Why advertising salary in job ads might be the best benefit all round
If we all had a pound for every time we saw ‘highly competitive salary’ in a job ad, we’d never be looking at job ads.
But here’s the paradox: few job ads include a pay range, let alone a salary. This is not only annoying for candidates, but also backfires on those who are recruiting. It’s a lose-lose situation.
In many countries there are regulations when it comes to publicising salary in job adverts. Worldwide, about 32 countries have policies for pay transparency and the European Parliament approved the directive for pay transparency in March 2023.
The disadvantages of hiding pay
As reward professionals, we’re measured on our pay strategy. The goal is not to hire people for as little money as possible, but instead to find great talent that will contribute to the growth of the company at market pay.
The understanding of market pay is the crucial factor here. In other words, as reward professionals, we need to find skilled people and pay them fairly and competitively.
But hiding pay from job ads further contributes to the gender pay gap and in turn, making it visible could almost be considered transformational.
Women are paid 15-20% less than men on average. When they apply for a job, women often benchmark their current salary and negotiate from there. The problem is, this salary is already below market.
Making salary ranges visible on job ads would help correct these issues and help us in our quest to decrease the gender pay gap.
According to studies in the US (a country that already mandates advertising a pay range), transparency can reduce inequalities by up to 20%.
What is the hidden fear and how to tackle it?
We have an EU directive and huge benefits in terms of the gender pay gap, so why are organisations still fearful when it comes to publicising salary?
Organisations are nervous about publicising salary ranges because they fear competitors might get access to them and provide competitive benchmark data. But most companies have insights into what the market pay in their industry is.
Organisations don’t want their employees to find out. This sounds like the hallmark of an intransparent company, but it’s actually a fact. Employees talk to each other and it’s better for organisations to stay on the front foot of the salary conversation.
Some organisations believe that not publicising pay provides some sort of leverage – something that could be called imaginary negotiating power.
It’s familiar to anyone who have ever had a job interview.
You’re asked the dreaded question: “What are your salary expectations?” Now, if the company has the pay range or salary in their job and this is an easy discussion – you’ll go with whatever is advertised there.
In the case of job adverts that omit the salary, there’s an accepted rule of thumb. The budget for the role may be at 50K and if the the individual being interviewed is currently at 35K, simply by offering 40K everyone wins. The company saves 10K on the budget and the employee feels good because they got a 5K raise. But you are further creating inequalities.
A harmful practice
The practice of hiding the salary damages the process in several different ways.
Candidates scroll through Linkedin and, just by looking at the criteria, may feel they are too senior or too junior and won’t apply because there is no salary range to help them contextualise the job ad.
There may be a situation where you have a candidate, the job ad didn’t advertise the pay, the candidate asks for more, and the two negotiators don’t find each other. This means a suitable candidate is lost in the process, which wouldn't have happened had the company clearly stated the salary in the job advert.
It’s time to change
Even the US, not necessarily the beacon of hope regarding fair working conditions, has already implemented that all job ads must contain a salary range. And the EU just passed a similar law.
Yet again, the UK is not moving along either of those and in not doing so, will decrease its competitiveness on a global scale. We already face a labour shortage. We also need to think in terms of international recruitment and how to become more attractive to encourage a new, talented workforce to join us.
In summary, not showing a salary in a job advert is like removing all the prices from the supermarket because the supermarket potentially could make more money on those tomatoes if they leave the price up for negotiation.
In partnership with HR DataHub
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