Should employers disclose salary in job ads?

When it comes to disclosing salary information on job advertisements, it is cause of contestation. Many companies would disagree on whether or not it is a good idea to provide salary details while posting a job. Even employers who favour transparency might argue that it is premature. However, including salary details can be a benefit for both employers and employees.

Most companies seldom include wage information on their job postings. Reputed companies especially, do not find the need to disclose salaries as candidates apply either way.“Compensation offered on basis of experience’ is the common disclaimer. A quick search on Indeed reveals it is mostly the relatively less known brands that find the need to attract talent on the basis of compensation offered. Varun Upadhyaya, group head-HR, Wockhardt, says, “Many time small organisations do put it because that it their USP. The more well-known brands usually try to avoid that.”

And it is understandable why salaries are usually not disclosed. There are many downsides to doing it.

Let us have a look at the cons of disclosing wages in job advertisements.

Cons

Attracting the money-minded

Recruiters are always on the lookout for quality talent and those who will be a good culture fit for the organisation. When salary is listed in job postings, applicants might focus on the pay alone and disregard other benefits of working for the company. Hiring managers will want to recruit talent who are interested more in the job role rather than the money involved. Pay is important, yes, but a candidate’s intentions might be better understood if money is not put on the table upfront.

“Compensation offered on basis of experience’ is the common disclaimer. A quick search on Indeed reveals it is mostly the relatively less known brands that find the need to attract talent on the basis of compensation offered”

Moreover, even though it may be an important element for recruiting, even the promise of a high pay is not enough to retain a dissatisfied worker.

The competition gets a whiff of what you are doing

Posting salary details can also give competitors an insight into the compensation packages offered by a company. One might get outrun in the race for talent and can even cause employee retention issues. It can become tough to recruit quality talent if one is constantly fighting to offer a slightly higher pay.

Even though there are potential downsides, companies might find it is better to be upfront when it comes to compensation. In addition, it might be better for the organisation as well.

Pros

It is an early screening process

Posting a salary range at the beginning can be beneficial for the hiring managers. It creates an automatic screening process whereby only candidates who are willing to work within the specified range will apply and the rest of them skip the offer. It can save the recruiter valuable time. What might have been a failed interview can be another spot saved for potential candidates.

A better candidate experience

Is it not agreed upon that employee experience starts from the moment a candidate applies for a job? In that case, it makes all the more sense for a recruiter to provide compensation details. A common complain among applicants is finding out at the end of an interview that the salary offered does not meet their expectations. After going through the lengthy process of filling out an application form, unmet expectations can result in a disappointing experience. And if this becomes the case for many such potential recruits, it can create a negative image for the employer’s brand.

Transparency and clarity

Every employer knows that salary is among the first in line of many things on the mind of every potential employee. So why not get it out of the way in the first place? Doing so can offer some assurance to the candidate and might help clarify expectations over such a contentious issue even before the hiring process begins. It might be easier for employers to deal with this first rather than negotiating in person at the end of the process.

“Companies should always provide a salary range to let potential candidates know what they are getting into”

Moreover, putting a fixed amount on the table can send a message that one is serious about the offer and that the candidate need not worry about being low-balled in the process. This might also help candidates make a better decision about whether to apply or not.

Bikram K Nayak, Head HR, L&T-NxT advocates putting in a salary range, “Companies should always provide a salary range to let potential candidates know what they are getting into. Otherwise it can become a waste of everyone’s time. Especially in the age of AI and ML, it is important because it acts as a filter.”

At the end of the day, the decision rests on the employer. With platforms such as Glassdoor and Indeed, compensation is no longer a corporate secret. Employees and potential candidates can find out at the click of a button what
their counterparts in the industry are earning.

Upadhyaya adds, “It is very situational. If one is looking to attract niche talent where the salary could play and important role then it is better to put range. On the other hand, if one is operating in a highly competitive environment where even the minimum amount makes a difference, then companies usually put ‘as per market standards’ instead of salary.”

The onus of being transparent remains with the recruiter. While the cons are understandable the benefits to including pay in job advertisements are good enough to invite serious consideration.