When it comes to hiring, one of the biggest challenges for small businesses is getting the right candidates through the door. Like many other business owners, you have probably felt one of these frustrations: job postings that attract few applicants, candidates with mismatched salary expectations, or even concerns about fairness and transparency.
At Paper Trails, we’re dedicated to helping small businesses like yours navigate payroll, HR, and management. One simple change can make a significant difference in your hiring process: including pay ranges in your job postings. In this article, we’ll explore the benefits of using pay ranges, how they can improve your recruitment efforts, and why this practice is becoming an essential part of hiring strategies.
What is salary transparency?
Salary transparency is the practice of openly sharing pay information, such as salary pay ranges, compensation details and benefits information, in job postings or during the hiring process. It’s a way for employers to demonstrate fairness, build trust with candidates, and promote equity within the workplace. Rather than leaving candidates guessing, salary transparency provides clarity about what a role is worth from the start.
Why salary transparency matters
For many job seekers, knowing the potential pay for a position is a huge factor in deciding whether to apply. According to LinkedIn users, compensation is the most important thing when applying for a job. Transparency sets clear expectations, reducing the likelihood of mismatched salary discussions later in the hiring process. In addition to its benefits for candidates, salary transparency fosters accountability for employers. By sharing pay ranges, businesses commit to equitable pay practices and can help reduce wage gaps for protected classes.
States that require pay transparency
Salary transparency is not just a best practice—it’s becoming a legal requirement in several states. These laws vary by location but generally require employers to disclose salary information either in job postings or upon request. Some of the most notable states with salary transparency requirements include California, New York, Connecticut and Massachusetts.
As of 2024, more states are considering implementing salary transparency laws. States like Maine, Oregon and Virginia are among those exploring legislation to ensure greater pay equity. Maine has introduced legislation for pay transparency laws, but nothing has been passed into law as of the end of 2024 .
The benefits of using pay ranges
Whether or not your state requires you to include information on salaries and benefits in your hiring practices, there are many benefits in doing so. Let’s break down the top reasons why incorporating pay ranges into your job postings can help in your hiring process.
1. Attract more applicants
One of the most compelling benefits of using pay ranges is the ability to attract a wider and more diverse pool of candidates. Job postings with salary ranges are more likely to receive applications from candidates than those postings without salary information. When candidates see a clear pay range, they’re more likely to feel that the process is fair and equitable. This inclusivity ensures that you’re not unintentionally discouraging qualified individuals from applying.
2. Save time and avoid mismatched expectations
Many times, hiring managers invest hours—or even days—interviewing a candidate, only to have them decline an offer because it didn’t meet their salary expectations. This is a frustrating and costly experience. Including pay ranges in your job postings helps eliminate this issue. Candidates can self-select based on whether the offered salary aligns with their needs, saving time and ensuring that the applicants you do engage are genuinely interested in the role.
3. Improve your employer brand
In today’s competitive job market, small businesses need every advantage to stand out. Listing pay ranges demonstrates transparency, which builds trust with candidates. Trust, in turn, enhances your employer brand and makes your business more appealing to top talent. When candidates feel that your hiring process is open and honest, they’re more likely to view your company as a place where they’ll be valued and treated fairly.
4. Support pay equity
Pay equity is a growing concern for businesses of all sizes. Salary transparency helps ensure that you’re offering fair compensation for the role, rather than basing pay on a candidate’s previous salary or negotiation skills. This is especially important for addressing systemic pay gaps that disproportionately affect women, people of color, and other underrepresented groups. By focusing on what the role is worth to your business, rather than an applicant’s salary history, you take a meaningful step toward creating a fairer workplace.
5. Increase employee retention
When current employees see that your business is transparent about pay, they’re more likely to feel valued and respected. Transparency fosters trust and can improve morale, improving your employee retention rates and reducing turnover. On the flip side, hidden pay practices can breed resentment and dissatisfaction among employees who feel they’re being underpaid compared to new hires.
Tips for including pay ranges
Now that we’ve covered the benefits of using pay ranges, you might wonder how to implement this practice effectively. Here are a few tips to get started:
1. Be realistic
Make sure your pay range reflects what your business can genuinely offer. A range that’s too broad can confuse candidates, while one that’s too narrow may limit flexibility during negotiations.
2. Highlight total compensation
Salary is just one part of the equation. Be sure to mention other employee benefits, such as bonuses, health insurance, retirement plans, and flexible work arrangements. This gives candidates a complete picture of the value you’re offering.
3. Focus on market value
Base your pay ranges on what the job is worth in your industry and location. This approach not only ensures fairness but also helps you remain competitive when attracting top talent.
4. Prepare for internal discussions
Listing pay ranges may prompt current employees to ask questions about their own compensation. Use this opportunity to review your pay practices and address any disparities.
Challenges to consider when posting pay ranges
While the benefits of using pay ranges are clear, it’s important to acknowledge potential challenges. These challenges can be addressed with thoughtful planning and a commitment to fairness.
1. Candidate expectations
Some applicants may expect to receive the top of the range, which could lead to disappointment if your offer falls short.
2. Wage inflation
Transparent pay practices could make it easier for competitors to outbid you for talent, especially in a tight labor market.
3. Internal Equity Concerns
Employees who see job postings with higher pay than their current salary may raise concerns, requiring careful communication and possibly pay adjustments.
Conclusion
The benefits of using pay ranges in job postings are clear. From attracting candidates to improving your employer brand and supporting pay equity, this simple practice can transform your hiring process and set your business apart.
At Paper Trails, we understand the challenges small businesses face when it comes to payroll, HR, and hiring. Our goal is to provide practical solutions that help you navigate these complexities with confidence. By including pay ranges in your job postings, you take an important step toward creating a fair, inclusive, and efficient hiring process. Feel free to contact our team if you need help with your payroll or HR practices, such as recruiting and hiring!