Human Truth Podcast | Ep. 10: Is pay transparency here to stay?
In this episode of the Human Truth Podcast, we discuss the rising trend of pay transparency and whether or not more companies will join in.
Welcome to The Human Truth Podcast where, each episode, we take a closer look at a popular workforce statistic ripped from the headlines and ask: Where’d it come from? Is it true? And why should we care?
In this episode, we examine this stat on pay transparency from Claro Analytics:
Pay transparency continues to rise: The ratio of new publicly posted jobs that include salary data is 36%, up about 10% from last year.
Host Ian Cook is joined by Michael Beygelman, the CEO and founder of Claro Analytics, to discuss the rise of pay transparency. For the report, Claro looked at U.S. job posting data to learn about pay transparency trends, a topic making headlines due to a recent law passed in New York, with other states following suit. As a leader in labor market intelligence, Michael shares his thoughts on whether the pay transparency trend is likely to continue, and what that means for DEI progress.
On the podcast this episode:
Host, Ian Cook is Visier’s VP of People Analytics
Guest, Michael Beygelman, the CEO and founder of Claro Analytics
Mentioned in the episode:
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Producer: A Visier survey found that today's jobseekers and employees overwhelmingly prefer pay transparency. However, many companies struggle with knowing when and how much to reveal. Get Visier's report, Pay Transparency: Should Salary Be a Secret? to learn more.
It's The Human Truth Podcast, where each episode we examine a workforce statistic ripped from the headlines and ask, where did it come from, is it accurate, and should we care? This week, we're looking at a stat from Claro Analytics that found that 36% of all new job listings include salary info, which is about 10% from last year. For that, let's get into it with host Ian Cook and special guest Michael Beygelman, the founder and CEO of Claro Analytics.
Ian Cook: Hi, I am Ian Cook. I'm the host of The Human Truth Podcast, and today we are talking about pay transparency, an issue that's been long running through 2023 and is only going to grow in importance as we go forward. We're looking at the fact that companies are having now to include information about salary in their job openings.
Joining me today is a friend of mine, Mike Beygelman, someone with a real passion for the labor market and the data around that. Mike is the CEO of Claro. They've done a bunch of looking at how is pay transparency growing based on their labor market technology.
Claro was recently joined by WilsonHCG, or joined part of WilsonHCG, to bring that insight about the labor market into a broader service offering, which includes things like recruitment process, outsourcing, executive search, contingent talent availability, as well as that data-driven view of talent intelligence. So not only a great technologist and a great human, but real rich insight into the labor market and how it's behaving. So thanks for joining us today, Mike. Hope you're well.
Mike Beygelman: Yeah, thank you so much. It's really great to be here. Thank you for the incredible introduction. I hope I live up to all those wonderful things you say about me.
Ian Cook: Well, let's go and see. Let's jump into this. I think we've got a broad-based audience, Mike, and not everybody is as close to the data as you and I live. So let's start with what is pay transparency? What are people being asked to do when they're being asked to be transparent about pay?
Mike Beygelman: Pay transparency started probably 2016, something of that timeframe with hourly rates. And then it quickly evolved. Right before heading into COVID, you had companies that were really leaders in terms of equity, inclusion, belonging, et cetera. And they kind of led the charge in making sure that they were advertising pay rates, that they were public, so there is no potential for discrimination, et cetera. And then in recent years, you've seen this trend really accelerate with legislation, et cetera.
Ian Cook: Pay transparency then is companies being required to or choosing to actually put the price for the job on the posting. I mean, in the past, you and I remember the pay commensurate with experience or pay to be negotiated based on all these factors. It was left very vague, whereas this transparency driver is actually like, here's the price for the job.
Mike Beygelman: Yeah.
Ian Cook: It's quite a change.
Mike Beygelman: Yeah, it's a huge change. To be honest, when I was younger, that was awful. Remember when we were looking for work, it's like, well, how much does it pay? You don't know if you should waste your time. You don't know if you shouldn't waste your time. And then there was issues around how come the person next to me is making more and why is this person making less and et cetera. I think it was just a hot mess.
Ian Cook: That's a good way to describe it then. I guess worth just jumping in because Claro shared a stat which caught our eye that you'd seen an increase to 36% of all job listings actually including salary and flow. That was a 10% increase on 2021. So that's a step up.
Mike Beygelman: Yeah, huge.
Ian Cook: How do you know this? What are you doing that means that you know this?
Mike Beygelman: Yeah, yeah. We've been sort of spidering workforce data really for almost 10 years now. Some of the things is we sort of crawl and spider all the job postings. We do this at scale, probably 40 million a week, so relatively large sample size.
Over the years, we've just noticed that more and more job postings started to include wages, some were hourly, some were monthly. And this is kind of like a global phenomenon, not just a U.S. thing. Annual, they started providing ranges of compensation, then they started providing benefits. You kind of saw this trend really over the last several years pick up. We see this because we're able to spider all the job postings, so we see the information there.
Ian Cook: There's been a couple of changes as well that some listeners may be aware of and others may not. There's been a bunch of regulations from different states. I think New York kicked things off. But again, do you see any association between legislation and requirements for transparency and the amount of transparency that's being published and where it's happening? Is it just all driven by the law, or are there other things at play here?
Mike Beygelman: Yeah, I think it started with good intentions. This is what I believe. Maybe I'm altruistic, call me a dreamer, but let's say I believe it started with good intentions. At least I want to believe this, right?
Ian Cook: Yeah.
Mike Beygelman: I think it started with companies that valued the humanity of things. I don't know how to say that. But they wanted to make sure that they were transparent what they did. Sometimes they were in the tech sector, but not always. I think it basically started there.
What I think happened is the companies that were doing this, when you do the great places to work and all these kinds of things, they started to bubble up to the top of companies that performed better, companies where people were happier, companies that had less incidents of regulatory problems. You follow? There was just this correlation. I think that as the world became more aware that this is really how things should be done, states started looking at it.
I think Colorado was one of the first ones. I don't know which state was. Maybe Colorado, but I think it was out west. But today there are 11 states in the U.S. that have pay transparency as something that's actually regulated. Now, there are 30 states at all that have some level of pay transparency, while some do it at the city, some do it at the municipal level, some do it only for government jobs. But 11 states actually have laws that require this now.
I think that it's the right thing to do. You know what happens. Whenever the government sees something that business is doing, which just makes sense, they want to adopt it. It's like, I want to adopt this. I think this is good. And then the government begins to champion the cause. So I think we're seeing this pendulum swing now-
Ian Cook: We're seeing it move.
Mike Beygelman: ... to where it's becoming more regulated. Yeah, yeah.
Ian Cook: As you say, as we sort of mentioned at the top of the conversation, it's quite different from the traditions of pay. It used to be you would never talk about pay. I mean, I certainly know my parents would never go to a party and ask people, "Hey, what do you earn and what didn't you earn?"
It was definitely one of those kind of things that was kept quiet, whereas nowadays people seem not just more open to share commentary, but actually to want it to understand how that level of transparency, I'd say normalizes or kind of levels out certain aspects of the employer, employee relationship. Do you think we're going to continue to see this rise in transparency?
Mike Beygelman: I absolutely do. On a personal note, I have two kids. One is 25 and one is 22. The reason why I say this is that because I have them at this age, I know some of their friends. I typically have an interesting view because what I'm starting to see is from a societal perspective, we have this, I don't know, this kind of drive for fairness. Everybody that I talk to that is let's say between a certain age, correct, has a very high orientation towards why we need to make things fair. Fairness is a behavioral thing.
So I think it'll continue because as those people enter the workforce, our kids enter the workforce, and they get leadership positions, they're not going to change their view. Does that make sense?
Ian Cook: Yeah.
Mike Beygelman: Their view is always going to be about fairness. I think that from a leadership perspective that leaders will want to make things more fair versus less fair. This is kind of how I see it over time.
Ian Cook: No, I think it's really useful and interesting perspective because I think some people might say, oh this transparency, it's a fad, it'll go away, we'll have some change in government and things will adjust, whereas I actually think I would see things from your perspective. We have a new generation in work. They come with a different experience in terms of how much of their personal lives they share. So sharing pay sort of feels a bit natural, and I think it's-
Mike Beygelman: It's super natural.
Ian Cook: ... a real marker of that change.
Mike Beygelman: Totally. And social media has it. Think about it. Everything we do, we post on Facebook. So we're already about it. It's right, wrong, or indifferent. Hey, look at my food, my cute dog, I'm skiing, things of this nature.
I think that we as a society have become more open in terms of sharing. We close the internet blinds a little bit less. If you remember, in the old days the blinds were closed. Now the blinds are kind of open. I think that's transcended into the world of work where when go back 30 years, it's like ha, I'm making more than a guy next to me and I'm not working as hard. Now it's the opposite. It's like, oh, I don't want the person next to me to make any less.
Ian Cook: No, for sure.
Mike Beygelman: It's a huge change.
Ian Cook: Huge change. There's been some pretty radical experiments in this space as well. There's a guy called Ricardo Semler who wrote a book called Maverick, where the teams actually decided each other's pay rises. They took it to that-
Mike Beygelman: Crazy.
Ian Cook: Again, wouldn't work in every organization, but they took it to that radical basis of actually the community decides your contribution and the community distributes the reward for it. It worked better than people anticipated. Again, not something you can instantly jump to as a business, but I think the experiments are definitely out there.
Mike Beygelman: I'm a big fan of it and a proponent of it. Honestly, I believed in pay transparency a long, long time ago. So we had built our tool, which we were referencing to in terms of where our data comes from. I built it with a vision that we were going to have pay transparency.
I could have been totally wrong. We could not be talking right now because I could have totally missed it, but I started to see the societal trend where it was not a fad. This wasn't like the low carb diet kind of thing where the low carb diet came in and out for a few years. Now we eat carbs again. Now suddenly carbs are good, that kind of thing.
Ian Cook: It's here to stay.
Mike Beygelman: It's here to stay.
Ian Cook: Which leads me to another area of questioning because there's always a curve around people's adoption, comfort, understanding of these changes. What are some of the complexities around pay transparency that employers need to be aware of? I mean, you highlighted one right at the gate. There's what, potentially somewhere between 25 and 30 different regulatory frameworks bouncing around depending on the city or the state. That's definitely one. But what are some of the other complexities you would see an employer needing to navigate in terms of pay transparency?
Mike Beygelman: First of all, imagine operating in lots of different states, correct?
Ian Cook: Yeah.
Mike Beygelman: In one state, you can ask for a person's salary history, but another state, you can't.
Ian Cook: Yeah.
Mike Beygelman: This is problematic because if you think about corporations, companies incorporate so they could do what I call rinse, wash, repeat. Does that make sense?
Mike Beygelman: Just in simple terms, right?
Ian Cook: Yes.
Mike Beygelman: You do the same thing over, set it, and forget it. But when you have this kind of non-uniform application of what pay transparency means, it becomes really complicated.
Ian Cook: For sure.
Mike Beygelman: I think this is one area. And then this gets compounded with remote work. This is a problem. Does that make sense? It's not an easily solvable problem, but we will solve it. But this is a real problem because people travel and then they go to an office in Nashua from four different states. Does that make sense? But each person had a very different experience.
Ian Cook: No, for sure. I think the whole move to remote work has created a wrinkle in the traditional practice of compensation where pay based on the state price is kind of meaningless because I could be working for a San Francisco based startup, but living in Utah or living in Arizona. So do I get paid California rates or do I get paid Utah rates? What does that actually mean? So definitely see a need for some…
Mike Beygelman: The paradigm shift is so seismic, but I think we haven't realized it. It's a little bit like an earthquake. You get the first shock, but it's the aftershocks that are the real problem, right?
Ian Cook: Yeah. Again, going back to some of those aftershocks, if you were talking to advising business leaders who are a little hesitant around this, who are looking at either doing the minimum to stay compliant or even just trying to avoid it until they get called out, what would your advice to a business leader be around how to think about pay transparency, both from the external perspective and internally for their business?
Mike Beygelman: I think that we are at a point in time where it's kind of required whether it's regulated or not being that, for example, if you're attracting people, no one wants to waste time applying for jobs that aren't real. Let's just face it. It's a huge waste of time. We also don't want to apply for a job if it doesn't meet our bare standard of what we think we're worth. Now, this is arbitrary, but it doesn't matter. I think I'm worth X.
Ian Cook: We all have a number in mind.
Mike Beygelman: Amen. Amen.
Ian Cook: When we're applying for jobs, we all have a number in mind, for sure.
Mike Beygelman: We're all there. We all think we're worth X. The interesting thing is that if we think we're worth $20 and the job says, I give you $7, you're not going to want to apply. Correct?
Ian Cook: Yeah.
Mike Beygelman: So, I think the reality is, is the companies that have fair pay at the epicenter of their ethos, does that make sense?
Ian Cook: Yep.
Mike Beygelman: Those are the ones that should really run that walk towards pay transparency because they're always going to be paying people fair, which means they're always going to be at market, which means they're always going to attract better people and they're going to build an employer brand based on this. This is really important.
Ian Cook: I think that is quite important because there's another factor that you highlight in terms of the availability of information. If I'm a candidate and I have one company that's publishing what I can expect to be paid for that job and I have another company that's not, I'm going to make an assumption about company A that's open versus company B that's closed. I think I'm more likely to apply to company A because I know I'm going into somewhat of a negotiation, at least with a starting place, where if I go to company B going into negotiation.
Mike Beygelman: You know the bar, you know where the tide. How far is the tide out? It's like, is the tide out a lot? Is the tide in? You at least know where you are.
I want to add two things, and I want to get your point of view on this topic as well. We do a little bit of quid pro quo here. On the one hand, this is an opportunity for companies, correct?
Ian Cook: Yes.
Mike Beygelman: On the other hand, it's actually a problem, not from an application perspective, because okay, maybe you could configure Workday and other systems to do this. I'm saying this is more of a problem by what is this job worth? Because I think companies never really thought about what a job is worth. They just said, oh, in Connecticut a software engineer in Stanford has to make X because this is the standard of living. There is no rationale whether that job was worth that much money or not.
Now, we have a very different problem because when you could work remote and location doesn't really matter that much anymore, you now have to ask yourself what is the actual value of this job? So I think business leaders will have to reevaluate how they establish compensation based on this idea that what is the job actually worth?
Ian Cook: Yes. I think that's one of the challenges. The other challenge that I see is when you've got a hot job market, so what you're willing to pay externally to draw people in is actually above what you're paying internal people.
Mike Beygelman: Correct.
Ian Cook: You've got pay transparency. It's kind of like, how come my job is being advertised? Can I just reapply for my job again and I'll get the 10,000 pay raise?
Mike Beygelman: We all know people that were here for four years extremely loyal and say make 70k for a job, and then somebody gets hired beneath them at 92.
Ian Cook: Yep. No, exactly. That seems like a great place to go to break, Mike, so we can come back and dig more into some of these challenges in the next piece. Let's take a break, and we'll be right back.
Producer: Are you losing talent because of your pay transparency policies? A Visier survey found that 68% of employees would switch employers for a greater pay transparency, even if compensation was the same. Learn more in Visier's report, Pay Transparency: Should Salary Be a Secret?
Ian Cook: We're back. I am Ian Cook, the host of The Human Truth Podcast from Visier. Today, I've been joined by Michael Beygelman, who is the founder of Claro Analytics and a huge advocate for the use of people data to help shape business. Today our focus has been on pay transparency, something that Mike and his team have been studying through their ability to spider, which means scrape the web, I understand, job postings and kind of build insights into that.
As we sort of highlighted at the start, the salary used to be taboo, but Visier did some research and we see that 79% of employees actually want some form of transparency. That's a kind of stat going back to what we were touching on earlier, that there's been this radical change rather than people saying, "I don't want people to know anything about me," actually almost 100%, let's just 80% of people are looking for that openness.
We've talked about the benefits around attracting jobseekers. What do you think are the other benefits potentially related to diversity, potentially related to how organizations engage with employees? Maybe we should touch on the diversity one first. How much do you think pay transparency can help with diversity?
Mike Beygelman: Personally, I think it's huge. I think it's a step in the right direction because essentially is that historically when things are done in private, they foster doubt in cynicism. Does that make sense?
Ian Cook: It does.
Mike Beygelman: Remember when we were kids, when your parents say, "Can you go up to your room?" it's like, oh no, they're going to talk about me now. Whether they are or they aren't, I don't know, but the human nature says they are. I think that from a diversity perspective, it's been huge because it helps at the very earliest stages to remove doubt and cynicism and skepticism. Does that make sense?
Ian Cook: It does.
Mike Beygelman: Knowing that no matter who gets this job, this is what the job pays, that I'm not going to be offered less pay because I'm a minority, for example.
Ian Cook: No, and for sure, because we spent time looking at a thing called the CEO pay ratio or the gender pay gap. Again, one is legislated in the US, the other is legislated in the UK. But a lot of that found that women systematically end up in lower paid roles often because employers have the policy of we'll ask them what they were paid, see if we can get them to start the job for that. As soon as you're in a role and you're getting lower pay and you're going into a non-transparent pay situation, as you've put it, you're on that back foot of like, well, am I getting paid what I'm worth?
Again, many, many examples where a man starting a new job would be paid more than a woman with exactly the same credentials starting the same job because of this lack of transparency. I think that is one of the elements around fairness, elements around actually shrinking the gender pay gap that is a really powerful potential benefit from this. Others that you would see happening around either diversity based or again, just sort of helping people navigate work?
Mike Beygelman: I think quick, the whole employee slash candidate experience is greatly enhanced. Forgive me for being so direct about these things-
Ian Cook: No, for sure.
Mike Beygelman:... because we've been through it all, but it's really interesting because if you think about it, the role of the corporate recruiter up until the last five, six years has essentially been a salesperson. Your job is to buy something for as cheap as possible, right?
Ian Cook: Absolutely.
Mike Beygelman: That's like your job. Your job is like, woo-hoo, you got salary increases because you were able to hire 20 people at a lower wage. This is such the wrong message to send, but we now realize this.
I think that this is really good for the employee experience as well as the hiring experience because the recruiters are becoming more about brand ambassadors and helping to articulate the value proposition of actually being part of something rather than their core job is being to negotiate 5,000 a year less. This is the value system.
Ian Cook: As you said, it creates a more even playing field. Potentially taking a slightly different tack here as well, I know that at Claro basically on a daily basis you're scanning the employment market, looking at postings and such. We hear lots and lots of stories around the layoffs. There's potentially a perception out there that the labor market has gone flat. Now, what are you seeing currently in terms of some of the dynamics of, are there no jobs out there? Are there more jobs out there? What's actually happening in terms of recruitment volumes?
Mike Beygelman: As of last week, there are 9.9 million open jobs in the US.
Ian Cook: 9.9 million. Wow.
Mike Beygelman: Well, plus or minus, right?
Ian Cook: Yeah. No, give or take. We understand this.
Mike Beygelman: Speaking like a quant. But let's just say there's somewhere around 10 million jobs. There's no shortage of work, I don't think. I think I've talked to you about this in the past as well, but for the listeners, it's sort of like, you know when you come down from a tall mountain, suddenly everything looks flat, but you don't realize you're still 6,000 feet above sea level. It just happens to look flatter where you were before.
Ian Cook: I think that's a perfect description, and I think that's again where the data really helps to highlight things, Mike. We've been in a peak kind of extreme layer, so when it slows down, it feels slower, whereas we've been going 1,000 miles an hour, we're now going 800 miles an hour. That's still really fast.
Mike Beygelman: Yeah, yeah. We look at it, in some sectors, it's still a bit of a hotter market than it was a year ago. In some segments, maybe a little lower. But generally speaking, we're pretty much where we were 12 to 14 months ago. It's kind of to historic levels. We just got off of this hiring frenzy and potentially even over hiring. I mean, look, companies sometimes don't hire enough people, but unfortunately sometimes they also over hire.
Ian Cook: Again, a lot of the commentary in the press hasn't focused on how many people were hired than the prior year, because I don't know the exact numbers, but I believe something like Facebook that had a large layoff, they added 43,000 people in the prior year. That stat aligned with the numbers that are then being let go. Kind of says we were going through a peak as opposed to coming down…
Mike Beygelman: I think it's hyper competitive. We think that when we have more talent, the product cycles are shorter. There's all these hypotheses that companies have. Maybe the market is going to be a little stronger. I mean, let's face it, there's also geopolitical things that are beyond the control of any organization, right?
Ian Cook: Oh, absolutely. People are going to be listening to this in 2023, and I think that's a key point in terms of understanding what's my year like look ahead. I think the data you're sharing says the year ahead still looks like a volatile labor market. At 9.9 million openings with potentially five-ish million unemployed, people still have their choice of job.
As our stats found, 79% of employees want some form of transparency. 55% of jobseekers won't apply to a job without some kind of transparency. So it kind of says this transparency thing is here to stay, it's now a fact of life in the job market, because the other thing I would highlight, and I'm interested in your response, when places like Colorado and New York, other states start to introduce it, it sort of becomes the bar, it becomes the baseline that other people have to match. Even if it's not legislated, you may end up just publishing because otherwise you'll lose out. What do you think of that?
Mike Beygelman: You have to compete. This is the thing. If you don't, then you're at a competitive disadvantage because at the end of the day, people are going to basically gravitate to the easiest way to find a job. It's just human nature. If it's easier for you to apply a job, it's like, oh, I'm going to apply here because the wage seems okay, and so this is what I kind of want to do, you're going to apply there more so than one says wages TBD, because I think the society is getting away from liking confrontation. I see people becoming less and less confrontational. This is the whole fairness fad phenomenon. Does that make sense?
Ian Cook: It does.
Mike Beygelman: It's like in the hiring process, when they don't publish job pay rates, it's just so confrontational. It's like, oh, you have to ask me how much do I make? What do I tell them? Do I lie? Do I not lie? What if they check? That whole process is awful.
Ian Cook: We've been through those processes and they were really uncomfortable, whereas you know what, I'm offering this for the job. Does that match your expectations? That's a really great place to get started.
Mike Beygelman: It's super great. I'm a huge fan of it because this'll actually remove friction from the hiring process because as we all know, sometimes you could just get hung up on salary negotiations, and then both parties go, I don't want to work here anymore. And the company's like, well, I don't want you to. It's like, wait, you went from being in love to out of love in four weeks over friction for no reason.
Ian Cook: For no reason, exactly. That's a great place to round out the conversation. This pay transparency thing, it's definitely marking a change in the way employers and employees interact. I think a lot of that changes is a bigger part of the overall change in the labor market that you are highlighting.
Even though it feels like we're in tough times, we've still got a high volume of jobs relative to jobseekers. That's making the balance between employers and employees is different from, say, it's been in the past. And this transparency is what people are looking for, expecting. When you've got it's really hard to give it up. Again, I see that this pay transparency is going to carry through.
Any final thoughts from yourself, Mike, around what should we expect in 2023 going forward about the dynamics of the labor market? Anything that if you pull up your crystal ball that you think is worth sharing?
Mike Beygelman: Yeah, I think that by the summer companies will be talking about how hard it is to hire people. This is what I think. Maybe I'm the eternal optimist, but I run a business myself. We're hiring people. We're hiring people actively. We haven't stopped hiring people.
I think that next year Q1 will be a little bit about taking a pulse, taking an inventory. But I think that as we head into Q2 and onward, I think the economy will be fine. I think a lot of the stuff, that the uncertainty will be behind us. My bet is by Q2, Q3, we're going to be talking about a hot labor market again. Let's revisit this to see if I'm just an idiot or if I'm a savant.
Ian Cook: The difference between those two things is always very, very fine.
Mike Beygelman: Very fine, yeah.
Ian Cook: I appreciate you taking the time to talk to us today, Mike. Appreciate the optimism. I think super infectious. I really, really love the energy and love the insights you bring to that from a data perspective. Thanks for talking to us today, we really appreciate it.
Mike Beygelman: Yeah, thanks for having me. Cheers.
Ian Cook: Thanks for listening today, folks. This is an episode of The Human Truth Podcast. We've been talking about pay transparency. We will be back looking at further stats from the headlines and asking ourselves, is this truth or myth? Thanks again.
Producer: Thanks for joining this episode on The Human Truth Podcast presented by Visier. More links and information presented on today's show are at visier.com/podcast. Subscribe wherever you listen to your podcasts. The Human Truth Podcast is brought to you by Visier, the global leader in people analytics, whose mission is to reveal the human truth that helps businesses and employees win together. Today's episode was produced by Grace Sheppard with technical production by Gabriel Kava. Sarah Gonzales is our head of content, and Ian Cook is our host. See you next time. Until then, visit us at visier.com/podcast.