Struggling to recruit? How being transparent is key
Recruitment problems are at a record high. British Chambers of Commerce figures showed 79% of firms were struggling to fill roles earlier this year. Despite offering higher salaries, some organisations simply aren’t getting the candidates they seek.
For the first time in 50 years, the UK has more job vacancies than unemployed people. What’s changed?
During the pandemic, many people left the workforce – either voluntarily or due to redundancy. Those working remotely spent more time at home with their families. And they started to re-evaluate their priorities: what they want to do and who they want to work for.
This led to a lot of people seeking out different, more fulfilling careers. And perhaps most importantly, careers that would allow them to continue working from home post-pandemic – at least on a hybrid basis.
According to surveys from 2021, firms that don’t offer regular work-from-home days risk losing more than 40% of their employees.
The freedom to work from home is important to many groups. Parents, for example, can spend more time with their children, with the flexibility to drop them off and pick them up from school. Beyond that, allowing employees to work remotely sends a message: they are trusted to work productively in a way that suits them.
Building a culture of trust through pay transparency
For Generation Y and Z employees – most of today’s workforce – an environment based on trust, fairness and transparency is critical. When jobs are advertised without publishing a salary range, already information is being withheld. The advertiser is not being transparent. And candidates know it.
For organisations struggling to recruit, one of the simplest things they can do is publish pay ranges alongside job adverts. This might mean doing some work internally to make sure policies and processes are fair. Otherwise, they risk creating friction among existing employees.
Start by defining your reward strategy and principles. In the same way that HR has a set of values that define your company culture, you also need a set of reward principles that define your approach to pay. This is step one on the road to more fairness and transparency.
Next, define your approach to career progression. Show employees how their career will progress if they stay. Lack of career progression is one of the main reasons people seek opportunities elsewhere.
Next, establish a set of pay ranges that ensure 1) you are competitive against the external market and 2) you have internal equity. Candidates expect equal pay for equal work, which again, feeds into fairness and transparency.
Finally, you need to define your pay progression policy. So people understand how their pay will progress as they develop in the role and gain more knowledge, skills and experience.
Fairness matters more than money
Compensation analysis company Payscale conducted research into the link between pay transparency and job satisfaction. The study found that fairness and transparency in the pay process has 5.4 times more impact than how employees are paid relative to the market. It also found that even if they were paid below market rate, they were more likely to feel satisfied with their job if the reasoning was clear.
Leaders have access to all of the information needed to make pay decisions. They shouldn’t feel their employees can’t handle the truth. When context is given, the outcome is clear. People feel more engaged, more satisfied – and less suspicious about what their colleagues earn.
Recruitment is only going to become more challenging, so make transparency a priority. The proportion of Generation Y and Z employees that make up the workforce is growing – and they expect more from their employers.
In partnership with 3R Strategy
Independent Pay & Reward Consultancy