HR Experts Share: The Right Way to Do Pay Transparency
What used to be a whispered conversation or something discussed in private Slack channels—how much someone makes—is now front and center in job ads across the country. With 12 states and counting enacting pay transparency laws, salary disclosure is becoming the new standard. While the intent is rooted in equity and fairness, the reality can be more complex.
For businesses, this shift can bring both growing pains and significant opportunities. From internal equity issues to reshaping candidate pipelines, organizations are being forced to reexamine not just what they pay but how they talk about it.
To explore how businesses can adapt to this changing landscape, we turned to Senior Executive’s HR Think Tank—a group of experienced HR leaders who have spent decades navigating compensation strategy, workforce culture and regulatory transformation.
The Promise—and the Pressure—of Pay Transparency
Transparency laws aim to bridge pay gaps and foster more equitable workplaces. But they’ve also opened Pandora’s box for companies unprepared for scrutiny.
“Let’s be real—pay transparency laws weren’t written by HR practitioners. The intent? Good. The implementation? Messy,” says Michelle Arieta, Founder of Polaris Pathways, which advises HR and executive teams on scalable people strategies. “Now HR is left translating legal language into real-world practice.”
For HR teams with strong compensation philosophies, Arieta says the shift can be empowering: “Posting salary ranges can boost trust and filter candidates early. But without a strong comp philosophy and clear internal ranges, transparency can backfire.”
The lesson? Transparency without context can create confusion, erode trust and cause internal equity issues to boil over.
“Job listings with sensible salary ranges attract better candidates faster.”
A Cultural Wake-Up Call
The transparency movement is forcing organizations to confront not just what they pay but why.
“Companies that see pay transparency as just another rule to follow are missing out,” says Francesca Ranieri, Founder of Frank. and a former talent leader at Nike and Deloitte. “Those that use it to build trust gain a real edge in the job market.”
Research from SHRM supports this, finding an increase in both the quantity and quality of applicants: 82% of workers are more likely to consider applying to a job if the pay range is included in the job posting, and 66% of organizations that list pay ranges say this has increased the quality of applicants they’re seeing.
Ranieri cautions against meaningless or performative compliance: “Posting ridiculously wide ranges ($50K–$150K) just makes you look dishonest or disorganized.”
She’s not alone. Michael D. Brown, Senior Managing Partner at Global Recruiters of Buckhead, agrees that transparency—done right—can elevate both recruitment and retention efforts. “By attracting informed and serious candidates, businesses streamline the hiring process and foster trust,” he explains. “However, companies might face internal equity concerns when current employees discover pay disparities.”
“Transparency—done right—can foster trust and streamline hiring.”
HR’s Strategic Role in a Transparent Era
With compensation under the microscope, the role of HR is no longer behind the curtain—it’s center stage.
These conversations are already happening, according to research from Bankrate—especially among younger employees, a fast-growing segment of the workforce: 41% of Gen Z workers and 40% of Millennials report sharing their salary information with their coworkers or other professional contacts. But with salary transparency practices, HR has the opportunity to lead the conversation.
“HR must lead: align leadership on comp and equity, and train managers to discuss pay,” says Arieta. “This isn’t just compliance—it’s credibility.”
The payoff? More aligned teams—and more trust from the talent market. According to research by SHRM, in the U.S., 73% of workers are more likely to trust organizations that provide pay ranges in job postings versus organizations that do not.
“Mandated pay transparency empowers HR to foster more equitable compensation structures… but it also requires public disclosure of salary ranges that may expose internal inequities.”
According to Ulrike Hildebrand, Senior Consultant at Pin-Point Solutions, disclosure is also a catalyst for modernization, particularly among smaller organizations.
“Mandated pay transparency presents a catalyst for addressing pay equity disparities,” she explains. “It empowers HR to foster more equitable compensation structures… but it also requires public disclosure of salary ranges that may expose internal inequities.”
That’s affirmed by the SHRM research, which found that over a third of organizations said that listing pay ranges led to an increase in current employees requesting a pay raise. Hildebrand recommends companies start by identifying and correcting those gaps now—before they become viral Slack threads or Glassdoor reviews.
The good news? In the long run, Deloitte research found that employees are 1.7 times more likely to be satisfied with compensation when there is pay transparency.
“Focus on collaboration over control. Talent will value honesty and transparency more.”
Beyond the Job Posting: Culture Still Matters
Even in a world of exposed pay ranges, culture remains a key differentiator. And the savviest HR teams aren’t just talking numbers—they’re reinforcing values.
“Spotlight the benefits of the organization’s workplace culture and leadership,” says Chandran Fernando, Founder of Matrix360. “When HR leaders change their approach to recruitment and retention—focusing on collaboration over control—talent will be attracted and will value honesty and transparency more.”
The result? A stronger employer brand—and candidates who are joining for the right reasons.
Actionable Strategies: HR’s Next Moves in Pay Disclosure
The HR Think Tank outlined key steps organizations can take now to strengthen both compliance and competitiveness in the pay transparency era:
1. Audit Internal Equity Before Going Public
Before publishing any salary ranges externally, benchmark current compensation across similar roles to uncover (and fix) internal inconsistencies.
2. Define Your Compensation Philosophy
Clarify what guides your salary decisions—for example, market data, internal equity, role complexity—and socialize this across leadership and management teams.
3. Train Managers on Pay Conversations
Make sure managers understand how pay is determined and can speak confidently to employees about compensation, growth and performance.
4. Use Salary Ranges to Attract, Not Deter
Avoid overly broad ranges that feel disingenuous. Use transparency to explain career progression and pay structure—not just comply with legal minimums.
5. Invest in Digital Infrastructure
Leverage HR tech platforms to centralize comp data, automate market comparisons and stay on top of evolving state-by-state requirements.
6. Communicate the “Why” Behind the Numbers
When publishing salary ranges, add context where legally permitted—like geography, experience level or performance—to avoid confusion.
From Obligation to Opportunity: The Future of Salary Transparency
Pay transparency laws are more than just a compliance box to check—they’re a wake-up call for organizations to align their compensation strategy with their values and culture.
As Arieta says, “These laws are a push toward progress. But progress only works if your foundation is ready.”
HR leaders are uniquely positioned to guide this transition, not just with spreadsheets but with storytelling, strategy and empathy. In a competitive talent market, that could make all the difference.
