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Pay ranges on job listings are widening. One economist calls it a ‘double-edged sword’ for job seekers.


Salary ranges are widening in certain jobs — particularly in technology hubs, and in states with pay-transparency laws.

Jobs in pharmacy, medical information, scientific research and development, industrial engineering and software engineering are showing increasing disparity in pay, according to a new study by Indeed Hiring Lab

While 45% of U.S. job postings included some salary information, up from fewer than 20% before the pandemic, only 1 in 5 of those postings mentioned precise pay in April 2023, the report found.

The average median salary range on a job posting for a pharmacy role jumped to 31.2% in April 2023 from 20% in April 2022. For software development roles, it rose to 35.3% from 28.6%.

New transparency laws requiring companies to include pay ranges in job listings took effect this year in California and Washington, and late last year in New York City.

To put those figures in context: The average base salary pay for a pharmacist in New York City pays $140,230 a year, and for a software engineer, it’s $141,875 a year, according to Indeed data

“A majority of employers that offer some level of pay transparency in their job postings do so by publishing a proposed salary/wage range — ranges that vary widely by occupation, seniority, and geography, among other factors,” the report found. However, “job seekers looking for lower-wage and/or in-person jobs are getting more accurate information in job postings than they were a year ago.”

Pay information is extracted from job postings on Indeed. Salaries advertised as being paid daily or weekly are omitted from the analysis, as are jobs that pay salaries below $7.25 an hour. Indeed tracked the median percentage difference between the top and bottom salary value for U.S.-based job postings. 

New transparency laws requiring companies to include pay ranges in job listings took effect this year in California and Washington, and late last year in New York City. Proponents of the laws say they are meant to help address gender and racial wage gaps. Roughly a dozen states have some form of pay-transparency law.

‘Job seekers looking for lower-wage and/or in-person jobs are getting more accurate information in job postings than they were a year ago.’


— Indeed Hiring Lab analysis

A report released in January by Revelio Labs, a provider of workforce data, also found some very wide pay ranges, such as these in New York: Société Générale
SCGLY,
+0.99%

was offering $135,000 to $400,000 a year for a senior salesperson, and Netflix Inc.
NFLX,
-1.68%

was offering $165,000 to $470,000 for security operations managers.

That report looked at nearly 90,000 job listings on large companies’ websites since the laws took effect in Colorado and New York City in November, and in California and Washington on Jan. 1. They found that 80% of postings included salary ranges that fell within a reasonable industry-wide range. 

Wide ranges on salaries for job listings is “double-edged sword” for job seekers, said Cory Stahle, the author of the study, and an economist at Indeed Hiring Lab. 

While pay transparency regulations aim to help address gender and racial wage gaps, wider pay ranges make that task more difficult. Posting wider salary ranges may give candidates more room for negotiation, but it requires more work by the candidate to maximize their experience and skills to get the best possible salary. 

“When these ranges are getting wider, they’re getting less precise,” Stahle told MarketWatch. “The wider the range gets, the less good information you have on exactly what people are making within those jobs.”

If the pay range is too wide, it defeats the purpose of pay transparency, Stahle wrote in the analysis. 

Posting wider salary ranges may give candidates more room for negotiation, but it requires more work by the candidate to get the best possible salary. 

During the same period from April 2022 to April 2023, some industries saw their job postings’ pay range narrow, including those for child care and dental, Indeed Hiring Lab found. One theory as to why these are outliers: Employers want to give more exact information to attract workers in competitive industries — that means more precise pay and detailed information on benefits. 

Child-care job postings on Indeed rose by 61.6% from Feb 1, 2020 to May 12, 2023, according to the company’s data. Dental job postings increased by 59.2% over the same period. Meanwhile, tech hiring is on the decline. Postings for software development jobs fell 5.9% from Feb 1, 2020, to May 12, 2023. 

There are some upsides to these findings. A wider pay range could lead to more opportunity for salary negotiation, Stahle said. And that could also be an advantage to people entering the job market. 

Employers could be more willing to hire junior candidates or those with less experience for a lower salary, and “train them up” for roles when they’re having difficulty finding qualified candidates, he added. He cited mid-level or senior-level software developers as one such example where more junior candidates could snag better jobs and salaries.

(Levi Sumagaysay contributed to this report.)

Related: What can I do to improve my salary? Am I being paid fairly? In a strong jobs market, here’s how to push for a pay raise.



This story originally appeared on Marketwatch

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