There’s no surprise in saying that transparency is key when it comes to attracting the top talents. One of the most effective ways to build trust with candidates is through salary transparency i.e openly sharing compensation details in your job posts.
Although there are benefits to mentioning the salary range it isn’t without its challenges. You need to consider both the benefits and the challenges that come along with it to evaluate whether you should mention it or not. So to evaluate whether you should include salary ranges in your job description, let’s explore both sides.
What is Salary Transparency?
Salary transparency refers to disclosing information about compensation, pay ranges and the factors that influence them.
In the past discussing salary was considered somewhat of a taboo. Today growing conversations around equity are causing organizations to embrace pay transparency.
With that being said, transparency doesn’t always mean revealing the exact pay it may take different forms:
Full Transparency
Sharing the exact amount of the salary.
Partial Transparency:
Sharing a salary range and mentioning the factors like experience, location, or skill that may cause fluctuation in it.
Pros of Sharing Salary Ranges
There are various advantages to sharing the salary to both the employers and the employees. Here are 7 pros of mentioning salary range:
1. Attracts the Right Candidates
When you mention the salary range only the candidates who know what to expect will apply. This also positions you as a transparent company and helps to build trust with the candidates. In addition to this it reduces the number of unqualified or uninterested applicants.
2. Builds Trust and Transparency
Disclosing salary lets the candidates know that your company operates in an honest and transparent manner. It reinforces pay equity and builds trust with candidates who care about fair and inclusive workplaces.
3. Improves Efficiency
Most people who might have issues with the salary you disclosed are very unlikely to apply which helps you focus on quality over quantity. Moreover it also helps jobseekers evaluate if the job is right for them or not which helps save time for both you and the interested candidates.
4. Strengthens Employer Brand Authenticity
Employers who mention salary range are often seen as progressive and trustworthy. The candidates are more likely to speak positively about your organization. Furthermore, the consistency between values and behavior builds authenticity in your brand.
5. Encourages Honest Internal Conversations
When there is a clearly defined salary range the managers and HR can discuss pay decisions more openly. This also encourages the staff to have honest conversations about promotions, raises, or career growth.
6. Decreases “Ghosting” After Interviews
By sharing a clear pay range beforehand the candidates self select the role that fits their needs. Applicants know if the role meets their financial needs which implies that only genuinely interested candidates engage fully.
7. Reinforces a Transparent Company Culture
Seeing the people in leadership practicing openness creates a culture where information is shared rather than hidden. Employees are likely to trust that promotions, raises and pay adjustments are fair which strengthens belief in merit based transparent culture.
Cons of Sharing Salary Ranges
Mentioning a salary range does help you attract better candidates but it isn’t without its challenges. Some of the disadvantages of disclosing salary are given below:
1. Reduces Flexibility for Exceptional Hires
When you provide a salary range exceptional hires may think that the top of your range is the maximum they can get. They may reject the role if the compensation doesn’t match their value;.
2. Competitive Disadvantage
Once you mention the salary range your competitors can see what exactly you’re willing to pay. This may make them offer slightly more to attract the candidates. Not to mention this also gives insight as to your company’s budget.
3. Complicates Cross-Functional Parity
If you publish a salary range for one department but not for another then the employees may mention that the ranges must be similar across all departments which is not always true. A range that works for one function may be too high or too low for another.
4. Makes Talent Retention Harder
Disclosing salary range may cause internal comparisons and resentment. Similarly if employees see a maximum in the range they may assume that's the maximum they can earn reducing motivation to stay long-term.
5. Limits Confidentiality in Strategic Roles
Strategic roles often involve critical business decisions and strategies. This may cause competitors to get insight on how much your company values these roles.
6. Attracts unwanted applicants
While disclosing salary is a good way to attract candidates whose financial goals match the particular position it may also welcome unwanted applications. Many people may apply for the position with irrelevant applications just because of the numbers.
7. Encourages “Salary-Driven Job Hopping”
When you mention the salary range the candidates may prioritize the top of the range instead of evaluating career growth and responsibilities. It also reduces loyalty and long term engagement as they may perceive the pay as transactional rather than tied to career development.
Mentioning the salary range may prove to be advantageous or disadvantageous according to your needs and the position you are hiring for. Make sure to carefully evaluate both the advantages and the disadvantages before disclosing the salary range.
