Indeed Will No Longer Exempt Large Employers From Salary Transparency Policy

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Aug 23, 2022

If you’ve been posting jobs on Indeed, you might have noticed a change: Starting on July 18, according to a press release from Indeed, almost every position on the U.S. Indeed site now has a salary — either entered by the recruiter or estimated by Indeed’s algorithm (as long as Indeed has enough data to provide a salary estimate). 

Previously, large companies could opt out of Indeed estimating a salary for each position. But with Indeed’s new change, being too big to share a salary is no longer an option. 

Many Companies Still Do Not Voluntarily Share Salary Ranges

While job hunters appreciate salary ranges, some companies are adamant about not sharing salaries.

For example, Colorado State and New York City require job postings to contain salary ranges. When the Equal Pay for Equal Work Act went into effect in 2021, some companies, including big named Nike, simply excluded people who lived in Colorado. 

While Nike has since backed down, listing salaries in their remote job postings, other employers have picked up the opposition. 

Cengage Group, a technology company, includes the following language in their job postings: “If you are a Colorado state or New York City resident, please email” So technically, residents in these jurisdictions can receive the required salary without the company publicly releasing the data. (Cengage did not respond to an email request for comment.)

Meanwhile, a recruiter who works with international executives didn’t want to comment under his own name because he has clients who do not want to share salary information. 

Furthermore, a bill in California requiring companies with 250 or more employees to post current employee salaries online had that provision removed after businesses opposed it. The California Chamber of Commerce claimed that “publicly sharing payroll data would lead to lawsuits.

It’s illegal in all 50 states to pay people based on race, gender, or other protected characteristics, so one is left to wonder what type of lawsuits the California Chamber of Commerce expected. It’s not illegal to pay people differently for different jobs or levels of experience. 

Several other states are considering bills to make salary disclosure on job postings mandatory so that this Indeed solution may be temporary for many job seekers, who will see more companies posting actual ranges anyway as more states require it.

The Effect of This Change on Recruiting

Katrina Collier, the author of The Robot-Proof Recruiter, said that Indeed’s change was “brilliant” and added, “of course, it’s a pain in the ass for HR because they’ve got employees who are underpaid, and then they might have to raise their salaries.”

This, of course, is a big concern for companies. As inflation has soared and unemployment rates have remained low, employers have increased salaries at a record rate of 4.8%. Even with that record increase, job switches come with better gains: In March, half of the workers who changed jobs saw a rise of 9.7%.

In other words, to compete in a candidate-driven market, companies have to offer new hires more than they offer current employees. This can make recruiting easier, as more people want to change jobs to snag those higher salaries. But it can cause internal strife.

Collier also questioned why companies aren’t giving more significant increases to current employees to help stave off the effects of the Great Resignation. It’s more expensive to hire from the outside than retain employees.

What’s more, having employees know what salaries are out there is great for recruiters. It weeds out candidates who wouldn’t be interested in the position because the salary is too low. When expectations match, it can be a more straightforward process.

However, Jessica Miller-Merrell, chief innovation officer at Workology, points out that these imputed salaries may be inaccurate, and that can cause problems — not just for candidates and recruiters but for brands. She explains: 

“If an employer chooses not to disclose a salary range and is assigned one by algorithm, it could mean a lot of applicants to weed through because of the assigned salary range, only [for candidates] to find out later that the salary for the position is actually much lower, which could negatively impact the employer’s brand.”

So, if a candidate sees Indeed’s estimated salary of $75K – $85K per year, and a candidate applies based on that and then receives an offer at $65K, it probably won’t be Indeed’s failed algorithm that they’ll be angry with.

It will consequently be necessary for recruiters to give salary ranges when the actual ranges are a mismatch with Indeed’s algorithm.

This is a positive move for candidates who find salaries very important. However, it’s not the only important thing in a job, especially for Gen Z, who prioritize work-life balance and growth opportunities. But even for Gen Z, salary comes in third.

Important Considerations

If your company is not disclosing salaries and Indeed estimates them, you need to know how they come to their figures. Indeed describes the process as using “proprietary estimation models” that include “provided job title, experience qualifications, education requirements, and job location, etc.” A standardized title (regardless of the internal title used) can help make these estimations more accurate.

Regardless of your company’s philosophy on pay transparency, this trend of openness — forced legally or estimated algorithmically — is likely to continue, giving job seekers more data. Hopefully, this results in better fits. And those better fits result in an engaged, productive workforce.

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