Editor’s Note: Priscilla Koranteng is the chief people officer at Indeed, a job listing website. The opinions expressed in this commentary are her own. View more opinion on CNN.
In the United States, the demand for pay transparency is building. Laws that require employers of a certain size to include pay information in job listings took effect on January 1 in California and Washington state. Similar laws were already in place in other areas, including Colorado, New York City, Westchester County, New York, and Jersey City, New Jersey.
Still, it’s clear that many businesses don’t necessarily see pay transparency as a priority yet. As of December 4, less than half (45%) of Indeed job listings nationally have employer-provided pay information.
It shouldn’t come as a surprise that improved disclosure in the hiring process is good for job seekers. But it also benefits employers, which is why more companies should begin to implement pay transparency policies, even if they’re not required to do so by law.
According to Indeed data, job listings with pay information on our platform receive significantly more interest from job seekers — about 30% more applications are started per click. Pay transparency is an important consideration to help employers attract top talent, particularly notable in today’s tight labor market.
Embracing pay transparency can result in more equitable workplaces, too. For instance, when women in the US understand that when they are over the age of 15 and working full time, they make a median of 83 cents on the dollar compared with men, or when Black women are made aware that they are only earning 64 cents on the dollar compared with White, non-Hispanic men, they are in a position to demand equal pay for equal work. Pay transparency promotes much-needed social progress, propelling our society forward and helping more workplaces achieve pay equity.
This welcome progress also aligns with employers’ efforts to nurture more equitable work environments through diversity, equity and inclusion programs, which in turn drive innovation and attract strong candidates — especially younger workers who are demanding higher levels of social justice.
For organizations looking to meet their diversity, equity and inclusion goals, pay transparency is a simple step in the right direction. Plus, when an organization does this well, it doesn’t just attract great talent; it also retains the talent it has — which includes diverse employees.
A good way to measure engagement within an organization is gauging whether employees can say, “I recommend company ‘X’ as a great place to work.” Companies can then use this data to dig into any underlying or systemic issues among a specific demographic. Addressing pay inequity is just one example of an area an organization should account for to deliver on its diversity and inclusion goals.
It will take time for companies to perfect how to include pay transparency information in their job listings. In response to new pay transparency laws, some employers have posted overly large pay ranges that appear to mask a position’s true range — a $100,000 difference between the minimum and maximum ends in some cases.
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Employers that are more precise with pay ranges in their listings will provide job seekers with more useful and actionable information, and in turn will attract applicants who are a better fit.
In 2019, Indeed began to include pay information before being required to do so by law in certain markets. We saw significant benefits in attracting — and retaining — high-quality talent. As we continue to embrace and iterate on our own pay transparency efforts, we recognize it’s a journey that requires regular analysis, scrutiny and an open mind to continue to evolve. Several years later, we have no doubt pay transparency was an important step for our employees and company, and frankly, it was the right thing to do.
There is a growing body of evidence that pay transparency is a win-win-win for employees, employers and society. So, here’s hoping that more employers will enjoy success this year by making pay transparency a top priority.
