{"id":9738,"date":"2023-02-05T17:49:16","date_gmt":"2023-02-05T21:49:16","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=9738"},"modified":"2023-02-05T17:49:59","modified_gmt":"2023-02-05T21:49:59","slug":"pay-transparency-laws-usher-in-head-scratching-pay-ranges-in-job-postings","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=9738","title":{"rendered":"Pay transparency laws usher in head-scratching pay ranges in job postings"},"content":{"rendered":"
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The biggest shortcoming so far of new state salary transparency laws is preposterously wide pay ranges, often covering more than a six-figure span.<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n
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For instance, the base pay range for a\u00a0database engineer<\/a>\u00a0at Apple in Cupertino, Calif, is listed between $130,000 and $242,000. At Tesla, a\u00a0business analyst<\/a> position in Palo Alto, Calif., offers $68,000 to $234,000 \u2014 a range of $166,000.<\/p>\n

Even more mind-blowing, the range for a software engineer at Netflix in Los Gatos, Calif., is typically $90,000 to $900,000, according to the\u00a0company\u2019s website<\/a>, a difference of $810,000.<\/p>\n

It\u2019s as if employers are winking at the law, or even making a joke of it. But at the very least, they aren\u2019t making it much easier for job seekers or current employees to peek beneath the compensation covers in a meaningful way.<\/p>\n

Read on Yahoo Finance<\/a><\/strong><\/p>\n

\u201cThe laws say you should post the ranges that you reasonably expect to pay,\u201d Julia Pollak, chief economist at ZipRecruiter, the employment search site, told Yahoo Finance. \u201cNot wild, crazy zero to a million dollars.\u201d<\/p>\n

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\"(Screenshot<\/div>\n<\/div>\n<\/div>\n
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(Screenshot of Netflix job posting)<\/figcaption><\/figure>\n

What companies \u2018would reasonably expect to pay\u2019<\/strong><\/h2>\n

In California and Washington state,\u00a0laws requiring employers to post salary ranges<\/a>\u00a0on all advertised job postings went into effect on Jan. 1. A similar one will follow later this year in New York state. 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.<\/p>\n

By the end of this year, roughly 1 in 4 workers will be covered by a state or local law that requires businesses to be transparent about their pay ranges, according to Payscale data.<\/p>\n

While it seems such wide ranges undermine the point of the laws, there\u2019s a method to the madness, according to experts.<\/p>\n

\u201cPart of the reason is that they need to specify the range that they would reasonably expect to pay,\u201d Pollak said. \u201cAnd there is just such wide wage variation within companies, not just across companies. It’s quite typical for many companies to hire people at a much lower rate because they are risk averse\u2026so companies often will hire people at a much lower starting rate than they expect to pay them even by the end of that year.\u201d<\/p>\n

Many employers are adding up everything they offer, not just providing a paycheck expectation, according to Emily M. Dickens, chief of staff and head of public affairs at\u00a0SHRM, The Society for Human Resource Management<\/a>.<\/p>\n

\u201cIt\u2019s compensation as a whole package \u2014 not just as the base salary \u2014 and you have to assign a value to those other benefits. That’s one of the flaws in this,\u201d Dickens told Yahoo Finance. \u201cYou’re competing with other organizations, and we’ve got a talent shortage as it is, so you’re going to want to put the highest salary range you could put in there so you can compete.\u201d<\/p>\n

Many of the previously mentioned posts also alluded to this.<\/p>\n

\u201cThis market range is based on total compensation (vs. only base salary),\u201d according to the Netflix posting. The Tesla posting put it this way: \u201cThe total compensation package for this position may also include other elements dependent on the position offered.\u201d<\/p>\n

There are cases where wide salary ranges really do provide valuable information, Pollak said.<\/p>\n

\u201cIn tech companies, compensation might average $300,000 for software engineers across the company, with junior hires earning $100,000,” she said, “and a small group of employees recruited for specialized skill sets or retained for building high-value products earning substantially more, in the $600,000 to $1 million range.\u201d<\/p>\n

Location also matters, especially with the increase in remote work opportunities. Cost of living varies city to city and region to region that employers must account for.<\/p>\n

\u201cRemote jobs are likely to be a gray area that will take some work to clarify,\u201d Kory Kantenga, a senior economist at LinkedIn, told Yahoo Finance. \u201cGiven that many employers index wages to local labor market conditions, it is possible \u2014 if not likely \u2014 that the salary ranges for remote jobs will be meaningfully larger than for onsite roles.\u201d<\/p>\n

Another factor underlying the gaping salary ranges: \u201cIt\u2019s going to take time for companies to develop pay philosophy and disciplined pay systems and procedures to meet the new laws,\u201d Pollak said.<\/p>\n

\u201cUntil now, what happened in many interviews is that recruiters would say things like, \u2018what were you hoping to make in this role?\u2019 And the candidate\u2019s chutzpah and confidence mattered more for the compensation level than the role or the budget.\u201d<\/p>\n

\u2018To some degree, this information\u2026is going to help\u2019<\/strong><\/h2>\n

For job seekers and those looking for promotions at their current employer, having a bead on what a position is likely to pay can be empowering.<\/p>\n

\u201cTo some degree, this information, even when the range is wide, is going to help job seekers,\u201d Pollak said. \u201cIt’ll help them to focus on jobs that actually provide the pay that they want, rather than going down a rabbit hole, writing out a whole application, then finding that the job pays much less than they need.\u201d<\/p>\n

Such large ranges may help some job candidates feel emboldened to ask for more money generally at the outset of the interview process. But don\u2019t overdo it, Jayne Mattson, a\u00a0career coach<\/a>, warned.<\/p>\n

\u201cThe salary ranges might be wide, but it doesn\u2019t mean you\u2019re worth the higher salary,\u201d Mattson told Yahoo Finance. \u201cEveryone needs to know and understand what their value is in the job market. Are your skills up to date? Have you solved problems the company is encountering? And are you clearly able to convey your worth in the interview?\u201d<\/p>\n

If that still comes up short and you get an offer on the lower end of the pay range, don\u2019t despair, said Maggie Mistal, an\u00a0executive career coach<\/a>.<\/p>\n

\u201cRather see it as a first step in negotiations. Most employers, in my experience, offer less than they can afford to pay because they expect you to negotiate,\u201d Mistal said. \u201cDon\u2019t take it as a done deal.\u201d<\/p>\n

In other words, go ahead and counter Netflix for at least a half-million dollars.<\/p>\n

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\"Yahoo<\/a>\"Kerry<\/a><\/div>\n<\/header>\n
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Kerry Hannon<\/a><\/span><\/p>\n

\u00b7<\/span>Senior Columnist<\/div>\n<\/div>\n
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Kerry is a Senior Reporter and Columnist at Yahoo Finance. Follow her on Twitter\u00a0<\/em>@kerryhannon<\/em><\/a>.<\/em><\/p>\n

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