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Salary Ranges: The Most Important Tool for Leaders & Employees

| Jun 28, 2022 9:20:48 AM | By

Today, OpenComp announced the public release of Range Builder, an AI-powered application that radically transforms not only how businesses plan their financial future, but also how they build an equitable workplace that fosters trust and transparency with employees and candidates. In just three clicks, OpenComp’s Range Builder produces enterprise-grade pay ranges that reflect an organization’s business strategy, values, and vision in minutes, not months. The best part is, as of today, companies can start building ranges for free.

While you can learn more about Range Builder here, this blog explores how salary bands address the top priorities of high-performance organizations — extending runway, increasing retention, meeting new pay transparency regulations, and advancing meaningful DEI practices to close pay gaps.


What are pay ranges & why do they matter?

Salary bands are the most important tool that businesses can use to advance the interests of their organizations, employees, and communities today. They define the minimum to maximum that someone makes for a particular job, including total cash, equity, and bonus.

When salary bands aren’t reliable

Lots of organizations say they’ve created ranges, but they’ve simply selected the amount that they want to pay for a job and built a range around it.

A pay range is not a sliding scale. Unless pay ranges aggregate like-for-like jobs, they are inaccurate and actually perpetuate the very pay inconsistency that they seek to solve. Sliding scale salary bands will never pass a compliance test at the state or local level.

Pay ranges also are not reliable if they are based on employee-reported data or data that’s more than a quarter old. Think about how much has shifted in the economy and market in just the last month. Don’t be fooled.

Pay ranges: eliminating bias, discrimination, and power imbalances

It’s no secret that pay gaps and bias still plague the workforce.

People of color, women, LGBTQ+ and people with disabilities still aren’t paid equally. While the average female professional earns $0.83 to every $1 earned by white, non-Hispanic men, LGBTQ+ workers earn $0.90 to the same $1 versus working hispanic and black women who earn $0.57 and $0.64, respectively.

Recruiting pools remain homogenous, and bias tarnishes the hiring process in job descriptions, resume reviews, and more — further contributing to inequity. Unconscious and implicit bias also riddle company culture via public accolades, available opportunities, and promotions.


Employees have had enough, and legislators are stepping in.

Two of every three employees are searching for new work, and the top reasons include compensation, lack of opportunity, and disrespect. This attrition increasingly threatens businesses that must rely on existing workforces while non-critical hires are paused.

While most employees desire some form of pay transparency, and 13 states and localities have introduced new pay transparency laws, research shows that only 32% of high-growth companies share salary ranges during the interview process.

Leading employers are getting out in front of this issue now. Many businesses with remote teams are already impacted, and others want to avoid experiencing major disruptions when pay range laws hit their corner of the country.

What is at the core of these issues? The New York State Senate Bill answers this question best: “Because salary decisions are made in the dark, implicit or overt biases continue to shape hiring and salary setting decisions, artificially depressing wages for women and people of color. Meanwhile, lower-wage workers, including those most impacted by the COVID -19 pandemic, lack the information and leverage needed to negotiate fair salaries to escape these discriminatory practices.”


Salary ranges create equitable workplaces

By assigning shared ranges to particular roles, salary ranges eliminate wage inequality and discrimination. When shared in job posts, they put the same information in employers’ and employees’ hands, leveling power imbalances and abolishing pay secrecy. When built on accurate, relevant compensation data, pay ranges also empower businesses to model different headcount scenarios and confidently plan a data-driven path forward.


Salary bands: Redefining the entire people pipeline — and how businesses address their largest source of spend

Pay ranges are the single-most important mechanism to advance pay transparency and smarter business today, especially in light of the economic downturn.

Pay ranges reinvent the entire people pipeline.

Salary ranges reduce discriminatory wage-setting and hiring practices and help level the playing field for our most vulnerable workers by empowering companies to disclose compensation information at the start of the hiring process, as well as during merit cycles and promotions. They also give workers critical access to the same information as their employers.

Once automated, salary bands also greatly benefit employers by simplifying compensation decisions and improving recruitment and retention. Attrition decreases 87% when employees trust their employers’ DEI commitments.


Pay ranges reimagine how businesses operate.

As markets and venture funding dramatically slow, and top-tier investors warned portfolio companies to plan as if they won’t raise more funds for 24-36 months, business leaders are scrambling to extend runway with cash conservation and revenue acceleration strategies. More than 19,000 U.S. tech workers and 35,000 tech professionals worldwide have been laid off in 2022 alone, from companies ranging from Coinbase and Tesla to StitchFix and Redfin have introduced workforce and salary reductions.

Salary ranges significantly inform a business’ headcount plan — which is a substantial part of its financial plan because headcount is such a large portion of corporate spend. When automated, companies dramatically improve operational efficiency and effectiveness, spending minutes instead of months on what used to be deeply manual, error-prone calculations. As a result, they can quickly model headcount scenarios, make data-driven plans for the future, and set clearer and more predictable budgets.

Pay ranges are businesses’ ticket to scalable growth.


Salary ranges: the future of smarter business

Pay range instrumentation cannot be about digitizing analog processes or reskinning existing standard operating procedures. Instead, a disruptive approach to delivering salary ranges must reinvest the flow of work. Instead of stale, employee-reported data, compensation data that feeds pay ranges must be automatically mapped and normalized from employer Human Resource Information Systems (HRIS) in real-time. They must fuel radically quicker business decisions, in seconds instead of months.

This is what OpenComp has done with Range Builder — and will do with other exciting news soon to come. It is a delight and honor to completely disrupt and redefine pay transparency, equality, talent interaction, and good business. Sign up for free access today.




Thanh Nguyen is CEO & Co-founder at OpenComp. A serial entrepreneur and former member of the founding HR team at, Thanh writes about topics including startup compensation, company growth strategies, the future of work, and hybrid work for publications including TechCrunch and Forbes. Connect with him on LinkedIn here.