Pay Transparency: Will It Change Salary Negotiations?

"What are your salary requirements?" It's usually asked in the screening interview and is typically a required field on the application. Many job seekers think salary will come up at the later stages of the process, but it is critical to handle these initial inquiries appropriately to both move forward in the process and maximize your salary negotiations.

Addressing Pay Inequality

Notice the word "requirements", not salary history or current salary. Over the past several years, many states and cities have enacted legislation that prohibits employers from asking applicants their salary history. This was a long time coming and has helped to address pay inequality. Recently, a new trend in equal pay is emerging. Applicants in some states and cities can now find out the pay ranges of open positions.

I hear from clients all the time, "I just wish I knew how much a position was paying to determine if I even want to apply." Of course they do! Analyzing a posting, customizing a resume and cover letter, and completing the online application are all very time consuming.

Colorado Leading The Way

Well, if you're applying to a job in Colorado, you will be provided with the pay range right in the posting! New York is considering similar legislation. A quick review of postings on Indeed.com in Colorado confirmed this for me. There it is! Salary ranges for everyone to see to determine if a job might be worth pursuing. Since companies with remote positions are also required to disclose salary ranges, it's also useful for salary research for non-Colorado positions, too! Unfortunately, some companies are trying to get around this requirement. There are over 190 companies with job postings that state "This position can be preformed anywhere but Colorado." If you're interested, a regularly updated list of these companies can be found at www.coloradoexcluded.com.

Similar Laws in Other States

Other states are moving in the right direction, but require the applicant to request the range, have at least one interview or be offered the position. Here's what I found:

State or City/State	Information	When
California	Pay Scale	Can request after initial interview
Connecticut	Wage Range	Can request after applying
Nevada	Wage or Salary Range	Provided automatically after initial interview
Rhode Island	Wage Range	Can request after applying
Washington	Minimum Wage of Position	Can request if offered the position
Cincinnati, OH	Pay Scale	Can request if offered the position
Toledo, OH	Pay Scale	Can request if offered the position

It's reasonable to assume that more states and municipalities will follow suit in the coming months and years, so let's look at what this could this could mean for your salary negotiation strategy.

Do Your Homework

Sure, you may know what the salary range is for a specific opening, but do you know how that compares to the market? I always like to speak of salary research with my clients in terms of data points. Companies use multiple data points, like salary surveys, to construct their salary bands for each position, Similarly, you need multiple data points to figure out how to answer the salary requirements question. The more data points you have the better you can construct a fair market range. Often times, job seekers rely on one data point - their own salary. Be sure to do your research. Glassdoor.com, Salary.com and Payscale.com are good places to start. Oh, and check out those salaries in Colorado, too!

Range vs. Number

In the above table, you'll note that other than Washington, each state or municipality will provide a salary range, not a number. This allows the company flexibility to adjust the salary to the candidate's skills and experience. Similarly, you should always try to present your salary requirements in terms of a range to provide yourself flexibility to negotiate a higher salary. If you tell the recruiter your salary requirement is $50,000 and the offer comes in at $50,000, it will be more difficult to negotiate a higher salary. Applicant tracking systems often only provide space for a number, not a range. This is where working with a career coach can be helpful. They can help you analyze your salary research to come up with a suitable range and number, as well as crafting the messaging.

Should You Ask for the Range?

Again, referencing the table above, you'll see that candidates can request or will be told the salary range at different stages in the process. It will be interesting to see where other states will land on this issue. Each state or municipality's statute did stipulate that employers could not retaliate against an applicant that requests the wage range in accordance with the law. So, even if you can request the range, should you?

If you are being offered the position, you should definitely request the range. The employer has already determined you are their top candidate and now they want to try to 'close the deal'.

If you are in a state that will disclose the salary range upon applying or after interviewing, my recommendation is to hold off asking, and here's why. Applicants have always been able to ask about salary, what's changing is now employers have to disclose. I have always discourage clients from asking about salary at the initial stages because 1) you want to show you are interested in more than just the salary. You want to convey you are looking for the right fit and a long-term commitment, and 2) you have the most leverage once the company has made the decision you are the one they want to hire.

Final Thoughts

It's great to see legislation to address pay inequality. Pay transparency is just one step. Even with this new legislation, I feel very little is changing in terms of salary negotiation best practices. You still need to do your research, you should always let the employer bring up salary first, you should always speak in terms of ranges and you should always try to negotiate. In this tight labor market, I'm sure with even posted ranges, if a company really wants someone, they will go above the range.