Are you wondering if you should put a salary on your job adverts? Read on to find out the answer.
On 21st December 2022, a bill was introduced that amended New York Labor Law. The amendment now requires covered employers to list salary ranges in job postings and advertisements. Other US states have something similar and Canada is looking to follow suit. Closer to home, although not directly impacting the UK, the EU Commission has proposed a directive for increased pay transparency focused on gender pay equity.
A cursory scroll through LinkedIn will show it’s a topic that is still hotly discussed. You may be forgiven for thinking that due to public sentiment in favour of disclosing salaries on job adverts, that the practice is commonplace with only the most shady and secretive companies still hiding their pay. You would be wrong.
Research from the Adzuna whitepaper “Show me the money: Salary transparency in 2022” highlights that instead of progressing, we are actually moving backwards in terms of advertising salaries on job adverts. The research shows only three in five UK job ads are disclosing salary with the percentage of advertised vacancies including salary slipping to a six-year low.
Compensation is once again (it was number 2 behind flexibility for a while) the top motivator for the UK labour market when considering what they want out of work. So should you include it in your job adverts?
We at Talent Tent want to take a look at the arguments for and against putting the salary on the advert so you can make an informed decision on the question “Should I put a salary on my job advert?”.
Let’s get right to it and open with the arguments for including salaries on job adverts.
It takes seconds to add but can save many hours through a recruitment campaign. There’s a few areas of efficiency I want to take a look at that;
Quality vs Quantity: This goes two ways. Candidates and job seekers can choose to apply to companies that are open and transparent and offer a salary level they need. For the company, disclosing the salary helps in attracting candidates who are serious and see a long-term fit, which is particularly vital if you’re a startup or a smaller company going through growth. It’s not just about filling the vacancy; it’s about attracting the right talent who align with your vision and values.
Time Efficiency: Recruitment processes can be looooong and arduous (more on that later as frankly, they shouldn’t be). By disclosing the salary range upfront, you are likely to reduce the volume of applications from individuals whose salary expectations are outside the advertised range. It won’t necessarily save you time as the evidence shows that application rates actually go up but it will make your time more productive by ensuring that the time you do spend is done so on relevant candidates. It’s a win-win; your team spends time more wisely, and candidates appreciate the transparency which in turn enhances their experience, regardless of the outcome.
Focused Negotiations: When the salary range is known from the get-go, any ensuing negotiations are more focused and less likely to fall apart at the last minute due to mismatched salary expectations. If tracking time to hire is a big one for you, watch this decrease by simply including the salary. It spares a sometimes uncomfortable conversation about money down the line, a point at which both parties have invested significant time and energy. There will still be those that want to negotiate above at the end of the process but the frequency should drastically reduce.
There’s an expectation, a stereotype even, that companies big and small will be shady and secretive with their salaries. Startups and small companies can smash this stereotype right from the get-go by including the salary on the advert. It sets a precedent from the first day a candidate engages with your company and shows you as open and transparent in the areas that matter. It even fosters increased trust by your existing employees as they won’t worry about someone coming in with the same job on a higher or lower salary. Equality and inclusivity becomes a natural byproduct and allows you to address any issues or concerns as they happen.
“We find evidence that pay transparency causes significant increases in both the equity and equality of pay…” (Obloj & Zenger, 2022)
The Influence of Pay Transparency by Tomasz Obloj and Todd R. Zenger, HEC Paris Research Paper, 2022.
Whether it’s through the increased efficiency of your hiring (resulting in quicker times to offer), or the more equitable and inclusive workforce you can shout about, disclosing salary on a job advert will give your company a competitive advantage.
The Adzuna whitepaper has some amazing stats to back this up.
And if that wasn’t enough, here are some highlights from their survey to UK jobseekers.
There are, of course, arguments against disclosing a salary on a job advert. Some can be dependent on the company industry, size or age and some are rooted in outdated information and redundant practices. But, there are some that should be looked at. We are looking at two of the main ones;
Maybe there is no budget for this role. You will pay whatever is needed to get the right person but you don’t want to unnecessarily pay more than you must. By putting a salary on the advert you are committing to a range that might be above market value and therefore costing you more than needed, or alienating experienced candidates that see the range as too low to consider applying.
Both are potentially valid arguments but both can be negated with research. Ideally you will have the role professionally market mapped to ensure your pay range is fair and competitive. But if you’re not there yet, solo research or reaching out to existing networks of people with the titles and skills you will be seeking will help pull information together.
This is perhaps the biggest and potentially most complex reason to not provide a salary on a job advert and it’s an easy one for companies to fall into, especially startups or small businesses going through some growth.
Scenario: You make your first hire. At this point you just need the support in the business so you pay what you can according to the market and secure yourself a great person. Things like career frameworks and salary progression schemes are far from your mind as you will get to them eventually, but for now, it’s about delivery and getting the business stabilised. You go through this same process for your first set of hires. If things go well then there comes a time where you need to hire 2/3/4 of the same title. This is where problems start to enter. The market might have moved on, the business might have some more free cash and so the limitations of your existing salary offer are not the same. You promise to review everyone’s salary but in the meantime, you need to hire. It will be easier with less conflict if you don’t shout about the new salary for the role right now.
Make sense? It’s a really common trap for smaller companies to fall into but it’s also one that makes some larger companies resistant to including a salary due to the complexity of addressing historic pay balances.
It’s often not feasible or practical for early stage businesses to have a pay framework in place. We get it. But committing to open pay practices and fostering an open and transparent culture will mean that pay discussions and amendments can happen at the right time. Even if that means committing to reviewing and checking the pay of existing employees prior to hiring additional members in that team.
There is a growing and prevalent movement on salary disclosures on job adverts. Anecdotally, the majority of companies we work and interact with want to have the information transparently available. But some need to address wider issues (such as rebalancing historic pay issues) before they are able to fully embrace the approach.
When it comes to government backing with active initiatives, the UK is lacking. In March 2022, coinciding with International Women’s Day, the UK government unveiled a pilot scheme urging participating employers to display salary information on job adverts and refrain from inquiring about salary history during recruitment, aiming to address pay disparities and inequality.
However, in June, a shift in approach was indicated by a government minister, stating that pay transparency will be overseen by the newly formed Inclusion at Work Panel, to evaluate the pilot’s efficacy and potential timeline. Additionally, despite plans to review the UK Gender Pay Gap Regulations last year, no evidence of such review exists, representing a lost chance to legislate ethnicity pay gap reporting and wider pay transparency, opting instead for voluntary guidelines, which, judging from past gender pay gap reporting, may lead to minimal voluntary disclosure by businesses.
As of the time of writing, there has been no official public commitment outside of publishing voluntary guidance for employers on ethnicity pay gap reporting.
Meanwhile, the EU is introducing some pretty amazing legislation. Article 5 of the recently adopted pay transparency directive sets out some pretty clear rules for employers. They have a few years to get everything in order but they will need to provide salary information up front.
“Such information shall be provided in a manner such as to ensure an informed and transparent negotiation on pay, such as in a published job vacancy notice, prior to the job interview or otherwise”.
There will also be a ban on asking applicants about their pay history during their current or previous employment. We may no longer follow EU directives but it does represent a progressive approach that UK companies would do well to adopt.
Things are shifting towards more transparency, with salary disclosure at its core. From legislative movements in the US and Canada to directives within the EU, the call for pay transparency is becoming louder. There’s a long way to go (even the New York law has been beset by bad faith characters gaming the system with ridiculous salary ranges) but it’s a distance we are already starting to cover.
Diving deep into the pros and cons of disclosing salaries on job adverts reveals a complex, sometimes messy and yet crucial, discourse. On one hand, salary transparency can lead to a more efficient recruitment process, foster trust, promote equality, and provide a competitive edge. On the other hand, challenges like stifling salary negotiations and flexibility and sparking internal discontent cannot be ignored.
The evidence from the Adzuna whitepaper and the study by Obloj & Zenger (2022) give real, tangible evidence to the benefits of salary disclosure, not only in attracting a better fit of candidates but also in promoting a more equitable and inclusive workplace.
As the debate around salary disclosure evolves, startups and small businesses have the opportunity to be champions of transparency, fairness, and inclusivity. It’s not merely about adhering to a trending topic but about fostering a culture that resonates with both current and prospective employees. Pay transparency is as much about revealing salaries as it is revealing a company’s values and ethos. Startups and small businesses can be at a huge disadvantage when competing with some of the bigger players but by leading with transparency, they will not only compete, but thrive.
Those businesses that are not afraid to be forward-thinking when it comes to their people and how they are treated fuel us at Talent Tent. This exploration into the arguments surrounding salary disclosure on job adverts is a snippet of the larger conversation on pay transparency and equity but to be absolutely clear on where we stand – we are 100% in the camp of open and transparent salaries on job adverts.
What do you think? How has salary transparency impacted your recruitment process? Do you find the benefits outweigh the challenges, or vice versa?
With a topic as nuanced as this, every perspective counts. Whether you’re a startup founder, a seasoned HR professional, or a job seeker, your voice matters in shaping the future of recruitment and workplace culture.
Want to chat more? Scroll down to book in some time or send me an email at luke@talenttent.co.uk.
Footnotes.
