Key Takeaways
- Including salary ranges in job postings attracts 44% more candidates.
- Pay transparency builds a trustworthy employer brand.
- Clear salary expectations reduce hiring time and streamline the hiring process.
If talent acquisition professionals choose not to include salary information in their job postings, they're likely to lose out on quality talent. According to a Gartner survey, nearly half of applicants decide not to apply to jobs when this information is missing.
Pay transparency is swiftly gaining steam nationwide thanks to a push to end pay inequities. Consequently, all hiring professionals should evaluate their philosophies and practices around how and when they tell candidates about compensation.
The Current Landscape of Talent Attraction
Of nearly 3,500 job applicants who participated in the Gartner survey, 44% skipped over jobs that did not contain salary information. This suggests that candidates want to save time by avoiding multiple rounds of interviews, only to realize that the job does not meet their pay expectations.
One reason salary transparency is a growing trend is that many states and local municipalities, including California and New York City, have adopted pay transparency laws. These laws require companies to post salary ranges in job postings or furnish that information upon a candidate's request. To date, nearly a dozen states and municipalities have passed these laws, and even more are considering them.
For many applicants, companies that are upfront about how much they pay for a role are more trustworthy. Pay transparency enhances a company's employer brand—often a sign that the company places a high value on equity and may be less likely to violate anti-discrimination laws regarding pay.
Benefits of Including Salary Ranges in Job Postings
Including a salary range in a job posting comes with its fair share of benefits. In a competitive job market with a persistent labor shortage, it makes all the difference in expanding the applicant pool.
Companies appeal to higher-quality candidates when they include salary information. Many candidates understand that higher salary ranges come with greater expectations around performance and contributions. When hiring professionals post salary ranges, they may be more likely to attract those genuinely interested in the job and have the knowledge and experience to do it.
This, in turn, reduces the time hiring managers spend filtering out unqualified candidates. With the average time to hire at 44 days, pay transparency can go a long way toward streamlining the hiring process and shortening the time it takes to find suitable candidates.
Implementing pay transparency policies significantly enhances an employer's reputation. It fosters a culture of trust and openness with potential hires and current employees, positioning the company as just and fair. Additionally, it allows employees to understand the link between their performance and their compensation, which can lead to increased motivation and engagement.
Common Concerns About Pay Transparency
Though pay transparency has many benefits, it raises concerns for hiring professionals. Some are concerned about being locked into overpaying or underpaying for a position, as it's challenging to adjust the salary range once it's been posted. For this reason, it's critical for hiring professionals to conduct market research to set competitive salary ranges for each role.
Hiring professionals may require assistance in managing communications about internal salary structures. Current employees who have visibility into their colleagues' salaries may question the development of salary ranges and whether they are being compensated fairly.
Talent acquisition professionals must be educated about this topic. Having solid answers to employee concerns helps preserve the employer brand and prevent employee dissatisfaction.
Pay transparency policies also create issues with competitors gaining insight into an employer's salary structures. This increases pressure in an already tight labor market, as other organizations may offer raises to entice employees away from their current jobs.
How to Determine Salary Ranges
Determining salary ranges is a complex process requiring several steps. First, conduct in-depth market research into current salary trends for the open roles. Salary surveys from government agencies and consulting firms, industry benchmarks, competitor job postings, and online tools such as salary databases help with this task.
Next, conduct an internal analysis to audit current pay scales, role expectations, and budget constraints. This helps understand how much the organization can afford to pay for a role and whether the salary is competitive. It also helps reveal and address any existing pay inequities.
Finally, employers should consider geographical variations in the cost of living, market standards, and pay transparency laws. This allows hiring professionals to ensure compliance across the board but also considers the needs of local candidates and ensures the pay is fair and competitive.
Best Practices for Including and Communicating Salary Ranges
How organizations present the pay information matters. Ensuring that salary ranges offered in job postings and other materials are clear, accurate, and honest is essential, otherwise it jeopardizes compliance and trust with candidates and employees.
Additionally, ensure that job roles, responsibilities, and qualifications are comprehensive and clearly defined. This helps candidates make connections between job performance expectations and the pay they'll receive and demonstrates fairness in the salary determination process.
Employers also need to ensure consistency in communication across all internal and external channels. This, too, can affect compliance, especially if a law requires an employer to disclose salary information for internal job postings. Consistent salary information across external channels reduces candidate confusion and promotes trust and transparency.
Pay Transparency Case Studies and Success Stories
Microsoft's Commitment to Pay Equity
Tech giant Microsoft has publicly disclosed equal pay data since 2014 and is committed to not asking candidates about their job salary history. This policy has resulted in tangible improvements toward accountability, pay equity and company diversity.
For example, the total pay for women in the U.S. who work at Microsoft is about 90.3% of the total pay for men. Total pay for racial and ethnic minority groups is about 90.6% of the total pay for white employees. The company expects this gap to decrease amid efforts to increase senior-level representation.
Starbucks Shares Pay Equity Data
Starbucks has remained committed to sharing pay equity data. Since 2008, the company has disclosed pay ranges to candidates when asked—long before there was any law requiring it to do so.
As a result, the company has taken accountability for pay disparities and worked tirelessly toward equity. In 2018, Starbucks announced that it had reached gender and racial pay equity for all employees across the country performing similar work.
Tools and Resources for Salary Benchmarking and Pay Transparency
Use salary benchmarking and market analysis tools to ensure compensation strategies are fair and competitive. For example, ZipRecruiter and Indeed offer regularly updated and detailed salary comparisons in easy-to-understand, downloadable reports.
Additionally, resources from the Bureau of Labor Statistics provides comprehensive labor market data including interactive charts and data visualizations that make understanding trends much more accessible.
AI-driven tools like Payscale.com also provide comprehensive databases for research purposes. Platforms like the Society for Human Resource Management also offers additional training and education for qualified hiring professionals.
Salary Transparency Has Benefits Across the Board
In some cases, salary transparency is the law, and the long-term benefit to employers is reduced compliance risk. However, this practice provides advantages beyond simply meeting government rules and regulations. Pay transparency helps build a solid employer brand based on trust, making the company more attractive to quality talent.
Recruitment marketing professionals should consider including salary ranges in job postings. As seen with major companies like Starbucks and Microsoft, this transparency can positively impact hiring and company culture.
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Embracing salary transparency is not just a trend; it’s a strategic move that significantly enhances your employer brand and attract quality talent. By being open about compensation, you foster trust, streamline the hiring process, and create a more equitable workplace. As the landscape of talent attraction continues to evolve, staying ahead with best practices like these will ensure your organization remains competitive and appealing to job seekers.
Are you ready to leverage a recruitment marketing solution that can make all the difference? The team at Recruitics is here to help you implement these strategies to create a more robust talent pipeline and a stronger, transparent organizational culture.
