- The desires of workers are always evolving and the future is ever-changing, but it looks like pay transparency is going to sustain its popularity with the working class.
- Maggie Hulce, Indeed executive vice president & GM of enterprise, told Allwork.Space that better matches happen faster when clearer pay expectations are set upfront between a job seeker and employer.
- Kyle Holm, VP of Total Rewards Advisory for Sequoia, believes that pay transparency is creating a positive shift in the current world of work.
The last few years have been tumultuous for the workplace, but it seems as though trends are headed in a positive direction. Workers have gained more of a right to remote work, better benefits, and are now demanding better pay transparency.
And their demands are being met: As of November 1 of last year, a law in New York City began requiring employers with four or more people on the payroll (where at least one of them works in the city) to provide a salary pay range in all job advertisements. This has led to other states following suit, to the satisfaction of workers.
Of course, the future is ever-changing and the desires of workers will always evolve, but it looks like pay transparency is going to sustain its popularity with the working class.
But, how do employers feel about this? How do they determine what a job is worth? Do both employers and employees want their salaries to be public knowledge?
We spoke to two workplace experts to better understand these questions, and more.
Indeed Executive Vice President & GM of Enterprise Maggie Hulce told Allwork.Space that better matches happen faster when clearer pay expectations are set upfront between a job seeker and employer.
“Pay transparency can also help close pay gaps that still exist across gender, race/ethnicity and other factors,” Hulce said. “New pay transparency laws are making a significant impact in driving more employers to include pay information in job postings. In New York City, where law recently went into effect, the share of job postings with employer-provided pay information has skyrocketed. This provides a strong indication for how new laws may affect pay transparency in areas going forward.”
According to Hulce, greater pay transparency isn’t being driven by laws alone.
“More employers are also starting to see it as a competitive edge to attract talent in a tight labor market. The momentum going into 2023 is encouraging that real change is ahead — not only in areas where laws are taking effect, but increasingly at the national level as well,” Hulce told Allwork.Space.
In a Q&A, Kyle Holm, VP of Total Rewards Advisory for Sequoia, explained that pay transparency is creating a positive shift in the current world of work.
Allwork.Space: How will compensation transparency be an important part of the future of work?
Kyle Holm: Pay transparency is really about the shift, or at least an attempt to continue to get more information into employee’s hands — and with more information, they’re going to make different decisions most likely. We’re going to get to skills-based compensation, and people are going to understand what skills are paid what, and that will have a dramatic effect — both in terms of how companies structure their organizations, but also in how employees think about themselves in terms of their value contributions.
Allwork.Space: If every job posting has the salary listed, will this make it easier or more difficult to recruit the right person?
Kyle Holm: It’ll make it easier if you’re honest about what the job is and you’re willing to pay for the skill. It’ll make it harder if you stick to the old way of doing things; I think there’s going to be a pretty big shift in that respect. The companies that try to hang on to the old ways of doing things and don’t adapt to a new world where employees have more information and essentially, some leverage that they never had, then it’s going to be hard.
But if you look at this as an opportunity to kind of get the right employee with the right skill set, then it could be potentially easier. I think it really is a question of how quickly are companies going to adapt to employees having more information and being able to make more informed decisions about where they’re going to work.
Allwork.Space: Will this impact salary inflation?
Kyle Holm: I hate to use the word inflation; if some jobs were undervalued, then the fact that that role, job, or skill is going to find its natural market equilibrium…is that inflation or is that just ‘we need to pay people what they’re worth?’ I don’t know that we’ll call it inflation, but I do think employees with more information will seek that sort of level of compensation that they’re finding their jobs are worth.
Allwork.Space: In the future of work, will both employers and employees honestly prefer to keep compensation private?
Kyle Holm: This is a painful moment for employers, especially those that have not been thoughtful about how they structure their organizations with their job architecture and their pay for performance philosophy.
Transparency hopefully will force people to make decisions based on what they can measure and what employees are contributing — not on these other factors that may not be intentional, but there’s no question that bias exists. We need to find a way to root it out and make sure that folks are paid for what they do and how they do it.