Is Transparency of pay important when hiring?
My resounding answer is YES!
Transparency of pay (when hiring) presents your company as one that is committed to equality, fairness, and trust, and points to a business that is committed to creating a positive and equitable work environment (improving candidate engagement).
Before I discuss the positives, there are a couple of negatives that should be considered.
It is important to note that with full knowledge of what others are earning in a company, candidates can understandably develop unrealistic salary expectations. Therefore, if an employer’s job offer falls short of these expectations, candidates are likely to feel demotivated and less inclined to accept the offer, and if this continues into a compensation and pay structure that is inflexible, the employer runs the risk of losing out to a competitor.
In some sectors, it is fair to say that pay transparency is not the norm, and if a business adopts this approach, there’s a risk of a competitive disadvantage, with competitors potentially poaching employees by offering higher salaries and therefore, attracting the top talent.
However, if a business tailors their approach to the specific needs and culture of the industry they sit in, I firmly believe that the benefits far out way any potential negative impact. For any business looking to hire, pay transparency brings a sense of equality and fairness, outlining the company culture from the get-go.
Our research shows that candidates want to be informed at the beginning of a process and they’re far more likely to engage with the process, if this is the case. Candidates are now looking for employers who have a respect for employee financial wellbeing and who can demonstrate a commitment to open communication (from day one), which in turn fosters a positive work culture. Another point to consider is that (in some cases), legislation may also require employers to be transparent around pay, and employers should be aware of the legal requirements around this and ensure compliance.
While there are huge advantages to pay transparency during the hiring process, the extent and nature of that transparency varies hugely from company to company. For example, some businesses may choose to disclose specific salary ranges (roles may vary hugely depending on the level of experience a candidate may bring), whilst others may opt for transparency at the point of offer.
So, in answer to the question, YES, transparency of pay creates a more positive experience for applicants AND your current employees, treating everyone equally and fairly from day one.
