Women are less likely to apply for jobs with a huge pay range. Here’s what companies can do about it

New research out of Cornell University indicates that pay transparency laws have not been as effective as intended—in part because many employers fail to truly comply with them.

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Pay transparency laws were supposed to address the pay disparities that tend to impact women and people of color in the workplace. Over the last decade, 15 states have introduced laws that require varying degrees of disclosure from employers—from including explicit salary ranges in job postings to verbally sharing those details with prospective employees during the interview process. 

But new research out of Cornell University indicates that those laws have not been as effective as intended—in part because many employers fail to truly comply with them. 

These laws often do not clearly articulate how broad a salary range should be, and simply instruct companies to provide a “good faith” salary range. (The pay transparency law in New York, for example, states that at the time a job is posted, the range “must be the minimum and maximum annual salary, or hourly rate, the employer believes, in good faith, they are willing to pay.”) As Fast Company has previously reported, this means some employers provide broad salary ranges that technically abide by the law, but are of little use to job applicants. 

Cornell’s findings show that these wide salary bands can have the exact opposite effect than was intended by advocates of pay transparency: Across four studies, researchers saw significant variation in the breadth of salary ranges—and a clear pattern of women preferring jobs with narrower salary bands compared with their male counterparts. So even as pay transparency laws have sought to put all applicants on even footing, women are often discouraged from applying to jobs with wide salary ranges, reinforcing gender-based pay gaps. But it turns out that women face obstacles even when they opt for jobs with narrower ranges. 

“In terms of the implications of this work, those that applied to narrower pay ranges then negotiated less assertively,” says Alice Lee, the new multipart study’s lead author and assistant professor of organizational behavior at Cornell’s School of Industrial and Labor Relations. “If women are sorting into jobs with narrow pay ranges, that is then constraining their likelihood to negotiate assertively for a higher salary—and these policies that are intended to mitigate these gaps might be actually perpetuating these gaps.” 

Lee’s research team conducted a collection of studies to understand the effects of pay transparency laws. In an analysis of nearly 10 million job postings, they found a broad spectrum of pay ranges. Two following studies looked at how applicants responded to different job postings, along with how they negotiated when they started interviewing. A final study tested out a few interventions that the researchers thought might encourage women to apply to jobs with wider ranges.   

There were a few things that did seem to make a difference for female applicants—namely, being more transparent about how compensation was determined in the original job posting. “We just included some clarifying information to the job ads in addition to the pay ranges we provided,” Lee says. “It was just two sentences that informed applicants of the typical starting salary, as well as sort of the qualifications and the system through which pay is determined. … For those that saw the job ad with this clarifying information, women applied just as frequently as men to jobs with wider pay ranges, and we also saw no gender gap in negotiation behavior.”

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