What is salary transparency?
Salary transparency involves openly sharing information about compensation with both current employees and potential candidates, such as in job postings.
Certain companies, like Buffer, opt to publicly disclose all their salary data, so anyone can view what job title lines up with what compensation.
Other organisations establish a culture that encourages open discussions about pay and finances, making it a natural and essential part of conversations, whether in a job ad or internal performance reviews. This is in an effort to ensure there’s no uncomfortable taboo surrounding salary discussions in such companies.
Pros of Including Salary Range in a Job Posting
It saves everyone time
Adzuna estimates candidates see about 14 million hours go to waste every year applying for roles that aren’t suitable for them, and over half of job seekers have outright declined a job once they found out the budgeted salary in the later recruitment stages.
Therefore, it stands to reason that it’s in the best interest of both candidate experience and an organisation’s resources to simply cut to the chase in the job posting. No hiring manager wants to waste time going through the hiring process with a job seeker who is not interested in the salary range on offer. By employing salary transparency into your hiring practices, you can ensure that every candidate in your recruitment process is content with the pay range available.
Pay transparency supports DE&I
Fostering a culture which encourages transparent communication is key for DE&I policies or initiatives to be effective.
Being transparent about you salary range in job adverts allows HR, recruitment, and current employees to see what people are, or should be, being paid. This can allow issues in unequal compensation, such as in relation to the gender pay gap, to be addressed.
Additionally, if you want to attract diverse candidates, you need to offer fair compensation. If the role you have created a job ad for is based out of London for example, a city known for it’s high cost of living, but you are offering a salary on the lower end of the scale, you by default make the role unrealistic for people to apply to who don’t have the resources, such as other streams of financial support.
Therefore, pay transparency can play a larger role in the attracting diverse candidates, and the overall inclusivity of your workforce than you may initially think.
compensation is a top priority for talent
Average real terms pay in Britain fell at among the fastest rates for more than two decades in 2022, and according to Adobe’s survey, 70% of young job seekers say they are worried about a potential recession.
The cost of living crisis in the UK has prompted many job seekers to prioritise salary growth in their search for financial stability and security. With the rising costs of housing, utilities, food, and other essential expenses, individuals are seeking positions that offer competitive compensation to meet their basic needs and maintain a decent standard of living.
As the cost of living continues to outpace wage growth, job seekers are compelled to prioritise higher salaries to ensure they can adequately support themselves and their families, save for the future, and navigate the economic challenges posed by the crisis. In this challenging economic landscape, securing a well-paying job has become a crucial factor in achieving financial resilience and alleviating the burden imposed by the escalating cost of living in the country.
It lends to your employer brand
Transparency reflects positively on employer – that much is obvious.
When an organisation openly communicates with its employees and candidates about its policies, values, and practices, it builds trust and credibility. This fosters a positive reputation in the job market, attracting top talent who are drawn to a company that is honest and forthright. Candidates are more likely to perceive transparent companies as fair and respectful, making them more eager to be a part of such a work environment. Additionally, transparency demonstrates a commitment to employee wellbeing and inclusivity, enhancing the company’s appeal as a desirable employer.
Furthermore, transparent companies tend to have higher employee satisfaction and engagement levels. When employees feel that their employer is open and honest, they are more likely to feel valued and appreciated. This, in turn, can help build a sense of loyalty and dedication to the organisation, resulting in reduced turnover rates.
Happy and engaged employees are also more likely to become brand advocates, promoting the company positively through word-of-mouth and social media. As the positive experiences of employees are shared, the employer brand gains credibility and attracts even more top talent, creating a cycle of success and growth for the company.
Cons of Including Salary Range in a Job Posting
could set unrealistic expectations for job seekers
Organisations are sometimes apprehensive about mentioning a salary range because they fear that all candidates will anticipate being offered the figure at the higher end, irrespective of their expertise and qualifications. In reality, compensation within a salary range is contingent on various factors such as skills, qualifications, experience, and expertise, among others. The higher end of the pay scale is typically reserved for exceptional candidates who bring significant value.
However, when salary information becomes public, candidates might feel disheartened if they receive an offer that falls below the highest possible range. This feeling of being undercut could lead a candidate to reject the opportunity altogether. Even if they accept the offer, they may still harbor the belief that they settled for less, which can have a cascading impact on their candidate experience, and later their productivity, engagement, and mental wellbeing.
However, assessing what other compensation can be offered to candidates who may fall into this category, such as through your benefits package and culture, can help alleviate this issue.
It might give competition an advantage
When you decide to reveal a salary range, some companies become concerned about inadvertently providing valuable information to competitors. This insight into your company’s offerings can aid them in their own recruiting endeavors. By slightly surpassing your salary range, a competitor might entice potential candidates away from your organisation, especially if your range is on the lower side.
Another concern is that when you make compensation public, it becomes easier for the competition to poach your employees, posing a retention issue, on top of the talent attraction problem. Armed with this information, they could effectively compete for the best candidates and potentially win them over. Therefore, some believe that maintaining confidentiality around compensation protects the employer and allows for greater discretion in handling these matters.
This is where an employer branding strategy can become remarkably useful in terms of offering compensation and value beyond salary.
Existing employees might feel slighted
Another prevalent reason for avoiding upfront salary disclosure is the potential for fostering jealousy and discontentment among current employees. If existing employees discover that new hires are starting with higher salaries, it can lead to feelings of being undervalued.
Companies carefully assess multiple factors when determining individual salaries for their employees. Keeping this salary information private enables organisations to handle it with sensitivity. However, if employees become aware that some of their colleagues are earning more, it can negatively impact teamwork and overall cohesion within the company.
However, as long as a business is not acting unethically, such as by paying certain demographics more than others, or replicating Kimberly Nguyen’s viral story, then this point has some nuance to it. Any business should be compensating each employee fairly for their contributions, so if this ethos is being followed, then it stands to reason that the salaries advertised with job postings should be reasonably justified.
So, is including salary range in job posting the right call, or not?
Salary transparency in job posts serves as a powerful tool in fostering trust, attracting top talent, and promoting a fair and inclusive workplace. By openly communicating salary information in job listings, companies demonstrate a commitment to transparency, which resonates positively with both current employees and potential candidates.
Salary transparency in job adverts not only helps candidates make informed decisions about whether a position aligns with their financial expectations, but it also eliminates unnecessary guesswork and ensures that individuals apply for roles that suit their qualifications and salary preferences. This, in turn, streamlines the recruitment process, saving valuable time and resources for both employers and job seekers.
Moreover, salary transparency plays a significant role in combating wage disparities and promoting pay equity. When companies openly disclose salary ranges, they create a level playing field, reducing the likelihood of pay discrimination and ensuring that employees are compensated fairly based on their skills, qualifications, and experience.
Though this can open valuable information up to competitors for when they advertise the same job role, hitting the right notes in your own overall recruitment marketing and candidate experience strategy will help you attract and retain the talent meant for you.
Beyond the immediate benefits, salary transparency contributes to a positive employer brand. Candidates are more likely to be drawn to companies that value honesty and openness, perceiving them as trustworthy and respectful employers. A transparent approach not only attracts high-caliber talent but also fosters higher levels of employee satisfaction and engagement, leading to a more motivated and productive workforce.
In a competitive job market, salary transparency can set a company apart from its peers, positioning it as a desirable employer of choice. By embracing salary transparency in job ads, companies showcase their commitment to creating a fair and inclusive work environment, where employees are valued and respected for their contributions. Ultimately, salary transparency serves as a catalyst for building a strong and positive employer brand that resonates with top talent and drives long-term organizational success.
