The Rise of Salary Transparency

Negotiating a salary has become more straightforward with new legislation and as companies desire to improve pay equity through transparency.

Job candidates are not always clear how to approach salary discussions.

Some candidates will not entertain a new opportunity without understanding all aspects of compensation. Others may be tentative to discuss salary until they are further along in the interview process. Historically, organizations kept salaries confidential. Salary negotiations occurred with knowledge of a candidate’s current and expected compensation and at the end of the interview process. This practice was common for procurement & supply chain organizations who want to avoid making the first concession in a negotiation.

The worker-driven labor market gives potential applicants an advantage to negotiate better pay, increased flexibility, and improved benefits. As a result, organizations are allowing remote or hybrid work. They are offering comprehensive salary and benefits packages to attract talent and remain competitive. Guaranteed bonus and equity packages are much more common, especially in more progressive industries such as high tech.

Millennials and Gen Z workers expect pay transparency.

Comparatively to their Boomer and Gen X peers, Millennial and Gen Z workers approach salary discussions early on. They seek pay transparency before considering making a career change. Pay equity is critical as companies look to increase their diversity. According to a recent LinkedIn Survey about pay transparency , 81% of respondents in Gen Z (age 25 or younger) see salary candor as being good for pay equality.

Changes have come with the rise in pay transparency legislation.

In 2023, ten states and New York City will have adopted pay transparency laws. Accordingly, organizations will need to provide salary range data to job applicants upon request or publish salary ranges in job ads. As laws rapidly change and remote positions increase, organizations need to be consistent with their approach to disclosing salaries. Consequently, saving companies time as they pursue only candidates well-aligned with their prospective salaries. It also presents some challenges, as pay structures gain in complexity and are finalized after a comprehensive analysis of a candidate’s skills and experience. Candidates often assume they can negotiate a salary at the higher end of the range, when a company’s assessment may differ. This can lead to frustration that ends in a candidate declining an offer.

How can employers and candidates navigate these changes?

Employers can attract and retain talent by committing to pay transparency and reviewing and altering salaries to ensure pay equality. Procurement and supply chain candidates can help to align their salary expectations by completing a pragmatic self-assessment of their skills, experience, and monetary value to a company. A skilled procurement & supply chain recruiter can also assist with helping to coincide expectations. This approach decreases negotiations and ensures offer acceptance when the right candidate is identified. The candidate will feel well compensated, understood, and begin their new opportunity with ambition to succeed.