The question of salary transparency in job postings has become a pressing concern for employers seeking to attract qualified talent effectively. While some employers may hesitate to disclose specific salary figures, the absence of any salary information can lead to reduced applications and missed opportunities to connect with top candidates. This article explores the influence of salary transparency on job applicants and presents intriguing research results regarding pay transparency legislation and job seeker preferences.
In an article on pay transparency featured on ellecanada.com, Allison Venditti, a career coach, HR expert, and founder of Moms at Work, emphasizes that pay transparency is becoming inevitable due to the openness of the Gen Z generation, who share everything, including their earnings. Employers typically have a budget when posting job openings, and job seekers are increasingly frustrated with applying and interviewing for roles only to discover the salary is below expectations. This lack of transparency results in a significant waste of time for both parties involved.
Here are some additional findings about pay transparency as it relates to job applicants:
- A talent.com survey indicates that 84% of Canadians support a law requiring employers to include salary ranges in job ads.
- According to a LinkedIn survey, 91% of U.S. job seekers said that including salary ranges in job posts would affect their decision to apply.
- Salary ranges were considered the second most important element in job descriptions after responsibilities, with 89% of respondents finding them helpful in making a decision.
- Having a salary range in a job post can lead to more positive impressions of the company, according to 82% of survey respondents.
Some of these findings can be corroborated by looking at the job seeker search terms on the CPA Alberta Job Board within the last 30 days. Both “$100,000” as well as “$100,000 accounting and finance” were among the top search terms to sort jobs on our board.
While pay transparency legislation is not currently in effect in Alberta or Ontario (yet), it is working its way into law in Prince Edward Island, Nova Scotia, British Columbia, and Newfoundland & Labrador. There is an increasing trend of pay transparency legislation in North America and globally; other provinces in Canada may also adopt similar laws in the future.
Recent legislation in BC requires pay transparency to be phased in for employers including:
- BC employers must include the expected “salary or wage” in all publicly advertised job postings.
- Employers are prohibited from asking job applicants about their current or previous pay.
- Employers cannot retaliate against employees for discussing their pay or requesting pay transparency compliance.
- Employers must collect certain information from employees and prepare annual pay transparency reports.
- Employers with publicly accessible websites must post their reports online; others must provide copies to employees and the public upon request.
Assuming legislation such as Bill 13 above becomes ubiquitous across most Canadian provinces, employers should consider taking proactive steps toward pay transparency and avoiding pay compression.
Pay compression (or salary compression) refers to a situation where the pay of one or more employees is very close to the pay of more-experienced employees in the same job, or even those in higher-level jobs, including managerial positions. Recent research from Robert Half shows that pay compression can lead to employee disengagement, recruiting challenges, and potential turnover. The accompanying infographic from Robert Half shows the importance of pay equity.
To summarize, there is compelling evidence that employers should include salary ranges in job postings and aim for salary transparency for all involved in the hiring process. This maximizes the quality of talent that will apply for your role, saves time for all parties in the hiring cycle, and eliminates awkward questions about the expected salary for the role. Finally, this also helps foster a positive impression of the company. Another survey by LinkedIn showed that 82% of respondents said that seeing a salary range in a job description would give them a more positive impression of a company. This suggests that companies that are transparent about pay are perceived more favorably by potential candidates.
Visit the CPA Alberta Job Board for more information.