How is Pay Transparency Transforming Job Descriptions?

In recent years, the push for pay transparency has only grown with candidates demanding salary disclosures in job ads and descriptions. Without salary information, candidates doubt employers and feel uncertain about accepting the job. Adzuna’s survey found that when organizations withhold salary information, candidates assume that the company is hiding something (32%), that the company is biased in how they pay their employees (31%), or that the company would underpay them (30%). 

The candidates are ready to give up roles from companies that don’t honor pay transparency. In the same survey by Adzuna, 28% of respondents cited a lack of salary details as their biggest frustration, and 33% said they would not attend an interview without knowing the salary. 

Regardless of the benefits, businesses worry about creating resentment among their employees by disclosing the pay. Others feel unprepared to navigate these conversations without appropriate resources. These concerns stem from inexperience with money talk and the fear of facing the hard truth – they might have an unfair compensation structure.   

With the impending implementation of pay transparency laws, organizations are forced to reconsider their stance toward the concept. Before moving on to the job descriptions, let’s understand the basic concepts of pay transparency. 

The Fundamentals of Pay Transparency 

Essentially, pay transparency promotes openness regarding employee compensation and benefits. Until now, talking about money and salary was considered somewhat taboo within the organization. Employees refrained from talking about money. However, such secrecy encourages pay discrimination and disparity, especially towards women, racial and ethnic minority groups, and individuals belonging to the LGBTQIA+ community. 

According to Pew Research Center, in 2020, women earned 84% of what men earned, and this gap widens for women of color. On the contrary, pay transparency practices might help in reducing gender and racial pay disparity. When more people talk about money, it empowers others to demand higher and fairer wages. Although it’s a long road to complete pay parity, pay transparency can be the first step. 

But is pay transparency right for everyone? Technically, yes. Employees benefit as they can negotiate fairer wages while employers gain a competitive advantage and a satisfied workforce. But the path to pay parity is complicated, and employee conflicts, arbitrary pay practices, and budget constraints are some challenges awaiting organizations. 

It is also important to remember that pay transparency exists on a spectrum, and employers don’t have to choose between secrecy and publicly displaying employee salary records. Pay transparency exists on a spectrum, and you can find your place based on your values and comfort. 

How to Update Your Job Descriptions for Pay Transparency 

Whether your state mandates salary disclosure or not, it might be the time to embrace pay transparency. This is an opportunity to get ahead of the game to create an equitable structure that benefits you and your employees. It strengthens employee relationships, and engagement and improves retention. 

The first step is understanding the existing payment structure and identifying problem areas. This information allows you to develop a better, more comprehensive pay strategy that is adaptable and fair. Through a pay equity analysis, you can locate pay discrepancies between employees and fix them to encourage pay parity. 

Internal HR teams or external compensation consulting firms can lead the pay audit. Using employee demographic and compensation data, you identify comparable roles, group them, and run an analysis to detect discrepancies. The goal of a pay equity audit is to answer questions like: 

• What do people in comparable roles make in the organization? 
• Are some groups disproportionately affected by the salary gap?
• What is your current compensation philosophy? How will you update it? 

With these answers, you can determine your total compensation philosophy that measures the market rate and centers employee needs. Recruiters can use the updated compensation disclosure policies while drafting job descriptions and ads. 

While including compensation in your job descriptions, consider the following best practices: 

• Do include accurate salary bands and ranges based on validated market data. Having definite salary ranges enables candidates to see the factors determining their salary. It also helps them understand their growth and earning potential in an organization. If the role is commission based, try to keep the salary range as close to total compensation as possible. 
• Do emphasize salary in your job post. Compensation is one of the first things candidates notice in a job ad. Keeping it front and center will attract relevant and talented candidates, especially if it is competitive. But if you want to include explanations, benefits, or additional information, it is effective to incorporate the salary within the description. 
• Do consider remote workers when drafting a job description. You must comply with salary disclosure laws if you advertise in a state with salary disclosure laws. But with candidate demands for disclosure, many organizations are moving towards pay transparency even when not required. In a survey, 62% of organizations said they are planning to include salary information even in places without legal mandates. 
• Do measure your efforts. In an economy where candidates skip job posts without salary details, including compensation gives you a competitive advantage. According to the Compensation and Culture Report by Beqom, candidates were more likely to apply when job descriptions were transparent about the benefits and perks offered (81%) and the salary range of the role (79%). Analyzing your job ads and posts to see if they are driving more traffic can help quantify the impact of pay transparency. It also enables you to change your strategy or troubleshoot as required. 

Here are some common mistakes to avoid while mentioning salary in your job descriptions and ads:

• Don’t overlook the additional benefits and perks. All these are a part of the total compensation package and attract candidates. For instance, employees want paid time off and flexible working hours and will consider these aspects when applying for roles. 
• Don’t list salary only for legal compliance. Many organizations think that pay transparency is a legal compliance issue. But it goes beyond that and enhances work culture and business outcomes. Being open about pay helps you achieve workplace diversity, improve employee engagement and retention, and boost your employer brand. 
• Don’t discourage conversations about pay. Pay transparency doesn’t end at including salary in the job ad but is only the first step. For total transparency, it is vital to encourage employees to talk about their wages and benefits. When employees speak openly about salary, they can discuss their concerns and hold organizations accountable. Secondly, restricting such conversations may violate labor laws and cause friction among employees. 

Be Ready for Pay Transparency 

As the pay transparency movement gains momentum and government support, organizations are struggling with the concept of salary disclosure. Most leaders don’t want to cause employee conflicts, while some feel unprepared to tackle this change. Nevertheless, mandated or not, it is only wise to be transparent about pay. It brings in diverse candidates, reduces pay-based discrimination, and promotes employee engagement and satisfaction. While declaring salary details in job ads, you must be accurate, concise, and considerate of candidate needs.  

Want to update your job descriptions for pay transparency? JDXpert can help. To know more, request a demo today!

Authors

Don Berman

Don has spearheaded the adoption of HR and talent management applications and technology driven best practices at large and mid-sized companies throughout the U.S and abroad. He was also instrumental at evolving the focus of JDXpert’s Talent Management platform toward a job description-centric model that resulted in JDXpert becoming the market leader in job description management solutions.