“It is important to not only pay employees fairly, but to explain why their pay is fair. “If you post a salary range for an advertised role that is much higher than what your current employee makes in the same role, that will likely cause a decline in engagement and motivate the employee to begin searching for new jobs - especially if you can’t objectively explain why the discrepancy exists,” Lexi Clarke, Payscale’s chief human resources officer, told Yahoo Finance.

Nearly 1 in 5 organizations (19%) are posting salary ranges without confidence in how current employees will react, according to Payscale’s recent “Compensation Best Practices Report.” And less than half (49%) of organizations train managers on pay communications. “Not only does it provide job seekers with more control during negotiations, but it also holds employers accountable for any pay discrepancies that exist.”īut in some cases, it appears that companies are ill-prepared for the fallout from these disclosures.

“Eliminating wage gaps and achieving equal pay for equal work is heavily dependent on the presence of pay transparency,” Kristen Shah, Indeed’s career trends expert, told Yahoo Finance. Comparable pay disclosure laws are already in place in Colorado and New York City, while Maryland and Rhode Island require salary information to be provided when an applicant requests it. 1 and a similar one following later this year in New York state. State and local laws requiring pay disclosures are gaining traction with legislation in California and Washington state going into effect Jan. “However, many employees who find out that newly-hired peers earn more are quick to look for new jobs themselves, creating a vicious cycle of high turnover and unfilled positions.” ‘Holds employers accountable for any pay discrepancies’

“Rising inflation and labor shortages have required organizations to increase starting salaries to remain competitive,” Robin Erickson, vice president of human capital at The Conference Board, told Yahoo Finance. The issue is this for employers: Given that the job market remains robust, employees - especially younger workers - stunned to discover their pay is far below the advertised one are more likely to walk out.

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