Using Pay Transparency to Your Benefit

Transparency surrounding employee salaries is quickly on its way to becoming the norm. Laws are on the books in several states, including California, and will go into effect in others, including New York, later this year, with more than a half dozen other states considering them now.

That clarity is being heralded as a critical weapon in the fight to narrow the gender pay gap. And it could be an effective way for people to not just negotiate starting salaries that are more equitable, but to maneuver for a raise as well.

The most important thing to keep in mind is that the salary listed on a job posting or in company documents isn’t a definition. It’s a starting point that can help you define what your value might be. Factor in things like your experience and the size of your company.

Look not only at what your company is offering for the position, but also at what competitors are paying. That puts you in a better negotiating position when you can point to definitive examples of notably higher salaries for the same job at different places.

At the same time, be sure to consider cost-of-living expenses. Comparing the salary for a position that’s located in the Midwest with one in the Northeast or in California is apples and oranges, given rent costs and day-to-day expenditures. Before you go in to negotiate your salary or raise, arm yourself with the differences in those expenses, just in case your manager should try to use a non-regional example to negotiate a lower amount.

As you go in for renegotiations on your compensation, keep in mind also other skills you bring that aren’t necessarily part of the job description, but are still useful. This could be anything from proficiency in certain programs or data analysis to speaking a second language. If these are particularly valuable in your job and for your company, it might be worth pushing for a number that’s higher than the salary range you’ve identified.

So how do you find out how much other people are making in the same job? There are a number of ways. Scanning job listings in states that have pay equity laws will give you a range. And some states will require the company to make that information available to whoever wants to look it over.

Another alternative is TikTok. Hannah Williams is a creator whose channel, called Salary Transparency Street, features interviews with people on the street asking how much money they make. The channel has over 1.2 million followers and has spoken with hundreds, likely thousands, of people who have been forthcoming.

In 2022, women earned an average of 82% of what men made, according to a March 2023 Pew Research Center analysis of median hourly earnings of both full- and part-time workers. That’s virtually no change from 2002. But the advent of salary transparency could reduce that gap, if underpaid workers are willing to do the homework and confidently confront their managers.

Even if you’re satisfied with your salary, it’s still a good idea to keep a close watch on the salary range being offered to new hires. A recent report from LaborIQ, which tracks compensation data, found that new hires receive, on average, 7% more than current employees in similar positions earn. Should you find yourself in a similar position, you’re absolutely entitled to demand more. Loyalty to an employer shouldn’t come at the cost of a lower salary.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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