Jobseekers are learning that there’s the top end of the pay scale, and then there’s the real top end.
As more companies disclose pay ranges in job listings, especially in places like New York City and Colorado where it’s now required by law, what’s listed as the maximum salary may be closer to the middle, according to multiple HR executives and pay experts. Some employers are trying to limit the demands of potential hires seeking top dollar, while preventing existing workers from finding out they are underpaid. Range deflation comes up often on industry webinars, but compensation specialists and some human-resources chiefs worry it could backfire.
“It has come up a lot,” said Melanie Naranjo, vice president of people at Ethena, a New York-based compliance training platform. “Part of the challenge here is that pay transparency is new, so there is this fear among HR people about this new information, that people will not understand it. So the feeling is, ‘Let’s help cushion this, so we are not pressured.’ Do I think it’s the right approach? No.”
Employers have taken a broad interpretation to laws meant to make pay more transparent. When the new rules launched in New York City, some pay ranges were so wide — for example, $100,000 from bottom to top — as to be almost useless. When the Colorado law kicked in, some employers reduced their job postings in the state. The emergence of lowball salary ranges will only add to the confusion and frustration of workers, and could also...
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