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1、The new playbook forsalary negotiation in the age of pay transparency Learn what candidates expect in the process of salary negotiation when pay ranges are published in job ads,and what you as an employer need to do to attract and retain talent.For employersTable of contents3-45961071181213Introduct
2、ionThe game has changedShift to a culture of pay equityExpect to negotiateDetermine the right pay for the jobKnow when to walk awayPut the pay range in the job adPlan for career progressionExplain the offerConclusionPay transparency is the futureAdditional resources Salary profiles with Payscale Rel
3、ated content23IntroductionThe game has changedSalary negotiation has changed.It used to be that job candidates would apply for a job with little idea of what it paid.It was understood to be poor form to ask about salary until the end of the interview process after value had been established and both
4、 parties were invested in moving forward.When an offer was made,confident applicants would ask for more and employers would reward them for their pluck.However,processes for salary negotiation that rely on“confidence”disproportionally favor white men from affluent backgrounds.Women,people of color,p
5、eople with disabilities,and others with a minority status are less likely to negotiate because they fear backlash and numerous studies have corroborated the legitimacy of that fear.To address pay discrimination,salary history bans have been implemented in 17 states,forbidding employers from asking j
6、ob candidates the question,“What is your current salary?”during the interview process.The intent of this legislation is to level the playing field for applicants of all backgrounds by ensuring that salary offers are tied to the position in question and not what someone is making perhaps unfairly in
7、the position they are trying to leave.This is particularly important for helping people who are more likely to be underpaid due to unconscious bias.In addition,most states have also enacted pay equity laws in one form or another that extend the intention of the 1963 Equal Pay Act to pay women and me
8、n equally for the same work.However,pay equity laws and salary history bans have not been enough to close pay gaps.4Pay transparency legislation is having a bigger impact.In the past,salary data was secret.Processes for determining pay were opaque.Today,thanks to the internet and social media,salary
9、 data is ubiquitous.Employees are becoming increasingly open about sharing salary data both in person and online since younger generations now have much higher expectations for pay transparency than older generations.Pay transparency has also been shown to close pay gaps,in part because it forces or
10、ganizations to have a fair and consistent approach to how they pay.As a result,pay transparency legislation is now on the rise.At the time of this writing,ten states and New York City have adopted pay transparency laws to go in effect by 2023,which will require organizations to provide salary range
11、data to job applicants upon request,or to publish salary ranges in job ads so that candidates know what they can make in the position before they even apply.At the same time,thanks to remote work,more and more organizations are looking to broaden their talent markets,which means having to be in comp
12、liance with pay transparency laws for every job posted.The requirement of sharing pay ranges with candidates in advance of an offer will upend the old salary negotiation process.The new process will emphasize fairness and place pay philosophy and company values at the center of the discussion.Organi
13、zations will need to shift from a culture of pay secrecy to a culture of pay equity,establish formal processes for determining salaries,consistently publish pay ranges in job advertisements,train recruiters and hiring managers on how to explain salary offers in detail,and set expectations for employ
14、ee growth opportunities.Its going to be a lot of work especially for organizations set in traditional processes but those that make the effort will be ahead of the curve and the most attractive options in the modern workforce.WashingtonNevadaColoradoMontanaIdahoOregonUtahArizonaHawaiiAlaskaNew Mexic
15、oTexasOklahomaKansasSouth DakotaMinnesotaWisconsinMichiganNorth DakotaIowaMissouriArkansasLousianaMississippiAlabamaTennesseeKentuckyIllinoisIndianaOhioPennsylvaniaNew YorkNew JerseyR.I.ConnecticutMassachusettsNHVTMaineDelawareMarylandVirginiaNorth CarolinaSouth CarolinaWest VirginiaGeorgiaFloridaWy
16、omingCaliforniaStates with pay transparency laws in 2022Shift to a culture of pay equity Know what fair pay means and why it matters to your organization.When organizations get to choose,pay transparency is usually preceded by pay equity to make sure that internal employees arent dismayed by what ne
17、w hires are being offered,which can lead to a lack of engagement,turnover,or even lawsuits.However,with pay transparency legislation,organizations are being forced to publish pay ranges in job ads.This is driving increased interest in pay equity,but many organizations have a lot of work to do before
18、 they can get there.Organizations do not need to have perfect pay equity to comply with pay transparency laws,but it creates risk to publish pay ranges without perceived pay fairness.In the short term,some organizations are broadening ranges,picking and choosing which jobs to advertise,or including
19、only pay minimums where legally acceptable.However,it should be obvious that internal pay equity would be immensely beneficial.For this reason,employers should be undertaking a long-term strategy to embed continuous pay equity into the culture of the organization.Achieving actual pay equity is a com
20、plex,multi-step endeavor requiring investment in formal pay structures,compensation strategy,and pay analysis on a regular basis.But the first step begins with the objective.Why is pay equity important to your organization?What is the risk of employees discovering what other employees are making?If
21、pay discrepancies between individuals are earned,how are you communicating what factors constitute higher pay?Do you expect employees to ask for raises when these factors are met,or do you address pay progression proactively and pay equity continuously?Being able to answer these questions and commun
22、icate the answers up,down,and throughout the organization is foundational in developing both your pay strategy and your approach to salary negotiation in the new world of pay transparency.56Employee-sourced dataTriangulate data sourcesto help create confidencein reliable dataHR market analysis dataP
23、eer dataAnalysis and alignmentto comp strategyStrategicpay rangeDetermine the right pay for the job Use multiple sources of salary data and know how employees move up the range.Although starting with a pay strategy centered around pay equity is the ideal,most organizations have too many pressing hir
24、ing needs to wait for that effort to be completed.Often,the real first step is determining the right pay for the jobs you need to fill right now.This isnt always easy,either.The process begins with gathering market data,but not all organizations go about this in the same way.SHRM recommends referenc
25、ing multiple salary data sources,usually three at minimum,in order to triangulate fair pay from a few different lenses.Payscale compensation software offers three types of proprietary salary data employee-sourced data,HR market analysis data,and peer data which can be combined with third-party tradi
26、tional survey data and integrated within the same Payscale compensation management platform,such as MarketPay or Payfactors.Employers use salary data to benchmark jobs and determine appropriate pay ranges according to their compensation strategy.To get pay right,employers must first have a firm unde
27、rstanding of the job as well as how it fits into the broader structure of the organization and how competitive pay needs to be to fill that position.Additionally,it is important to think about how employees are slotted in the pay range according to compensable factors such as experience,proficiency,
28、and performance.Your approach to this should be consistent for all hires and should be a critical component of the interview and salary negotiation process.For organizations still working on their compensation strategy,job management,and market pricing,Payscale offers numerous resources in the form
29、of research and insights as well as industry-leading compensation management software,services,and data.Put the pay range in the job ad Job seekers dont trust companies without pay transparency.There are pros and cons to publishing pay ranges where all employees can see them.When done correctly,pay
30、transparency can boost trust in HR,reinforce company values,streamline the hiring process,and raise morale in the workforce.But it can also lead to jealousy,hostility,and turnover,especially if pay practices are viewed as unfair or pay communications are poor.However,with pay transparency becoming l
31、aw in some states and sure to spread to others,organizations really dont have the option to reject pay transparency for much longer.There is no doubt that candidates prefer jobs to have published pay ranges.In fact,research shows that job seekers do not trust companies that dont publish pay ranges.J
32、ob seekers prefer not to waste time interviewing for positions that arent a step up for them in compensation,especially as the application and interviewing process has become longer,more complicated,and more frustrating over time.Employers that publish pay ranges communicate to job seekers that they
33、 have their act together when it comes to showing they value employees.From the candidates perspective,why bother to even interview with a company that cant demonstrate this?This perspective will grow as pay transparency becomes more common.Still,if you are not going to publish pay ranges in job ads
34、,you should at least be ready to provide the pay range at some point during the interview process.Recruiters should also be trained to explain how candidates are slotted along the pay range.For example,do you aim to bring less experienced candidates in below the median?Do you target the middle of th
35、e range for more experienced candidates?What is the likelihood that a candidate would be offered a salary above the median?These are questions that job candidates will want to know the answers to so that they can frame their skills and experience in the best way during the interview process to get t
36、he best offer.7JOB OPENINGSDEVELOPERRequired skillsPay rangeIT ANALYSTRequired skillsPay range8Explain the offer Make sure candidates get the full picture.Lets assume you have a candidate who has made it all the way through the interview process.You are mutually excited.Its time to make an offer.Whe
37、n you make an offer,it is critical that you explain the details of how you arrived at it.Ideally,you will have already explained your compensation philosophy as an organization and what salary data you used to determine the pay range.You might even encourage the candidate to make a salary profile wi
38、th Payscale as third-party validation that the offer you are presenting is fair.The candidate should know the pay range already,so include it when you make the offer.Train recruiters and hiring managers to explain where the candidate falls in the range,the methodology you used to determine that plac
39、ement according to the pay policies discussed above,and the growth opportunity that your candidate has with the organization both within that range and for future promotions.A total rewards statement can be useful in this conversation.Recruiters should be trained to discuss these statements as part
40、of the offer process,including the monetary value of benefits as well as which benefits are unusual and differentiating for your organization.Include additional materials such as a benefits brochure to help your candidate carefully evaluate the offer and give them time to consider the total package
41、so they can make an informed decision.If youve done your job right,your candidate will be excited,and an acceptance will be on the horizon.9Expect to negotiate Its normal for job seekers to want more.Just because both parties have knowledge of the pay range doesnt mean that there isnt going to be an
42、y negotiation.Pay ranges give candidates an idea of what the job is worth,which will make them excited to apply and stick with the interview process in hopes of getting an offer.Once an offer is made,however,the candidate may express disappointment with where they fell on the range or make a case fo
43、r why they should be given a bit of a bump up the range.This should be accepted as normal.Of course,they may not get what they ask for.The justification for increasing the offer must be grounded in compensable factors and be defensible for how pay is determined across the organization.But your candi
44、date may have this justification.They might make the case that their years of experience,proficiency,or special skills warrant an increase of a certain percent.In this scenario,you will have to look at the data to determine if a request for an increase can be met.If pay cannot be increased to meet t
45、he candidates wishes,there may be other aspects of the total rewards package that are flexible to sweeten the deal.You can consider an increase in variable pay,a signing bonus,or upgrades to benefits and perks that are attractive to the candidate and in your power to award.Ultimately,you want your n
46、ew employee to feel good about the offer they accept and excited to lock in that start date.Its also a good time to emphasize your company values and your commitment to pay equity.Although job seekers will want the most they can get,you can persuade them that sticking to a policy of pay fairness for
47、 everyone is in their best interest.Know when to walk away Prioritize candidates who reflect your values and culture.By this point,your candidate should know the pay range before receiving an offer and be anticipating roughly where they will fall on the range if both parties have done their homework
48、.This means you are less likely to experience the crushing disappointment that sometimes happens when the candidates salary expectations cant be met by an employer who really wants to hire them.However,you might still occasionally run into this situation.The candidate might expect to be at the top o
49、f the range when there isnt justification to do so,and when bringing them in that high with no room for growth wouldnt be a good experience for them as an employee.You might also disagree on premiums expected for skills or location,or other compensable factors the candidate may expect but which aren
50、t part of your compensation strategy.Total rewards could also fall below the expectations or needs of the candidate.It is also a common situation for a candidate to be involved in multiple interview loops with different organizations and receive multiple offers.If another organizations total compens
51、ation package is more appealing but the candidate prefers the position with you,they may try to use the other offer as leverage to increase their starting salary.If you can meet a competitive offer for a great candidate without putting yourself in a dicey situation,go for it.But this isnt always pos
52、sible.When you cant meet the demands of the employee,the best option might be to let them walk.This is especially true if the candidate indicates that they dont value your commitment to pay equity or dont respect your pay practices.A hyper-focus on obtaining the highest paycheck possible could be ev
53、idence that the individual is not going to be a long-term fit for your organization.1011Plan for career progressionShare pay increase processes and promotion opportunities.Lets assume that all goes the way you hope.Your candidate accepts the offer.Congratulations;you have a new employee!This is a ti
54、me to celebrate.The recruiter is excited.The hiring manager is excited.The team is excited.Your new employee is excited.Theres paperwork and onboarding processes to get through,but this is a wonderful moment for everyone who has worked so hard throughout this process.However,the work doesnt end here
55、.It is important to think about the whole employee lifecycle.Your new employee is going to want to prove themselves as a new team member and will hopefully be given clear objectives for their first 30,60,and 90 days of employment.Before you know it,though,they will pass their first pay increase cycl
56、e.This is a good time to remind the employee of where they fall on the pay range and how pay increases,variable pay,and recognition and rewards are earned within your organization.Employee lifecycleCommunicating the process for pay increases is especially important as not all organizations manage it
57、 in the same way,so your new employee may have misaligned expectations.It is especially important for new college graduates and younger employees who are looking to learn and grow fast,especially if they are brought into the organization lower on the pay range.These employees may be entitled to larg
58、er pay increases at more frequent intervals and may be anxious if they dont understand the process for getting those pay bumps.It is also good to talk through promotion opportunities for more proficient employees or those brought in higher on the pay range,especially if the possibility of rapid prom
59、otion was discussed during the interview process.12Conclusion Pay transparency is the future.Pay transparency is going to gather steam and its going to impact the hiring process,especially when it comes to salary negotiation.Although this can be anxiety-inducing for employers,pay transparency will u
60、ltimately be good for both organizations and employees.Pay transparency enforces pay equity.This is a wonderful development that will hopefully,finally,close the controlled gender pay gap and mitigate other forms of pay discrimination.In addition,pay transparency can help employees put a higher valu
61、e on pay fairness,which can result in happier hires who are willing to invest in the organization over the longer term.Pay transparency and pay fairness can also have other powerful impacts.With the stress and competition of“negotiating the highest salary”removed from the process of finding a job,em
62、ployees can have more confidence in their role and more clarity in how to grow with the organization.With a more streamlined hiring process and increased retention,employers can likewise focus more on creating rewarding employee experiences.Organizations that make the shift to pay transparency soone
63、r will reap rewards faster.Candidates overwhelmingly want pay ranges published in job ads and are more likely to apply for jobs where the rewards are clearly posted.They are also likely to respond positively to organizations that can explain their pay strategy and publicize their commitment to pay f
64、airness.Its true that pay transparency is changing salary negotiation.For organizations that are preparing to ride the wave to the future,though,its changing for the better.13Pay Transparency Legislation Tracker How Pay Transparency Closes the Gender Pay Gap Compensation Best Practices Report The Im
65、pact of Fair Pay Perception on Employee Retention ResourcesPayscale offers compensation management software,solutions,salary data,and services to organizations looking to improve their pay practices,achieve pay equity,and adopt pay transparency.Learn more about Payscale products like compensation so
66、ftware and data to support your journey pay transparency Learn more about Payscale solutions that can help up-level your pay transparency strategy Learn more about Payscale services like data implementation and custom reporting Related contentRead nowDownload reportDownload reportStart salary survey
67、Download reportSalary profiles with Payscale It can be beneficial to encourage employees and job candidates to start a salary profile with Payscale.This experience provides individuals with a third-party reference for pay ranges that can help bolster your pay strategy by providing a complementary da
68、ta point.14About PayscaleAs the industry leader in compensation management,Payscale is on a mission to help job seekers,employees,and businesses get pay right and make sustainable fair pay a reality.Empowering more than 50%of the Fortune 500 in 198 countries,Payscale provides a combination of diverse and dynamic data sources,experienced compensation services,and scalable software to enable organizations such as Angel City Football Club,Perry Ellis International,United Healthcare,Vista,and The Washington Post and to make fair and appropriate pay decisions.Pay is powerfulTo learn more,visit