The case for salary transparency and why it is so crucial in your recruitment strategy.
In recent years, the push for pay transparency has only grown with candidates demanding salary disclosures in job ads and descriptions.
Without salary information, many candidates are reluctant to begin the recruitment process.
A recent study published by Adzuna has shown that 28% of respondents cited a lack of salary details as their biggest frustration, and 33% said they would not attend an interview without knowing the salary. In the same study, it was noted that when organizations withhold salary information, candidates tend to assume that the company has a low pay range, or that the company would underpay them.
Regardless of the benefits, businesses tend to withhold information on that matter because they worry that a job applicant will request the top end of their salary range and disclosing such ranges, they feel they may be creating resentment among their employees by disclosing the pay.
These concerns stem from inexperience with money talk and the fear of facing the hard truth – they might have an unfair compensation structure.
With the new implementation of pay transparency laws in some states in the US, organizations there are forced to reconsider their stance toward the concept. Yet in a recent Job Advert for Netflix in the US, the range quoted for a data engineer was $150,000 – $900,000 – quite a range. This is the new normal in California, yet with that range, the disclosure does not help.
But why is salary transparency becoming such an important subject nowadays?
Essentially, pay transparency promotes openness regarding employee compensation and benefits.
Until now, talking about money and salary was considered somewhat taboo within organizations.
Employees refrained from talking about money for a different set of reasons.
However, such secrecy encourages pay discrimination and disparity, especially towards women, racial and ethnic minority groups.
On the contrary, according to a study published by the Pew Research Center, pay transparency practices have had a positive impact in reducing gender and racial pay disparity.
When more people talk about money, it empowers others to demand fairer wages.
Although it’s a long road to complete pay parity, pay transparency can be part of the solution.
Moreover, salary transparency contributes to creating a win-win environment both for employees and for employers.
This theory supposedly ensures equity if every job applicant can start negotiating under the same expectations.
Employees benefit as they can negotiate fairer wages while employers gain a competitive advantage and a satisfied workforce.
Therefore, mandated or not, it is only wise to be transparent about pay.
It brings in diverse candidates, reduces pay-based discrimination, and promotes employee engagement and satisfaction.
While declaring salary details in job ads, remember to be accurate, concise, and state (using Tesla as an example) that actual offers may vary by “market location, job-related knowledge, skills, and experience.”
For all your recruitment needs, whether you want to explore new strategies or hire the best candidates, Emerald Zebra is always here to assist you.
Feel free to contact us anytime.