after several interviews, that they’re not a good fit due to something that could’ve weeded them out from the start?

In light of these questions and stories, many are left wondering if the only ones who stand to gain from not being transparent are the hiring companies themselves.

Want to learn more about this topic? We dive deep on pay transparency and what it means for recruiters on an episode of our podcast. Listen to it here!

Gaining traction online — and around the water cooler

A notable example of this trend is the rise of the social media account “Salary Transparency Street,” created by Hannah Williams. After discovering she was underpaid, Williams quit her job and began traveling across the United States asking people two simple questions:

What do you do?

How much do you make?

Her goal with the account — which has now bloomed into a full-time job — is to normalize conversations around pay and money. The account now boasts a growing database of over 5,000 reported salaries, accessible at Salary Transparency Street. This database is helping people around the country see what others are getting paid for comparable roles.

Williams notes that she’s also had several people approach her saying that STS has helped them gain the confidence they needed to have awkward money conversations with peers and managers.

The legal push for pay transparency

With the public interest in pay transparency comes added legal pressure.

Pay transparency laws have been enacted across various states, and this trend shows no signs of slowing down in 2024. In 2023, states like Illinois, New York, Rhode Island, Washington, California, and Hawaii implemented laws requiring more pay transparency. Recently, Washington DC also passed a pay transparency law. Effective June 30, 2024, employers with one or more employees must include the pay scale for a position in any job posting and provide information about healthcare benefits before the first interview.

Why pay transparency matters to recruiters

Attracting the right talent

Being upfront about salary information is a practical approach for recruiters. It demonstrates respect for candidates’ time and highlights that their skills and expertise are valued. Transparent salary information can make outreach more compelling and increase the likelihood of connecting with top talent, both inbound and outbound. This transparency is especially crucial for remote roles, where competition is fierce. If candidates know what they can earn elsewhere and you’re not forthcoming with that information, they might not consider your offer worth the gamble.

Demonstrating respect and building trust

Salary discussions have traditionally been sensitive, sometimes even taboo, with candidates fearing judgment for caring about pay. However, pay is a critical factor for any candidate considering a prospective employer. Recruiters who address salary openly and directly can build trust and foster stronger relationships with candidates. Initiating these conversations can significantly enhance mutual respect and trust.

Saving time and resources

Recruitment is a time-intensive process, involving significant effort from both recruiters and candidates. By aligning on salary expectations early, both parties can save time and resources, avoiding surprises later in the process. This efficiency allows both recruiters and candidates to focus on opportunities that are mutually beneficial. If a role isn’t a good fit, recruiters can keep candidates in their database for future opportunities that align with their salary expectations.

Advocacy for pay transparency

Recruiters play a vital role in advocating for pay transparency within hiring organizations. Sharing stories where transparency has led to positive outcomes can help build a case for including salary ranges in job postings. Have you encountered resistance from hiring managers? Faced red tape in your efforts to push for transparency? Or experienced success by being upfront about pay from the start? Share your stories and help drive the change toward a more transparent hiring process.

In conclusion, embracing pay transparency is not just a legal requirement or a trending topic—it’s a strategic approach that benefits both recruiters and candidates. It attracts the right talent, builds trust, saves time, and fosters a culture of openness and fairness in the workplace.

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