The question of whether or not to disclose salaries in job ads is a contentious issue. Traditionally, employers have opted to advertise salaries as ‘dependent upon experience’ as this gives them more flexibility. It also avoids creating competition between their employees or with other organisations in their industry.
However, salary transparency is becoming a preference for applicants. According to a 2018 study conducted for Glassdoor, salary came out as the top factor candidates were looking for job adverts (at 67% of 1,100 respondents.)
Employees have good reason to want clarity over salary expectations. Recent inflation increases mean that the value of wages has been on a steady decline. In many sectors, wages also hadn’t kept pace with inflation in the years prior to these increases.
Breaking with tradition and being transparent over pay could make a big difference when it comes to recruiting. Many sectors are struggling, according to the 2022 Compensation Report by PayScale, with 76% of companies globally experiencing labour shortages in 2021. Companies determined to win the talent war are willing try change tactics and this is gradually changing the recruitment landscape.
Global trends suggests that, eventually, salary transparency in job adverts could become the norm. According to an article by BBC Worklife, a law recently came into effect in Latvia which ‘makes it mandatory to post expected salaries on all job advertisements.’ Colorado is the first US state requiring ‘employers to disclose hourly wages or pay ranges in all employment listings, with fines for not complying between $500 and $10,000.’
Weighing Up the Pros and Cons for your business
Are talent shortages are forcing you to re-think your stance on disclosing salaries? Or are you planning to stick with a traditional approach?
Here we present all the pros and cons so you can make an informed decision on what is best for your business.
Pros
- Candidates want it.
According to LinkedIn research 70% of professionals will want to hear about salary in the first message from a recruiter.
- Candidates will search for this information elsewhere
Review sites like Glassdoor are a popular way for applicants to search for salary data. However, as the information on these sites is unverified and can be posted by anyone, it is not necessarily accurate. If review sites suggest you pay salaries which would be off-putting to candidates, it may be better to publish your range and control what information would-be candidates receive.
- Being transparent about salary ranges gives the right impression.
Pay transparency suggests to candidates that you are an open and honest employer who wants you to have clear expectations about what working there entails. This puts potential employers in a positive light and can help them stand out from the competition.
- Today’s recruitment processes are lengthy and time-consuming for applicants
Recruitment processes are getting longer. Today’s candidates are often expected to go through several rounds of aptitude tests and interviews before receiving a decision, which has made people more selective about which applications they are willing to spend their time on. Most job seekers have a bottom line based on their cost of living and don’t want to risk time on vacancies which might not cover this.
By posting the salary range potential employers are adding value to candidates by making it clear whether pay will be sufficient to meet their needs and whether applying is worthwhile.
- Salary transparency suggests equality is more likely in your workplace
Disclosing salary ranges suggests your organisation is committed to equality and fairness. The recruitment process is an important stage in an employee’s overall experience of your company. Demonstrating fairness and consistency during these stages is shown to boost overall employee morale and lower staff turnover.
It will also make your company more appealing to future applicants, as job review sites allow users to post descriptions of their recruitment process and interview experiences.
- Candidates don’t often leave jobs to be paid at the same level
According to the 2022 Compensation Best Practices Report by PayScale, one of the main reasons employees leave companies is to gain a higher salary. Traditionally, employers have got around this by asking candidates about their current salary. However, as pay freezes have become more common in recent years, offering candidates a minimal rise over what they are already earning is unlikely to prove gratifying.
- Pay transparency is part of a larger trend towards modernising recruitment
For decades, recruitment processes have remained static and followed a traditional approach. However, according to Glassdoor’s More than a Trend? Report many of these approaches now seem outdated, such as applying university degree requirements whatever the role. Employers, particularly in shortage areas like digital skills, have been forced to modernise these requirements in order to attract the right talent. It seems breaking away from tradition over not advertising salaries could be part of this larger trend.
Cons
- The salary may not appeal to the right candidates
One of the main negatives against advertising a salary is it can put candidates off if they consider it to be too low. In reality, if an employer finds the perfect candidate at interview, they will often be open to increasing the package to get the right person on board. However, with complete pay transparency, the candidate may not have applied. Simply stating that pay is negotiable for the right candidate may be a better way to encourage talent to apply.
- Flexibility
Opting to list the salary as ‘depending on experience’ enables the employer to tailor its salary and benefits to a particular candidate. This allows for greater flexibility to adapt to the candidate pool an employer is presented with. If interviews throw up a less experienced employee who shows great potential, the salary offered can allow for the necessary spend on their training. For more experienced candidates who are likely to receive other offers, employers can up the salary to suit.
- High Salaries may encourage the wrong type of applicants
High salary jobs tend to tempt a wider pool of applicants. Among these will be some who apply for a jobs which advertise salaries vastly exceeding what they’re earning, and will exaggerate their actual earnings in order to be taken more seriously.
Advertising high salary ranges on job postings is may also target candidates focused on pay gain rather than the opportunity offered by the post.
However, if employers are unwilling to disclose salary ranges as they feel applicants should be focused on the opportunity a role provides, then clear career progression paths or great training programs should be mentioned in the advertisement.
- Employers want to avoid competition between current and new employees
Each employee brings individual skills and experiences and some employers feel this effects how valuable they are in terms of pay. In these companies, individual employee salaries may vary greatly, even within the same role.
Should such companies switch to posting salary information in job descriptions, current employees could easily view salary information for new hires and that could create a negative culture within the company.
- Employers want to avoid competition with other companies in the industry
Employers are often fearful that competing companies could use salary information included in job adverts to steal candidates by offering them more money.
Stating that candidates who secure an interview will be informed of the salary range could be one way of compromising between meeting applicants’ needs and avoiding competition.
