The Pay‑Range Hack Every Hiring Leader Should Be Using When Posting a Job

A simple tweak in a job posting has surprising effects on who applies and who negotiates.

BY MARIAPAULA GONZALEZ, EDITORIAL INTERN

Illustration: Inc.; Photo: Getty Images

When California passed its pay transparency law in 2023, Tesla listed a senior software engineer position with a salary range of $83,000 to $418,000. At Netflix, the same role was up for grabs at $90,000 to $900,000.

These wide salary gaps aren’t unusual. A recent Harvard Business Review analysis of nearly 10 million U.S. job postings found that while the average salary range spans $38,000, the spread for similar roles at different companies can vary from $20,000 to over $100,000.

Since 2020, pay transparency laws have spread rapidly. As of last year, 15 U.S. states and Washington, D.C., require employers to disclose salary information in job ads or during interviews, aiming to give candidates more information and help close gender and racial pay gaps. But most laws only require a range, leaving the width largely up to the employers’ discretion.

Companies post wide pay ranges for a number of reasons: Roles may span experience levels, remote work can require location adjustments, and bonuses or equity can widen total pay. Under laws like New York City’s salary transparency rule, employers must list a “good faith” estimate of what they’re willing to pay, but regulators haven’t defined a strict limit on how wide that range can be.

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Researchers found that the width of posted salary ranges can shape who applies for jobs and how they negotiate. Across four studies, women were more likely than men to prefer roles with narrower pay ranges. In an analysis of U.S. job postings, wider salary bands were associated with lower female representation, even after controlling for firm characteristics.

The pattern appears linked to risk aversion as wider ranges signal more uncertainty about final pay. Applicants who chose narrower-range roles negotiated less aversively, asking for less money when they countered—about $3,600 less in one experiment. Because starting pay compounds over time, the findings suggest how companies set pay ranges can influence both workforce diversity and long-term earnings.

“Salary ranges act as anchors,” the researchers wrote. “When the posted range is $60,000 to $80,000 and you receive an offer of $70,000, it feels close to the ceiling. When the range is $40,000 to $100,000 and you receive that same $70,000 offer, you can see room above you. That visibility shapes expectations, satisfaction, and willingness to push for more.”

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