Perhaps a generation ago, the Abel recruiter would receive a response of, “we pay depending on experience – DOE.” This typical reply was reminiscent of her first experience with a car salesman who initially wanted to know what she had budgeted to pay for a car even before discussing features and models. Times have changed.
In the case of her most recent salary range inquiry to a potential new client accounting firm, there seemed to be a presumption from this question that the salary was the most important job attribute to the recruiter’s applicants; required experience and skills plus job responsibilities and work environment were secondary. Or, if the salary range was not revealed up front, some applicants (typically women and persons of color) might ask for a starting salary below the budgeted range.
In addressing the “old school response” today, the recruiter was quick to identify what has changed in the current labor environment:
- Losing Underpaid Workers: “Paying to market” is one approach to assuring your new (and existing) employees are not lured away by a competitor willing to pay them more.
- Wage Rate Inflation: This has resulted in new employees starting at salaries that do not correlate with existing and trained employees in the company, potentially giving rise to dissatisfaction by existing staff. Be assured, existing staff will find out.
- The Job Market Remains Tight: A well-qualified applicant seeking a new position can quickly identify the best opportunities by first eliminating those postings whose salaries are not competitive. Companies that do not demonstrate a “culture of transparency” can also be dropped from consideration by in-demand workers.
- More Available Data Online: Websites such as Glass door have emerged that aggregate data on actual salaries paid and readily provide it to job seekers (and to the recruiters and companies looking to place them in positions).
- Legislative Efforts Addressing Wage Disparity: An increasing number of states and cities are implementing “salary transparency” laws, requiring those salary ranges to be shared by companies above a certain number of employees. These initiatives include Colorado, California, Maryland, Washington, Rhode Island, and New York City. Legislation is pending in New York, Massachusetts, and South Carolina. The motivation is an effort to thwart ongoing disparities of pay to those women, people of color relative, handicapped, and LGBTQ+ workers to their white male colleagues offering similar experience, skills and job responsibilities – to close the “wage gap.”
When the prospective hiring company was still not yet ready to discuss salary ranges for the openings it was looking to fill, the Abel recruiter offered the advantages of salary disclosure:
- Benchmarking Salary Ranges: The recruiter was well versed on actual salaries being paid to new hires in the area based on placements made through her firm. The hiring company could use that information to establish the salary for an opening, as well as identify existing staff that might be significantly underpaid.
- Setting Applicant Expectations: This same local area salary data would be shared with potential applicants in presenting job openings, to confirm their salary expectations were reasonable for the market and for the position being considered.
- Avoiding Out-of-Range Applicant Interviews: Many second interviews have been cut short when the discussion of salary expectations is finally broached and a wide misalignment is revealed. The company would be assured that the recruiter would not present anyone whose expectations exceeded the budget.
- Legislative Compliance: As this salary transparency requirement trend accelerates and becomes the norm, employers will need to become more comfortable with sharing salary ranges. Even if this openness does not come to the hiring company’s state, they may need to conform if the applicant is from a state that requires it or will be working remotely from such a state. As multi state companies increase transparency, their local competition will need to follow suit.
- Wage Transparency, Not Control: Identifying the salary range for an opening does not suggest whether the salary offered will be at the top or bottom of the range. Offering in the range is not required based on subjective judgment of qualifications. The hiring company remains able to offer an Accountant I position to an under qualified applicant for an Accountant II position, at a lower salary.
Hearing these opportunities, the hiring manager expressed his thankfulness, as his company’s core expertise was accounting and not recruiting accountants. That was clearly Abel Personnel’s expertise. He then provided the recruiter with the salary ranges.
- CNBC Make It, “Here are all the new salary transparency laws going into effect in 2023,” Jennifer Liu, December 29, 2023
- Nonprofit Alliance, “Salary Transparency 2022 Overview”
- BBC Worklife, “The US push for pay transparency,” Josie Cox, September 29, 2022