Salary Transparency in Job Ads: The Pros and Cons

May 17, 2024
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The whole point of a job description is to tell candidates what they can expect from a role. 

And we’re not just talking about the practicalities: a good job ad should also showcase your organisation’s culture and values so candidates can start to form a realistic picture of what working for your company would be like. 

But let’s be honest: people work to make money. So it’s only natural that candidates want to know how much they’ll be paid for a role if they land it. 

And they do want to know: according to a 2022 LinkedIn survey, 91% of candidates say that seeing the salary range on a job posts affects their decision to apply for a job. 

Despite this, a 2023 survey found that only half of UK companies include salary information in all of their job ads. Other surveys find that the situation is similar in the US and France.

So, what’s holding employers back? In this article, we’ll discuss the pros and cons of including salary in your job descriptions — plus how the EU pay transparency directive will affect things. 

Why including salary info in your job descriptions might not be a good idea 

Before we dive into the pros and cons, it’s only fair to come out and say it: we’re big fans of pay transparency here at Figures. In fact, it’s kind of our whole deal

So it should come as no surprise that we believe including salary information in your job descriptions is the fair and ethical thing to do. 

That said, there are some legitimate reasons to be concerned about disclosing salary information early in the recruitment process — we’ll address a few of them below.  

Could put off candidates from applying 

Here’s a fact: if you include a salary in your job description, some candidates won’t apply because of that salary. This isn’t necessarily a bad thing — we’ll discuss that a bit more later on. 

When it is a problem is when candidates are using search filters to look for suitable roles. Because if the salary you’ve listed is even slightly outside of the range they’ve chosen, they won’t see your ad at all. 

And this becomes an even bigger issue when companies aren’t 100% sure what they’re looking for in a candidate. In the startup world in particular, it’s not uncommon to advertise for a junior position, but be open to hiring someone more experienced (at a higher salary) if the right person comes along. 

The solution? First of all, it’s important to nail down the particulars of each role as precisely as possible before you start the search. Then, ensure you attract as many suitable candidates as possible by including an (honest) salary range in your job descriptions instead of an exact number. 

Puts the focus on salary alone

Salary is only one part of an employee’s compensation package. 

And, while small startups usually can’t compete with tech giants on salary, they may be able to make up (some of) the difference with things like benefits, perks, equity and even a strong company culture. Because of this, some employers worry that including salary information in their job ads will prevent candidates from seeing the bigger picture. 

The first thing to do here is to work on your job descriptions to ensure they’re getting across your company culture, benefits and more. 

But if you’re really worried that your salaries will put off candidates? It may be time to have an honest conversation about how fair they really are. After all, perks and culture will only get you so far if your salaries are way below market. 

Candidates might expect to be paid at the top of the range

Many companies choose to share a salary range in their job ads instead of an exact figure. And this makes sense: in many cases, the final offer will depend on the candidate’s skills, qualifications and experience. 

However, some employers worry that candidates will expect to be paid at the top end of the range they see in the job description, even if their background doesn’t merit this. 

There’s really only one way to combat this: build a fair, consistent and robust system for determining how much each employee gets paid — and be clear with candidates about what factors will go into the decision. 

Might cause resentment with existing employees

There’s no getting away from it: if you include salary information in your job descriptions, your current employees will see this information too. 

And many employers worry that this will cause resentment and problems with employee relations — especially if the salaries you’re advertising are more than what your current employees are getting paid. 

Of course, this isn’t so much an issue with salary transparency as it is with overall pay fairness. And you can avoid the problem by conducting regular compensation reviews that ensure pay stays fair and competitive for everyone — not just new hires. 

The case for pay transparency in job ads

As we’ve mentioned, we’re big fans of salary transparency at Figures. So it’s hardly surprising that we think including salary information in your job descriptions is the fair thing to do. 

But don’t take our word for it — here are some of the top reasons to consider being more transparent about pay. 

Demonstrates a commitment to fair and equitable pay 

Including salary information in your job descriptions sends a clear message to candidates: that you care about paying them fairly. This begins building trust with employees from day one, and helps to position your organisation as a fair and ethical employer. 

Because here’s the thing: even if you don’t share this information, candidates might still be able to find it. Sites like Glassdoor and Indeed (not to mention social media) have made this easier than ever. Giving candidates the information they need instead of making them search for it shows that you respect them and their time. 

Avoids wasting everyone’s time when expectations aren’t aligned

One of the biggest so-called disadvantages of including salary info in your job ads is that it might put qualified candidates off from applying. But… is this really a bad thing? 

Because one way or another, you’re going to have to name a figure at some stage during the recruitment process. And if that number was out of line with their expectations at the beginning of the process, that will still be the case at the end. 

The only difference? Now you’ve both wasted hours of your time on applications, interviews and tests… for a position the candidate was never going to accept. Isn’t it better to cut out those candidates you can’t afford at the beginning of the process and avoid all of that extra time and expense? 

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Facilitates fair negotiation 

Traditionally, employers have had the upper hand when it comes to negotiating on salary. After all, companies almost always know how much they’re willing to pay for a role, even if they don’t share this information with candidates.

They may also have access to information about the candidate’s past salaries, which they can use as a basis for their negotiations. Often, this results in the candidate being offered a lower salary purely because they were underpaid in their last position — which isn’t even close to fair. 

Including salary information in the job description levels the playing field by giving candidates the information they need for a fair negotiation. That means employers aren’t able to lowball them or use their past salaries against them. 

Enhances diversity, equity and inclusion 

Improving diversity, equity and inclusion is one of the key challenges facing HR and recruitment professionals in 2024. And, believe it or not, including salary information in your job descriptions can be a big part of this. 

Here’s why: providing this information upfront demonstrates your commitment to fairness and equity. It shows candidates from diverse backgrounds that you care about treating them fairly. And it can mitigate pay gaps that exist due to unconscious bias or historical disparities in pay.  

Reduces turnover and improves job satisfaction

Look at it this way: would you rather work for a company that was open, honest and fair in its pay policy… or one that kept you in the dark? These days, most candidates are looking for the former. 

When candidates don’t know what they’ll be paid for a job until the end of the recruitment process, there’s a chance they’ll be disappointed. 

On the other hand, if they know what to expect from day one, they’re much more likely to be satisfied with their role once they get started. Over time, this can help to build a culture of increased employee engagement and high job satisfaction — and even decrease turnover.

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Understanding the impact of the EU pay transparency directive

Ready for a newsflash? If your company is based in the EU, this conversation is probably about to become irrelevant. 

That’s because the new EU pay transparency directive will make it a requirement for companies to disclose salary information to candidates before the interview stage. In practice, that usually means including this info in your job ads. 

Of course, there will still be decisions to be made — like whether to share an exact salary or a range (and how wide you want that range to be). 

Plus, the directive is currently being rolled out across EU member states, which have until 2026 to transpose it into national law. That means that there’s a big opportunity to stand out from the crowd by getting ahead of the curve and adding salary information to your job ads now

The bigger picture: Fair, transparent compensation 

Here’s the thing: most of the supposed issues with salary transparency in job ads are actually caused by unfair pay practices — whether intentional or not. 

For example, salary compression can be avoided if you conduct fair, regular compensation reviews to bring everyone’s pay in line with the market. And the idea that candidates will be put off applying if they see a salary in the job description is only an issue if that salary is too low to begin with. 

The fact is, if you want to attract and retain the best employees in 2024, you need to know your salaries are fair — and we can help. 

Our salary benchmarking tool gives you access to real-time, accurate market data from more than 1000 companies across Europe. Using our tool, you can easily compare your salaries to the market and make sure you’re paying every employee what they deserve. 

Even better: you can also use Figures to set up custom salary bands in minutes and run smooth and effective compensation reviews in a fraction of the time. 

Want to learn more about what we do? Request a free demo to get started.  

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