We have all been there, browsing our LinkedIn feeds looking to move up the corporate ladder. Imagine this, you narrow your new job search down to two listings; a relatively unknown start-up paying HK$ 1.5 million per year with a string of benefits or a well-known corporation that does not specifically list the salary range and instead, merely lists it as ‘competitive.’ Which would you click on first?
It is safe to assume that significantly more job seekers would be enticed to click on the listing that explicitly states the remuneration package. Yet, according to the Society of Human Resources Management (SHRM), only 12% of job postings across all occupations offered wage information. SHRM further highlights that of those listings, companies in sectors experiencing talent shortages were much more likely to disclose benefit packages in order to entice talent. Historically and even still, companies are reluctant to disclose what is on offer fearing that they will pay more than what a candidate is willing to accept according to SHRM.
Competing with what?
A common grievance amongst job seekers that is often echoed on social media is that a salary listed as competitive, more often than not, will be paying as little as possible and will only be competing with the cost of living rather than the market rate. Correspondingly, candidates are often put through several rounds of interviews only to realise that the benefits offered to them do not match their expectations, leading them to pull out from the recruitment process. This creates friction on both sides, wastes both the job seeker’s and organisation’s time and may prolong filling critical-to-operations vacancies. Though, sites such as Glassdoor and salary.com have made transparency surrounding salary ranges much clearer for potential job seekers and several states in the US have enacted legislation that requires all companies to detail wage and benefit information resulting in a more transparent recruitment process
A point of contention that can lead to talent, especially Millennial and Gen-Z talent, leaving their organisation relates to the lack of transparency around salary and benefits that some businesses have in place—forbidding employees from talking about their salary with their co-workers. It is not illegal for employees to share their salary information with their colleagues and having such a policy in place can lead to increased levels of employee frustrations as they may feel as though they are not being fairly compensated, discriminated against or underpaid.
What is clear is that businesses that do not disclose the salary range may be putting themselves at a disadvantage, not only from a financial perspective but also from a talent and an equality one. LinkedIn’s Global Talent Trends report noted that there were several key benefits amongst organisations that disclosed salary ranges including a streamlined negotiation process, ensuring fair pay and improved efficiency in attracting interested talent. Eliminating taboos associated with talking about money helps organisations win the war on talent and puts them in better alignment with their DEI objectives.
What should be done?
A fear shared by organisations is that if they disclose salary information on job listings, it will result in internal friction if there is a discrepancy between new hires and long-term employees. Long-term, productive talent may choose to walk out the door if they discover that after several years with the company, they are being paid less than a new hire. This could either result in raises across the board or the loss of an otherwise retainable talent—both are costly measures to the organisation. Before increasing transparency, business leaders want to ensure horizontal benefit alignment across levels to minimise the risk of friction.
When disclosing salary information on a job listing, it is best to post the minimum starting wage. This will ensure that only those who deem the wage proportionate to their cost of living will apply and will filter out candidates, who otherwise would have dropped out of the recruitment process at a later stage once they discovered the benefits package.
Alternatively, a certain level of ambiguity is also acceptable. Indicating a range leaves more room for negotiation and ensures that applying candidates’ expectations will be met. Disclosing salary information is also a key trust builder with prospective talent and existing employees as it highlights organisational commitment to equality and fairness. It can help businesses to create a much more diverse and equitable workplace which in turn has its own set of benefits.
Paul Arkwright
Publisher
