Pay transparency is here. Get used to it. Salary negotiation has long been one of the most complex parts of getting hired. Tech recruiters must have considerable skills to negotiate with job candidates while navigating employer salary caps successfully.
Now, new rules require employers to share the salary ranges on jobs or to allow employees to discuss pay rates without retaliation. The new laws call for pay transparency in the hiring process, and they differ by state. Currently, 17 U.S. states require some form of pay transparency, including California.
California’s law was signed in September 2022 and took effect on January 2023. The rule requires everyone, from IT staffing agencies in-house HR teams to post pay ranges on all jobs in their advertisements. Employers (including staffing agencies) must submit an annual report with pay data to the California Civil Rights Department (CRD).
What prompted lawmakers to take on this potentially controversial legislation? Pay equity laws are an effort to right the wrongs of the gender and racial pay gap that is so prevalent in the U.S. Pew Research reports that in 2020, women earned 84% of what men earned. The number is worse if you are a woman of color. There are equity gaps that put white males at the top of the pay scale over other racial demographics. Pew Research says in 2015, the average hourly wages for black and Hispanic men were $15, while the average for a white male was $21. That’s just one example of a persistent systemic issue that still sees color and gender in creating pay scales. Pay transparency laws seek to change these unwritten rules.
Are pay equity laws a good thing? How does pay equity affect the tech community? Our tech recruiting agency in Los Angeles researched the issue, and here’s what we’ve discovered about pay equity laws and how they’ll affect tech recruiters in Los Angeles—and beyond.
Tech Recruiters in Los Angeles Share How Pay Transparency Will Improve the Hiring Process
Tech recruiters in Los Angeles are talking about the pay transparency rules and how they will impact IT staffing in Los Angeles and the surrounding areas. There is consensus that pay transparency will affect the recruiting and hiring process in several ways.
Pay transparency can level the playing field for underrepresented groups, such as women and minorities, who are often paid less than their white male counterparts. These laws can also help prevent discrimination by creating an objective process that helps eliminate biases, including those unconscious biases that are difficult to eradicate.
Pay transparency laws can lead to more open and honest negotiations during hiring, as both the employer and candidate will clearly understand the compensation offered. Pay transparency rules are beneficial in fields where competition is fierce for highly qualified candidates, such as tech recruiting in major population centers like Los Angeles, New York, Silicon Valley, and more.
Despite some highly publicized layoffs in 2022, tech recruiting in Los Angeles is highly competitive. Pay transparency has benefits for employers and job candidates that are undeniable, including:
- Attracting more qualified tech talent
- Building trust with candidates
- Closing the gender gap in tech
- Improving tech retention
- Cutting IT hiring costs
Pay Transparency Attracts More Qualified Tech Talent in Los Angeles
As we write this, tech recruiting agencies in Los Angeles are busy finding tech talent. These firms have been the go-to resource for companies seeking experienced IT candidates. But pay transparency laws can help these firms attract more tech candidates by creating a sense of fairness and trust within the organization.
If candidates know that pay is based on merit and not just on negotiation skills, they may be more likely to apply and accept a job offer. Pay transparency can improve your culture by creating an open environment that not only helps you retain your existing workforce but also helps you attract new talent. Clear and consistent pay guidelines build a culture of fairness and trust, which can attract job candidates. The truth is that salary still matters to any job seeker, but particularly to the skilled tech worker. But 60% of tech workers are told they should not discuss their salaries. But when salary information is secret, it affects tech recruiting. For example, when salary details are not disclosed in the ad, some job seekers will skip over the opportunity in pursuit of one that does share the pay scale. Listing a pay range will attract truly interested job seekers along with the ones that you can actually afford to hire. It is in this way that pay transparency can increase tech recruiters’ efficiency by attracting more qualified tech talent in Los Angeles and across the state.
Transparent Salaries Build Trust with Tech Candidates
IT staffing in Los Angeles is a competitive endeavor. Tech candidates are highly coveted, and many look carefully for a recruiter they can trust. Most tech job candidates are jaded when it comes to experiencing recruitment tactics that are less-than forthcoming. But salary transparency builds trust with a tech candidate by providing clear and accurate information about the pay range for a particular position. This openness allows candidates to understand how their compensation is determined and what they can expect to earn in the position.
Pay transparency laws help mitigate concerns about discrimination or inequity because candidates see that the pay range is fair and based on objective criteria that apply to any job seeker. Providing salary information upfront allows companies and their recruiting teams to show they are transparent and honest about their compensation practices, which can help to build trust with job candidates.
Pay Transparency Can Help Close the Gender Pay Gap in Tech
Dice researched three years of pay in the tech industry and found, “Nearly every U.S. state shows a negative pay differential, meaning that women are paid less than men.” They continue, “the data represents an industry-wide issue related to unequal pay, well beyond particular state lines and regions.” Their data showed, on average, how much less equally qualified women are paid than men in the tech field:
- California: Women make $5,369 less annually than men in tech.
- Florida: Women make $5,001 less.
- Georgia: Women make $8,314 less.
- New York: Women make $8,914 less.
Forbes says, “The easiest way to reduce the gender pay gap is through pay transparency, or an openness about salary information.” It makes sense that if the pay is hidden, gender or other demographic-based inequity is much harder to spot. Pay transparency shines a light on the tech gender gap by making it harder for employers to discriminate against women or underrepresented groups when setting salaries.
Pay transparency can also create a more level playing field for negotiation because candidates and current employees understand and existing compensation models.
Increase Retention of Tech Workers with Pay Transparency
In addition to helping tech recruiters in Los Angeles and elsewhere find more candidates, pay transparency laws can positively impact your cultural environment. Pay transparency can increase employee retention by building a culture of trust and fairness that helps you retain your workforce longer.
When employees understand how their pay is determined and can see that they are being compensated fairly in comparison to their peers, they are more likely to be satisfied with their job and less likely to look for another job elsewhere.
Pay transparency can also help reduce feelings of resentment or mistrust between employees, which can further promote a positive work environment and increase retention.
Pay Transparency will Reduce IT Recruiting Costs
We waste a lot of time with candidates we cannot afford to hire. Pay equity limits the volume of job seekers with higher pay expectations that don’t match the job opportunity. Pay equity can make for a more efficient and cost-effective hiring process.
Pay transparency can cut the back-and-forth negotiation that comes during the hiring process. Since time is money, pay transparency reduces the time and money spent negotiating salaries during the hiring process because the pay rate is open and available.
Overall, pay transparency can make the hiring process more efficient by providing potential candidates with clear and accurate information about the organization’s compensation practices. Openly sharing pay range data can help to attract more qualified and interested candidates, as they can see that the organization is within their salary range. Salary transparency helps streamline the hiring process, allowing the candidate to make a more informed decision up front instead of at the end of the hiring process.
Need to Hire IT Talent? Partner with the Top Tech Recruiting Agency in Los Angeles
Prosum provides IT staffing in Los Angeles and the surrounding region. We are the premier tech recruiting agency in Los Angeles, with expansive networks and highly skilled tech recruiters. Get in touch with us today about how we can turn the new pay transparency laws into a significant benefit for your company.
For top IT staffing in Los Angeles, contact Prosum!