Should you use “competitive salary” in your job descriptions?
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Should you use “competitive salary” in your job descriptions?
“We offer a competitive salary”
You see your competitors are using it. Maybe you are using it too. It’s quite industry standard by now.
But is it really helping you with hiring? Get ready as we dive into the best way to talk about salary on job descriptions to attract top talent.
Is salary important for candidates?
Does money make the world go round? Yes.
In the 2023 LinkedIn Learning Workplace Learning Report, the #1 factor for employees when considering a new job compensation & benefits.
Although it isn’t groundbreaking news, it further reinforces the idea that if you don’t have your ducks in a row and are communicating about salary effectively to candidates, you’re missing out.
And all this communication about salary and compensation? Well it begins with the way you word it on your job descriptions.
PSST Want to learn about best benefit practices? Get out most recent reports on France, Germany and the Netherlands here.
Are we all on the same page with what a competitive salary really means?
On a quick Google search, anyone can find the general consensus: a competitive salary means that the salary being offered is equal to - or more than - the average for the industry for a similar position and location.
But that leaves a lot of room for questions like: what is the average? How was the average calculated? When was the average value calculated? What are the factors that make a candidate worth more or less?
These questions can lead to confusion, distrust, and based on Reddit… some potential criticism of your company:
- “How can salaries be competitive if they are secret?” - Reddit user
- “They are competing with other companies for paying the smallest possible salary people would still accept.” - Reddit user
- “The lowest we can get away with" isn't quite as catchy.” - Reddit user
- “In that case, I won't tell you what my skills and experience are, just that they're competitive with other candidates.” - Reddit user
Are you still sure about using "competitive salary" in your job descriptions now?
The case against “competitive salary” on job descriptions
The best way to look at whether or not to use “competitive salary” on job descriptions is by thinking about the candidate experience.
Here just three examples of scenarios where writing “competitive salary” will make you lose out on the talent war:
#1 - I am a highly skilled developer browsing LinkedIn on my lunch break, slightly content in my current job but not motivated to change. I see an interesting job post for a cool position with a “competitive salary” but no numbers. I click off knowing that applying means going into 3-5 interviews without knowing the salary and could be a waste of time if it turns out I would earn much less.
→ No ease of decision making, no candidate.
#2 - I am a talented sales manager who cares about DEI looking for my next role after a career break. I see a job post with a “competitive salary” but no numbers. I click off thinking that the company most likely doesn’t value fairness and has no structure in place.
→ No structure & fairness, no candidate.
#3 - I am a motivated IC looking for my next career move, actively looking on career sites. I have been recruited by another company with a proposed salary but keeping my doors open for the moment. I come across a job post with a “competitive salary” but no numbers. I decide not to apply since I am unsure if I will really make more than what the recruiter in my direct messages already offered and decide not to apply.
→ No transparency, no candidate.
In all of these cases, the exact talent that you wanted to attract were pushed away not because of the job description, not because of the company values, but based on a buzz word being used instead of a number.
That’s right, your lack of transparency is actually more of a transparent window into your company organization - there is a lack of structure, fairness, and process.
So, what you should do instead?
Put REALISTIC salary ranges on job descriptions.
Now, there are both pros and cons, different levels of transparency and different ways of communicating that transparency. We're not saying it's an easy subject to hop into. But we promise, the risks and hard work is worth the rewards.
It's a tricky topic, that's why we put together this article on everything you need to know about pay transparency
Fun fact: we even found that the adjusted pay gap is 0% for companies with full transparency (compensation policy, salary grid, and individual salaries)!
Where to begin? Our #1 advice? You better be ready to open pandoras box.
The very first step towards transparency is diving into your current compensation approach. This includes:
- Looking at pay inequity (PSST you can do that on the Figures app, reach out to our team to try it yourself)
- Checking for gender pay gaps.
- Reflecting on the way your team makes compensation decisions like making sure you have a compensation philosophy
Unless you have had structure from Day 1 and stuck with it, typically this step can feel overwhelming but don’t let that discourage you.
What are some things that can help?
- Getting the support of your leadership.
- Taking it step by step, diving the work and setting reasonable expectations given your resources.
- Reminding yourself that it’s a journey.
Next up? Create salary bands
Typically creating good salary bands takes time, time, and more time. But they are worth it when used effectively for a variety of reasons...
All that hard work pays off in creating salary bands when you have increased employee retention and engagement, pay equity and are able to maintain competitive salaries.
Soon the days of painful salary bands are over. Stay tuned for our announcement this year of the Figures Salary Bands feature going on tour.
Want further insights on pay transparency?
Alongside Otta and a panel of experts we answered some questions like:
- What are the challenges and benefits of pay transparency?
- How is EU legislation affecting transparency?
- What have business leaders learnt throughout their salary transparency journey?
Watch the replay here.
Still not biting on being transparent on job descriptions?
Say hello to the EU Pay Transparency Directive coming into play in 2024. Soon for many companies it won’t just be an option but an obligation.
However even if your company doesn’t fit under the criteria, it’s a best practice for you to get on the transparency train now, being an early adopter and improving your employer brand.
In addition to that, a 2023 report from The Josh Bersin Co. found that among the 5% of companies with effective pay equity policies, they were:
- 1.6 times more likely to meet or exceed financial targets.
- 2.1 times more likely to attract the talent they need.
- 1.7 times more likely to innovate effectively.
Consider now to be the time to get your ducks in a row, before it’s too late and you’re far behind.
Want to learn how to be really competitive?
Figures is here to help you be the compensation expert for your team.
Here are our favourite resources on the blog to help you on your journey:
- How to stay competitive using market compensation
- The ultimate fair compensation checklist
- How to communicate compensation decisions to employees
- What is a compensation philosophy and how to set it up?
Get in touch with our team to start using Figures today.