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Is the Salary Range You’re Offering Too Broad?

Is the Salary Range You’re Offering Too Broad

When you post a job opening for your organization, how broad should your salary range be? The answer to this question is of growing importance in the quest for attracting top job applicants and retaining existing team members.  

As a senior talent recruiter with Goodwin Recruiting, I see a variety of pay ranges offered by my clients and other hiring managers for their open positions. I’ve seen what can happen when a salary range is too wide and when it’s fittingly narrowed down. Both real-world scenarios in the job market are discussed below.  

If you find yourself wondering how broad a salary range you should (or shouldn’t) include in your job postings, these are valid and useful insights to help guide you.  

What happens when a salary range is too broad for a job posting?  

1. It can create confusion

When job applicants are presented a wide salary range, it can create uncertainty around whether they will be offered their desired salary. It can also have the unintended consequence of deterring certain job applicants from applying at all. Most job seekers enter their job searches with clear salary expectations or salary requirements.

“Not only do wider ranges limit the informational value of the pay range for job seekers, but psychology theory suggests that wider pay ranges could unintentionally and disproportionately deter women from applying to positions in the first place.” — Foster Business Magazine

2. It can create pay inequality

Pay inequality, or pay inequity, is when people are paid different amounts for doing the same work. This can be based on gender or a variety of demographics.

3. It can create distrust among existing and prospective employees

If existing employees are being paid on the lower end of the salary range that you share in a new job posting, it can build their distrust if newer employees might be brought on at higher salaries than what they’re receiving. This can negatively impact existing employee retention, and again, lack of clarity can deter great candidates from applying. 

“If an applicant is looking at a posting with a large range, they may be skeptical of the organization’s pay transparency and pay practices as a whole. This can reduce the number of applicants due to lack of trust and even lead to distrust among current employees, who may see large ranges and wonder why their own current pay doesn’t line up.” — Payscale

What happens when a salary range is narrowed down for a job posting?  

1. It reduces pay inequality

Being open and specific about your salary ranges will create a more transparent, open, and honest culture for employees and candidates alike. Not to mention that paying people the same amount for doing the same type and level of work is simply the right thing to do.

2. It attracts the right candidates

By being transparent about the salary range that you offer, you’ll find candidates with the right salary expectations and who appreciate your truthful and honest approach with your job posting.

3. It keeps you in line with pay transparency laws

More and more states are adopting pay transparency laws.

“As of September 2023, six states have enacted laws requiring employers to disclose salary ranges in their job listings. These include California, Colorado, and Hawaii (effective January 1, 2024), Illinois (effective January 1, 2025), New York (effective September 17, 2023), and Washington (effective January 1, 2023). In some of these states, employers under varying size thresholds may be exempt from the law (for example, those under 15 employees in California, Illinois, and Washington).” — Foster Business Magazine  

Get current insights from a prominent national recruiting agency  

A lot of factors come into play in determining pay range for a new job, from the job description to job title, skill set, level of experience, years of experience, cost of living in your market, the going market rate for competitive job offers, and industry compensation trends. The entire compensation package is a factor, too, from benefits to profit sharing or stock options. Your salary ranges are unique. Striking the right balance may take some internal salary negotiation among HR teams and hiring managers before posting a job in the first place.  

If you would like to receive complimentary insights, advice, or recommendations on your existing salary ranges, including how they stack up against other employer offerings in your geographic area or industry for similar roles, feel free to call on me. Goodwin Recruiting operates nationwide and is in the know on hiring best practices and top talent acquisition methods in every major market.