When Jenna V., a Virginia-based attorney for a large New York-based insurer, got a look at the salary range for her counterparts in the Big Apple, she was dismayed. A long-time employee of the company, she was disappointed to see that her salary was far below her peers in New York City. She consoled herself with the realization that her cost of living was lower in Virginia, somewhat making up for the disparity.
Jenna’s disappointment in learning how much less she makes than some of her peers is going to become increasingly common as pay transparency laws roll out across the country. From states like Colorado and California, to cities like New York, Ithaca, and others, insurers now often need to post salary ranges with job listings.
"While company recruiters don’t need to walk on eggshells, employers’ approach to the new salary laws requires a light touch," says Beth Florin, CEO of Pearl Meyer, a firm that consults on senior management and executive compensation. “You need to talk about your philosophy on pay structure and define the story around it,” she says. “There are going to be bumps in the road figuring it out, but transparency needs to be more than showing a number.”
When it comes to pay transparency and job applicants, the outcome is positive, in most cases. “We’ve seen some evidence from the Colorado law that you do attract more applicants and also that many will self-select,” Florin explains. “If they’re already making a higher salary than what you post, for instance, they won’t bother applying."
This saves everyone the time and money invested in the interview process, which otherwise can end with a big mismatch. “Who wouldn’t like more intel about a job when searching?” Florin points out. “But sometimes transparency can be confusing if not spelled out correctly.”
While pay transparency laws are still relatively new, expect to see more. “Over time we’re going to see a broadening of these laws and hopefully, a coalescing around how to manage them,” says Florin. “The industry will determine where and when to disclose, for instance, and how to share the information with current staff, as well.”