Pay Transparency Statistics You Should Know in 2023

4 min read
May 4, 2023 6:30:00 AM

Pay transparency is gaining steam as organizations look to comply with new regulations and create better employee experiences. But many organizations are still struggling to get buy-in, create a strategic pay transparency policy, and execute it smoothly.

These statistics will shed some light on the state of pay transparency to help you navigate this advantageous, yet complex, compensation trend.

Job seekers are 68% more likely to apply for a position if the salary range is listed

The US talent market is extremely competitive, with two jobs for every unemployed person right now. Being transparent about pay during the recruitment process can help you attract and engage more candidates for your roles so you can overcome the skilled talent shortage.

Nearly all job seekers (98%) want to know a position’s salary before applying, with 77% saying salary is a top consideration during their job search. That explains why 85% of job seekers are more likely to apply for a job that lists a salary range. Even a low pay range appears to be better than no pay information at all; 56% said they were still likely to apply for a job with a disappointing pay range if the role was otherwise a good fit. 

The results speak for themselves: 16% of organizations that already disclose pay rates are seeing an increased number of candidate applications. 

91% of employees who understand how pay decisions are made trust that team members are paid fairly

Employee trust impacts everything from morale and motivation to productivity and profitability. Pay transparency can help your organization build that trust with your team members. 

Most employees (91%) who understand how pay decisions are made trust that team members earn equal pay for equal work regardless of gender, race, and ethnicity. Conversely, only 49% of those who believe their organization lacks transparency when it comes to pay decisions trust that employees are being paid equally for equal work. 

81% of workers are more productive and loyal to their employers when they’re paid fairly

We’re experiencing a period of rapid wage growth and your team members can easily see what they could earn elsewhere. Compensation remains a top driver of employee turnover, but this can be as much about a lack of transparency as it is about the pay itself.

Employees who believe their pay is inequitable are 15% less likely to stay with their employer than employees who perceive their pay as equitable. But 81% of workers say they’re more productive and loyal to their employers when they’re paid fairly. 

Increasing pay transparency can help your team members understand why they earn what they do, and how they can earn more. This can help boost retention, as 63% of employees prefer to work at a company that discloses pay information over one that does not.

Increased transparency has shown a 20% decline on the gender pay gap

Women in the United States earn 84 cents for every dollar earned by men. Black men and Latinos earn 75 cents for every dollar earned by white men, and LGBTQIA+ workers earn 90 cents for every dollar earned by non-LGBTQIA+ workers.

Pay transparency holds employers accountable for fair pay practices and promotes less secrecy around compensation, which can help improve pay equity. In fact, increased wage transparency has led to a 20% decline in the gender pay gap for US academics.

20% of workers are covered by pay transparency laws

Increased pay transparency has proven to be a worthwhile strategy to close wage gaps, encouraging pay equity legislation to address pay disclosures. Currently, 7 states and 6 localities in the US have pay transparency laws requiring employers to share pay information with prospective and current employees. New York state will join this list in September 2023.

It’s estimated that 20% of all U.S. workers are covered by pay transparency laws. Some legislation requires employers to provide a pay range upon request to a current or prospective employee. Other laws mandate that pay be disclosed at a specific point in the recruitment process — including listing a salary range in applicable job postings.

17% of North American employers disclose pay to candidates — even when not required to do so by law

Pay transparency has many worthwhile benefits, including pay equity, talent attraction, and employee retention. It’s no surprise that 17% of North American employers disclose pay and salary ranges to prospective employees, even when not required to do so by law. Another 62% are considering doing so in the future.

Companies have made more progress toward transparency with existing employees — but still have a ways to go. While 94% of HR professionals think it is important for organizations to be transparent with employees about how pay decisions are made, only 47% do so.

Larger companies are 33% more likely than their smaller counterparts to provide pay transparency.

60% of organizations want to share pay ranges with employees, but only 36% do

The majority of organizations (46%) simply tell their employees when and what to expect on their paycheck, while another 19% also share some market data with team members. Only 36% currently share pay ranges with employees as a minimum level of transparency.

But 60% of organizations want to offer more transparency. Nearly a quarter (24%) would like to share some market data with employees and another 25% would like to take this a step further to share the company’s compensation plan with employees. One in 10 strive to make ranges and employee pay information available to all employees.

Final thoughts: Embracing pay transparency can be your competitive advantage

Organizations that disclose pay information are seeing more questions from employees (38%) and candidates (27%) around compensation, but only 46% train their managers on how to handle these conversations. A lack of planning and clear communication can lead to confused or disgruntled employees, decreased engagement, and higher turnover. That’s perhaps why 31% of companies say they’re not ready for transparency: many cite administrative complexity and possible employee reactions as reasons for holding back.

Wage transparency has the potential to work against your organization if current and potential employees don’t like what they see — but it also has enormous upside when implemented correctly. The right compensation management software can enable your managers and HR team to equitably manage compensation and communicate about pay so transparency can be your competitive advantage.

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