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Are You Prepared to Meet Salary Transparency Mandates and Candidate Expectations?
As the demand for fairness and transparency in the workplace continues to grow, more and more states are enacting salary transparency laws. What started as a gradual shift toward salary openness has now become a legal requirement in several places, including states with large cleared populations such as California, Colorado, and most recently, Maryland.
In fact, one in four workers is legally entitled to salary transparency due to where they live – a figure that will likely increase as more legislation is passed in additional locations. But even if your business isn’t directly affected by such laws, there are undeniable benefits to embracing pay transparency.
At the heart of pay transparency is a simple concept: honesty. Whether legally required or not, offering clear and open communication about salary ranges can enhance trust, improve recruitment efforts, and help your organization stay competitive in a rapidly evolving job market.
Let’s dive into why adopting pay transparency practices—whether mandated by law or by your own proactive policies—is not just a good move for compliance, but a strategic one for long-term recruitment success.
Maryland’s New Wage Range Transparency Law: A Growing Trend
As of October 1, 2024, Maryland has officially joined the ranks of states enforcing salary transparency with its Wage Range Transparency law. This legislation mandates that employers include specific pay-related information in all internal and external job postings. Whether you’re posting an opportunity on social media, sending out emails to applicants, or listing on job boards, you’ll need to disclose the pay range, along with a description of the benefits and any other compensation elements associated with the position.
Even though this law applies specifically to jobs physically performed in Maryland (at least in part), it represents a broader trend in employment standards nationwide. As more states begin to implement similar transparency regulations, it may be wise to consider adopting these practices voluntarily. Embracing salary transparency not only prepares your organization for future compliance challenges but also enhances your reputation with cleared job seekers.
Attracting Top Talent with Transparency
In today’s hyper-connected world, candidates have more access to salary information than ever before. With online tools and salary databases readily available, professionals understand their market value. By posting clear salary ranges, employers signal that they are aware of the competitive landscape and are willing to offer fair compensation.
When candidates have a clear understanding of the salary range associated with a position, they are more likely to apply. In fact, candidates are five times more likely to click on a job posting featuring a clear pay range according to Lighthouse Research & Advisory1. Transparency not only attracts high-quality candidates, but it also sets the tone for open and honest negotiations.
Building a Strong Employer Brand
Trust is the foundation of any employer-employee relationship, and salary transparency plays a significant role in establishing that trust from the very beginning. When cleared employers openly communicate salary information, it signals fairness and honesty to potential hires.
A trustworthy employer brand is a magnet for top talent. When candidates feel confident that the company values fairness in its compensation practices, they are more likely to choose that employer over competitors who remain tightlipped about pay. Transparency can also lead to positive word-of-mouth within the cleared community. As job seekers compare notes on employers, those with a reputation for transparency and fairness will rise to the top.
Streamlining the Recruitment Process
Cleared hiring can often be lengthy due to the security clearance process itself, but salary transparency can help streamline parts of the recruitment process that are in your control. By clearly stating salary expectations, cleared employers reduce the risk of candidates dropping out due to mismatched compensation.
When candidates enter negotiations already knowing the pay range, there’s less back-and-forth over compensation. This can save recruiters and hiring managers significant time, allowing them to focus on evaluating the candidate’s skills and fit for the role rather than salary. In turn, this speeds up the time to fill critical roles.
Enhancing Employee Retention
While salary transparency is often viewed as a recruitment tool, its benefits extend into employee retention as well. Once onboard, employees who understand how their compensation fits into the larger company pay structure are more likely to feel satisfied with their pay. This sense of fairness contributes to higher morale and lowers turnover rates.
According to Lighthouse Research & Advisory, companies rated highly on pay transparency are three times more likely to say employee retention has improved in the last year2. When employees know that their salary was set based on clear, equitable guidelines, it reduces the likelihood of dissatisfaction over pay disparities. Transparency fosters an environment where employees feel valued, which can reduce turnover and prevent the need to constantly refill critical roles.
Staying Ahead of Legal Compliance
As more states and localities implement pay transparency laws, staying compliant isn’t just a legal matter—it’s a competitive advantage. Across the U.S., laws like Maryland’s new Wage Range Transparency law are becoming increasingly common, requiring employers to disclose salary ranges, benefits, and other compensation details in job postings. But beyond the legal obligations, savvy employers are realizing that pay transparency has become an expectation for many job seekers, regardless of location.
According to Payscale’s 2024 Compensation Best Practices Report3, 60% of respondents now share pay ranges in job postings—a significant jump from 45% in 2023. What’s even more telling is that 39% of participants specifically said they disclose salary ranges in job postings whether or not they are legally required to do so.
These figures underscore the fact that transparency is no longer just about compliance—it’s about meeting candidates’ expectations and maintaining a competitive edge in recruitment. The trend toward transparency isn’t slowing down, and the sooner you embrace it, the better positioned your organization will be for the future.
Overcoming Hesitations Around Salary Transparency
Despite the benefits, some employers may hesitate to adopt full salary transparency. Concerns about losing negotiation leverage or revealing sensitive compensation information to competitors often come up. However, it’s important to recognize that salary transparency doesn’t have to mean a rigid pay structure. Many companies address this by posting wider pay ranges that allow for flexibility during negotiations while still providing candidates with a sense of what to expect.
Additionally, salary is just one part of the overall compensation package. Employers can highlight other benefits, such as healthcare, retirement plans, bonuses, and career development opportunities, to provide a more holistic view of the value they offer. So if you don’t have the most competitive salaries, really lean into your total compensation package and unique employee value proposition.
A Clear Path to Competitive Advantage
In an increasingly competitive talent market, cleared employers who embrace salary transparency can stand out from the crowd. By demonstrating a commitment to fairness, building trust with candidates, and aligning with evolving legal requirements, employers create a more attractive environment for top cleared talent.
Incorporating salary transparency into your hiring practices may seem like a significant shift, but its benefits far outweigh the risks. Whether you’re looking to build trust, reduce hiring time, or stay compliant with emerging laws, embracing transparency is key to setting your company apart in the cleared space.
