Senior Client Partner
Pay Ranges in Postings: A Range of Troubles
The company needed a communications manager but weren’t sure if they were looking for a mid-career supervisor or someone closer to the executive ranks. So they decided to cast a wide net and posted the role on various job sites, indicating a salary range of $80,000 to $250,000.
The criticism came within minutes of the job post going online—from an unexpected source. The firm’s existing communications employees assailed their boss, wanting to know why none of them were even making $80,000.
At company after company, it’s turning out that being open about pay is opening a can of worms. Multiple states are now enacting laws making it mandatory to disclose salary ranges in job postings, with several more states putting similar laws into effect in 2024 and 2025. In theory, leaders recognize that fairness and transparency can help them attract and retain talent. But in practice, the idea of disclosing pay ranges has caused anxiety across a wide range of organizations. Indeed, even as firms post salary ranges on their job postings, many aren’t doing much else. According to a new survey from Korn Ferry, only 17% of firms have implemented a strategy of pay transparency, while 37% are waiting either for more laws on the subject or for a best practice to emerge.
The lack of action has made for some uncomfortable conversations between managers and their direct reports, and more than 40% of firms believe the disclosure rules and other pay-transparency efforts will increase employee turnover. “Right now this is all well-meaning, but not ideally executed,” says Dan Kaplan, a Korn Ferry senior client partner in the firm’s Chief Human Resources Officer practice.
It's the internal conversations—or lack thereof—that are causing particularly pressing issues, experts say. About 80% of organizations say a majority of employees do not understand the prevailing compensation philosophy, according to a WorldatWork survey on compensation practices. That includes managers, who are often besieged by questions from their employees when they see ranges on listed jobs that don’t look like what they’re being paid. Many firms didn’t anticipate this, says Tom McMullen, leader in Korn Ferry’s North America Total Rewards expertise group. “Firms have to be aware that they need to be answering questions about their methods,” he says.
To be sure, some of the positive effects have started to come through, says David Ellis, vice president of Korn Ferry’s Global Talent Acquisition Transformation business. The disclosed salary ranges are already making some job-seekers skip past roles where the range is lower than what they would realistically accept. That is saving the candidate and the company from wasting time on fruitless salary negotiating. “It has the potential to simplify recruitment,” Ellis says.
Still, experts say many firms need to work on pay-transparency issues, structurally changing not only who gets paid what, but also how pay practices are communicated internally. More states and municipalities are likely to adopt salary-disclosure laws, McMullen says. Even if they don’t, he says, organizations likely will find it cumbersome to maintain multiple sets of pay-range rules. Already a handful of large-sized firms have indicated they’ll disclose pay ranges regardless of where in the US the job is posted. “This train is rolling down the track,” McMullen says.
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