Update: The New York City Council has now voted to push back the implementation of the pay transparency law to November 1, 2022.
Beginning in May, employers hiring in New York City will be required to give a minimum and maximum salary range within every job posting. The legislation, enacted by the NY City Council, is meant to course-correct pay inequities within organizations by keeping salary information out in the open. Beyond New York City, the trend has already been moving steadily forward. In 2020, a Pay Transparency Study from Mercer found that 67% of organizations viewed the practice as increasingly important.
To inspire trust among an organization’s workforce, salary transparency is seen as a way to enable employees to call out unjust pay disparities. Opening the dialogue around pay structures, ranges and opportunities can lead to meaningful action on the gender wage gap.
For employee retention, embracing salary transparency can benefit HR leaders focused on promoting inner mobility within their organization. Those utilizing AI-based Talent Intelligence solutions, for example, can already identify and map an employee’s existing skill set against potential career paths. Layering salary information on top of potential future roles serves to enrich the picture for forward-thinking employees, strengthening their engagement with the organization in the process.
Admittedly, given the global nature of today’s workforce, with coworkers living states, time zones or even countries apart, pay transparency legislation has prompted some pointed questions. Namely, with so many companies adopting a hybrid or remote business model, how can organizations operating in states with a lower cost of living justify their lower wages and still remain competitive in the overall War for Talent? Growing pains like these will be inevitable as the salary transparency trend continues. And continue it will; similar laws have already been enacted in Colorado, Connecticut, and Maryland with experts predicting that more will follow.
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