Pay Transparency Laws Are Changing the World of Recruiting
Happy Friday and welcome back to the Recruitonomics Newsletter! Today, we’re spotlighting the latest research on salary transparency laws. 💸 These laws are transforming the future of recruiting in real time – but how exactly? Read on to find out!
Powered by Appcast, Recruitonomics.com is a hub for data-driven research that aims to make sense of our evolving world of work. Combining labor economics and recruitment best practices, Recruitonomics is constantly releasing new data and insights to bring clarity to the chaos of a changing economic landscape.
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The Latest Insights on Pay Transparency:
Recently, the newest salary transparency law went into effect in New York City. Employers now have to include a “good-faith” pay range in every job posting in the city. NYC joins other cities and states, such as Colorado and California, that have successfully passed pay transparency laws in hopes of decreasing pay inequity.
Earlier research from Recruitonomics on Colorado’s Pay Transparency law found that the implementation decreased postings, but increased the labor force participation rate compared to a neighboring state, Utah. In other words, recruiters willing to post salary ranges actually faced less competition.
As it turns out, that’s not the only way salary transparency is transforming the world of recruiting.
🔍 It Pays to Be Transparent
What’s the actual effect on talent acquisition professionals? How does the inclusion of compensation affect the online job board market? As it turns out, job seekers are interested in how much a job will pay them! Including pay information in the job title lowered cost-per-click by 35% in September.
Breaking it down by industry highlights the effect: in September, the cost-per-click for employers in healthcare that included pay in the job title was 52% lower than those who did not.
A geographic breakdown confirms the trend: every state but two experienced lower average CPCs on posts that include pay information.
It’s not rocket science – pay is the most important factor in a job search, so taking the guesswork out of the application process will make a posting more attractive to potential candidates.
What does this mean for recruiters?
Just like the title says: It pays to be transparent. Every job opening already has a potential pay range – including it in a job posting is a small extra step that can decrease key recruitment costs! Of course, there are other things to consider beyond costs-per-click. But, at the end of the day, this emerging trend is good for both job seekers and recruiters.
This Week on Recruitonomics:
📱The Invisible Tech Layoffs
The past few weeks have been difficult for the tech sector. Major tech companies, including Twitter and Meta, have announced layoffs. After a pandemic-driven tech employment boom, executives (both old and new) of these tech giants have been spooked by tightening monetary policy, rising inflation, and more offline consumers. These layoffs, however, have yet to show up in the numbers: tech employment rose by 4,000 in October, and layoffs aren’t expected to increase initial unemployment claims anytime soon. Perhaps still-high demand is allowing for some of these workers to find jobs quickly and skirt the need for unemployment filings.
For more information on trends in the tech sector, download our Technology Labor Market Snapshot.
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What does this mean for recruiters?
These tech layoffs may be a bit shocking. It’s tempting to read into them and see a worsening labor market, but it’s important to remember that these well-known companies do not make up the entire tech sector, much less the larger labor market.
Recruiting Tips:
How can you best plan a job advertising budget? Appcast can help!
Work backwards from your hiring goals and utilize your application-to-hire ratio (i.e. how many applications does it take for you to make one hire?). If you need, say, 50 hires and it takes 10 applications to make one hire, then you need 500 applications to generate those 50 hires. Then, utilize Appcast’s cost-per-application (CPA) data to discover the full budget. If the CPA for your industry and area is $25, you know you need 500 applications at $25 per application in order to make 50 hires. In other words, your informed budget is $12,500!
For more information, check out our blog post How to Plan Your Job Advertising Budget!
Recently on Recruitonomics:
Inflation may have finally turned a corner in October. Price growth slowed considerably – now up 7.7% from the year before. This is still uncomfortably high, but it’s an encouraging reversal that will hopefully continue into 2023. More encouragingly, core inflation (stripped of volatile food and energy costs) ticked down from a decades-long high last month – a comforting shift for both the Federal Reserve and consumers dealing with ballooned prices. The shelter index – which made up a large portion of the monthly increase – continued to climb in October. But, according to private indexes, rent prices are actually declining. Because of lease lengths, it may take some time to show up in these public estimates. All in all, this was an encouraging report that showed considerable cooling that will hopefully continue into the next year.
Read the full article here.
The retail sector is showing signs of slowing. October’s (seasonally adjusted) employment gains were tepid in comparison to monthly averages this year and last and openings are coming down. However, layoffs are not rising – but that doesn’t mean the sector isn’t trimming its workforce. Because of the historically high rates of turnover, retail employers are not forced to engage in layoffs to shrink their workforces. Instead, they can simply cut back on hiring as workers leave. The quits rate remains high in the sector, and the hires rate has come down from recent highs – retailers’ demand for labor is shrinking.
Read the full article here.
What Recruitonomics is Reading:
“The Great Resignation” has been thrown around in the media a lot during the past two years, but did it actually happen? Vincent Amanor-Boadu at the Bureau of Labor Statistics found an answer to just that: was the level of quits during the pandemic period actually higher than during other economic downturns, specifically the Great Recession and the dot-com recession?
Amanor-Boadu found that the pandemic period (March 2020-January 2022) produced “unique quits rates” that were not only far above the levels seen in the aforementioned recessions, but also a forecast of the quits rate based on historical trends. In other words, the “Great Resignation” was not just a media-created phenomenon, but actually occurred. A record number of workers left their positions in search of better opportunities during the pandemic.
For more information, read “Empirical Evidence for the ‘Great Resignation'" from the Monthly Labor Review by the BLS.
More Data & Insights:
Thank you for reading! Stay tuned for next week's Recruitonomics Newsletter and check out Recruitonomics.com for more data-driven insights.