Your Employees Are Reading Your Salary Range Too
By Lyn Kleinbach-Reilly, Founder, The Kleinbach Group
Part 2 of a two-part series on salary transparency. Read Part 1: What Happens When the Best Candidate Isn’t in Your Budget?
Your candidates aren’t the only people reading your salary range. Your employees are too. That may be one of the most important consequences of salary transparency companies need to consider.
Imagine this. You’ve been with a company for six years. You’ve helped grow the business. You’ve taken on more responsibility. You’ve trained people. You’ve stayed through the difficult years.
Then one morning you see your company advertising a position similar to yours: $165,000–$190,000.
You make $148,000.
We wanted salary transparency. Now we’ve got it. And sometimes what it reveals is uncomfortable.
A company may discover that the market moved faster than its compensation structure did. The salary required to recruit someone today may be higher than what it’s paying somebody who has been loyal and productive for years. Now a recruiting problem has become a retention problem.
Why the Easy Answer Isn’t Enough
This is where companies can get themselves into real trouble. Because the easiest response is: “That’s what we have to pay to attract somebody in today’s market.”
Maybe it is. But try explaining that to the person sitting three offices away who has already been doing the work.
Salary transparency forces companies to confront something they could once keep relatively quiet:
What we are willing to pay to attract someone.
What we are willing to pay to keep someone.
And whether those two numbers make sense together.
The Conversation Companies Can’t Avoid
Robert Half’s 2027 enterprise compensation research found that 91% of employers use or plan to use external market data to benchmark salaries, 93% intend to establish clear pay bands, and two-thirds are reviewing salaries for parity.
That last part matters. You cannot have a serious conversation about pay transparency without eventually having a serious conversation about pay equity inside the company.
And transparency doesn’t mean everyone doing a similar job should make exactly the same amount. Experience matters. Performance matters. Specialized expertise matters. Results matter. Responsibility matters. The market matters.
Even employers with formal compensation structures acknowledge that individual pay can vary based on responsibilities, qualifications, experience, and performance. But companies need to explain those differences. That’s the new standard.
Because employees no longer have to wonder what their company thinks their job is worth. They can see it. And if the answer surprises them, they’ll ask questions. Some of those questions may be overdue.
Strategy Before the Posting
Maybe the real lesson from salary transparency isn’t simply that companies need to publish better salary ranges. Maybe it’s that they need a better compensation strategy before they publish anything.
Look at the people you already have. Look at the external market. Look at performance. Look at tenure. Look at the people you absolutely cannot afford to lose.
Then ask the uncomfortable question: If we had to hire this person today, what would we have to pay them?
And if that number is substantially higher than what you’re paying the person who already works for you, you may have discovered a problem worth fixing before your employee discovers it in your next job posting.
Salary transparency isn’t creating all of these compensation problems. It’s exposing them.
And maybe that’s exactly what transparency was supposed to do.
Source: Robert Half, 2027 Salary Guide enterprise compensation research; Cornell University compensation and pay-structure guidance.