Pay transparency is business critical: here’s why

7 May 24 | Blog

‘Competitive’. What does the word mean? What is it hiding? Do people writing job advertisements know that it makes prospective candidates assume that this mysterious ‘competitive salary’ is almost anything but?

Let’s be clear: organisations need to be transparent about salary, particularly when it comes to their job advertisements. Here’s why…

Why to include salary in your job advertisements:

If you don’t, prospective hires are put off

61% of prospective hires care about pay transparency. And why wouldn’t they? In a world of weird-and-wonderful job titles, it can be very difficult to understand what a ‘competitive salary’ actually means. If you’re searching for specific skill sets, considerable experience, and top-notch talent then just know that hiding the salary range could mean less applications.

If you don’t, you waste time in the hiring process

Hiring a new team member isn’t a quick process. Being transparent about the salary range you’re willing to offer can save you time in several ways. Firstly, because it means you get less unsuitable candidates (people will judge whether it seems like an appropriate fit partly based on salary). Secondly, it means pay negotiations can be fast – they know your ceiling, and you can work around that.

If you don’t, your employer brand can take a hit

It’s a hard thing to quantify, but your brand as an employer really matters. Because people are suspicious about organisations who don’t specify salary, just one encounter with your job ad can change their perception of you long-term. Being transparent also implies that you’ve got nothing to hide…

If you don’t, you’re not supporting fair paying practices

Research found that “companies with transparent job adverts report a 9% gender pay gap, compared to 19% for those without”. And the logic follows for pay discrepancies across other protected characteristics too. If you’re committed to paying people fairly and equitably, then shout loud about it – it also means traditionally underpaid groups have a chance of knowing where they really stand.

If you don’t, it’s hard to hold decision-makers accountable

For some leaders, it’s a convenient truth that people don’t like to talk about money. It makes it easier to keep salary budgets tight, and not have to splash the cash on pay rises. But if you’re transparent about salary at the hiring stage, it means you have to follow-through with fairness when it comes to pay and progression. And that’s key for retention.

3 ways salary benchmarking makes it easy to be transparent about pay

1. See the market range for particular roles and industry

Salary benchmarks let you know the average salary range for particular roles, and in specific industries – that means you can land on a range that you feel comfortable with, and that won’t put off job seekers.

2. Understand where you could (and should) offer more

Sometimes, you’ll do a salary benchmarking exercise and realise you can’t afford to match the market rate. But that’s still important knowledge: then you know that you need to ‘bring it’ when it comes to offering other perks.

3. Link salary to metrics like attrition and absence rates

Salary benchmarking can be done in conjunction with other people analytics exercises, so you can understand the cost of replacing people, identifying those flight risks, and making projections about the overall cost.

Qlearsite Pro offers salary benchmarks – and more!

Our platform combines people analytics, benchmarking, and surveys – so you have all the data sources you need to understand your organisation, and make changes that save you time and money. Learn more:

 

  • Dynamic salary benchmarking: global pay data, from over 1 million different organisations – industry-specific and automatically mapped to your job titles
  • Automatic cost analysis of metrics: see the cost of replacing staff, what you spend on different team’s salaries, and how much sick days are costing you
  • Attrition, absence & gender ratio: benchmarks, tracking, and analysis of attrition, absence, and gender ratio – so you have all the relevant information
  • Trends & drivers auto-identified: understand how metrics are trending over time, and see auto-insights about the specific groups driving KPIs like attrition rate
  • Alerts about risk areas in your team: get notified if your attrition rate is trending up, for example, or if another challenge is going to threaten your team…
Salary cost view

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Anne Therese Bogen, Head of HR, Thommessen

"Qlearsite’s platform is a really helpful tool to push through OKRs – it’s easier when you have statistics and concrete evidence to back up initiatives."