New NYC Pay Laws: How Transparency Can Drive Retention
by Caroline Boyland November 2, 2022
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New NYC Pay Law: What is It?
Kicking off on November 1st, 2022, NYC based employers with more than 4 employees will be legally required to post the minimum and maximum salary range for any job within the city. This is in an effort to prevent and alleviate race and gender based salary disparity.
Transparency is Trending
The great resignation, pandemic, and other cultural factors are leading us into a world that not only desires but demands financial and health equity. Employers being required to share salary ranges in NYC is the first step in working towards closing the wage gap for people of color and women.
While NYC is demanding transparency from businesses, many individual employees are also taking to social media to get the conversation going. Accounts like @SalaryTransparentStreet on TikTok have gained serious attention over the past year, as millennials and gen Z lead the charge to normalize salary conversations. Also, back in February, Journalist Victoria Walker had employees around the world logging into Twitter and LinkedIn to participate in the #ShareYourSalary trend, started by walker in an effort to get these tough conversations going.
The Impact on HR
In addition to hopefully preventing race and gender based salary disparity, these new laws should also streamline complexities for HR teams throughout the interview, offer, and promotion processes. Interviewees will know right off the bat whether or not the role is within their salary requirements, saving both the interview and interviewee from potentially wasted time.
Many organizations and HR leaders, however, have expressed concerns that sharing salary ranges for each role could lead to frustration from existing employees or immediate demands for raises. Because of this, experts have stated that it’s critical to not only post the salary ranges, but to also explain within your organization the philosophy behind the salary ranges posted and clear steps on how employees can reach the next level of career growth and compensation.
Transparency and Retention
It’s no secret that the way a “typical” workplace looks has shape-shifted time and time again over the past few years. Employees have seen and felt the challenges brought about by the pandemic, remote work, mass layoffs, and an impending recession. This has created a sense of unease and uncertainty, which can hurt productivity and workplace culture.
By establishing and publishing compensation ranges for available roles, employees will have a better understanding of what their growth could look like at your company. If they’re considering leaving for a new job, but then see that an internal promotion could increase their salary at your company by X%, they may be motivated to stay and work harder for that next promotion. Traditionally, employees have thought that the only way to drastically increase their salary is by jumping from one job to the next, and this mindset was a major catalyst for the great resignation. If you can mitigate this mindset at your organization and focus on internal growth and foster excitement around taking that next step and reaching that next level of compensation, it can drastically strengthen your retention efforts.
While posting these job salaries could lead to some uncomfortable conversations for HR, the positives far outweigh the negatives. Traditionally, women and people of color hesitate to speak up about salary, negotiate their offers, or ask for a raise. By publicizing your salary ranges, instead of looking elsewhere for a job that pays more, these employees may be more likely to approach their manager or HR team with questions like “I saw that the Senior Director role aligns with the job description and salary I’m looking for as the next step in my career, can you help me understand how I can grow from where I am now into a good candidate for that role?” Making these conversations easier and more normalized within your culture will influence employees to want to stay and grow within the company rather than jumping to a new organization.
Research shows that compensation and salary are the top 2 factors for employees when deciding to stay at a job or leave for a new opportunity. For many organizations, 2022 was a year filled with mass resignations and frequent job jumping — making employee retention a major focus for 2023. For NYC based organizations, sharing these salary ranges can positively impact retention efforts by normalizing salary conversations and helping employees understand how they can grow and succeed at their company, instead of fleeing for the promise of a higher salary.
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