‘Show Me The Money’: How Pay Transparency Can Help Create A Fair Workplace

When commercial real estate candidates look for their next career opportunity, they will weigh several factors including location, company culture and the day-to-day of the role. But one of their top priorities will likely be salary.

This is why salary transparency in both job postings and throughout a company is so key.

By disclosing salary details in a job posting, employers can help ensure that applicants are on the same page. Also, being upfront with current employees about salary decisions also helps create a culture of transparency in the workplace.

“Employees who understand why they earn their specific level of pay are much more likely to trust their employer, and that trust can go a long way toward boosting a company’s ability to recruit and retain top employees,” the Society of Human Resource Management stated in a Jan. 2024 article.

What Is Pay Transparency?

Pay transparency is the act of putting salary details out in the open, whether in the context of a job description or to employees internally about how companies determine compensation.

Being forthcoming about salaries helps promote equity and diminish pay differences based on gender and race.

SelectLeaders Associate Director of Recruiting Katie Hart said that when employees understand how pay is structured upfront, it helps mitigate concerns about pay inequality.

“Transparency establishes a shared system that feels fair and consistent, giving everyone a framework they can trust,” she said. “Employees are more engaged because they know the pay scale from the start and what it takes to advance within the organization. This also strengthens the interview process, as candidates can evaluate opportunities with clarity rather than negotiating in the dark.”

What Are State Laws Regarding Pay Transparency?

For some states and jurisdictions, disclosing salary and benefits is a “must-have” rather than a “nice to have”.

Pay transparency laws refer to the regulations regarding how employers share salary information. Paycor found that currently, 14 states plus Washington, D.C. have legislation around pay transparency, with Ohio having local laws in place. These states’ laws are based on one or more of the following criteria:

1. How many employees the company has
2. Who they’re required to inform about compensation and benefits (external applicants in job postings and/or employees)
3. If other disclosures need to be made, such as those around commission-based roles or upon promoting or transferring employees

Additionally, 22 states have laws dictating that employers can’t ask candidates how much they earned previously.

“Rather than basing offers on a candidate’s current or previous pay, employers should focus on what candidates are targeting in their next role, as for most, making a career move is tied to both professional growth and an increase in compensation,” Hart said. By asking candidates about their compensation goals early in the process, employers can create an open dialogue around pay structure and, in turn, be transparent about the budget for the role from the outset.

How Can Employers Navigate Pay Transparency?

Hire Candidates Who Value Transparency

A prominent reason that candidates say no to a company’s offer if the salary is too low and negotiations end up going nowhere. Presenting a salary upfront in the job post can help employers avoid the scenario of candidates backing out after multiple rounds of interviews and ensure that they’re not missing out on top talent.

Get Everyone Aligned

When employers take time to create and communicate pay structure to employees, they are fostering transparency. According to SHRM, employers should be working out salary details in advance of hiring to minimize pay disparities, as well as informing their internal teams about how the company’s roles are structured.

Avoid Large Pay Scales

While it may seem that providing a salary range is enough to comply with pay transparency, leaving too wide a gap within the range, such as offering a salary between $50K and $150K can cause candidates to either be dissatisfied by the posting or scratch their heads about where they land on that scale. It can cause candidates to not only start negotiations at the higher end of that scale, which can risk them turning down the offer, but also leave them with negative views of the company.

Employers can consult with executive recruiting firms like SelectLeaders to gain insight into how to disclose pay properly and comply with state laws. Click here to get started with posting a job and securing CRE top talent today.