June 12, 2018
The debate about whether or not to include salaries in job postings is evolving as norms in society change as well; specifically, as millennials and younger generations are more willing to discuss how much money they make compared to older generations, and as more companies are becoming willing to include salary details in their job postings.
Even with the growing sentiment in favor of salary disclosure in job listings, over half of U.S. employers still decline to show salary details in job postings. Will this statistic continue to hold true, or is full salary disclosure going to be the overwhelming norm in the future -- in order to suit younger generation job seekers? Let's discuss this topic further by examining the pros and cons of including salary in job postings.
Cons of Including Salary in Job Postings
Salary Shouldn't be the Deciding Factor
Employers are looking for skilled workers and professionals who not only are qualified, but will also fit into their organization. When salary is listed in job postings, applicants are more likely to focus on this factor and either disregard other benefits of working for the company (if too low), or become blinded to the company's culture not being a good fit for them.
Recruiters want to attract sincere and qualified applicants that desire to work for the company for reasons other than the salary amount; while salary is very important, initial impressions and feelings from applicants toward the company are more pure when salary isn't know. Salary amounts aren't enough to satisfy and retain new hires when the day-to-day work and atmosphere are not to their liking.
Gives Employers Less Negotiating Ability
In a recent Forbes article called: "The Real Reason Job Ads Don't Include A Salary Range", written on March 19th, 2017 by Liz Ryan, we learn:
"Most job ads don't include a salary range because employers want to keep the salary range private. It gives them a negotiating advantage when they do."
This reason is validated in another recent article found on The Balance Careers called: "Posting Salary in Job Listings", written on March 5, 2018 by Susan M. Heathfield, which says:
"Employers argue that not supplying the salary range gives them more flexibility in considering a wide range of candidates, especially in cases where they may have some flexibility. Some employers also believe that the first party to supply a number in a salary negotiation is in the weaker negotiating position."
Essentially, businesses are not including salary in job postings, in order to look after their bottom line. This also gives employers the ability to offer higher salaries to favored applicants, which may have passed over the salary listed; and, conversely, to offer lower salaries to certain applicants which aren't as desirable.
Others Can See How Much New Hires Make
Another con of including salary in job postings is that it can be seen by other employees; when other employees know how much a new hire is making, this can cause problems with moral and workforce cohesion.
Keeping salary info private in the workplace helps mitigate jealousy and constant raise requests. Employers have their reasons for how much they pay each employee, yet if salary information is open for everyone to know, they'll have to explain these reasons more often – some employees won't agree with the reasoning.
Including salary details in job postings also gives competitors a way to constantly offer slightly larger salaries; this can become a problem if competitors are larger and more able or willing to offer higher salaries. Instead of constantly competing in a race for offering applicants the highest salary, companies can keep the competition guessing by not including salary details in job postings.
Pros of Including Salary in Job Postings
Attracts More Applicants
Some interesting stats are cited in a SocialTalant article called: "10 Reasons Why You Should Include Salary Ranges in Your Job Ads", written on October 27th, 2016 by Michelle McSweeney:
"A study by SMART Recruit Online found that when job ads include a salary range in them, they get over 30% more applicants. Furthermore, UK career portal Jobsite found that drop off rates for job adverts without salary details are between 25-35%."
Gaining more applicants is beneficial for employers, as they'll seemingly have more qualified applicants to choose from. This makes sense, as younger generations are more open to discussing how much they make, as the SocialTalant article quoted above explains:
"In Jennifer Deal's hugely successful book 'What Millennials Want From Work', she found that 'millennials are most likely to discuss their compensation with their parents (71%) or their friends (47%). In comparison, older staff are substantially less likely to discuss their compensation with co-workers (19%), friends (24%) or parents (31%).'"
With the millennials making up the majority of the U.S. workforce already in 2017, employers that cater to their preferences in the application process will attract more applicants now and in the future.
Promoting a Company Culture of Openness and Fairness
Employers can promote a company culture of openness and fairness by including salary in job postings. Instead of playing hardball to negotiate salaries at the lowest possible level, employers can put all the numbers on the table and let the proverbial chips fall where they may.
Instead of fearing competitors edging their salaries out and other employees feeling unfairly treated, employers can trust applicants will choose their company for reasons other than a slightly higher salary, and other employees will be satisfied with their salaries because they're fair.
In the aforementioned Forbes article, the author concurs:
"Is it tacky to underpay someone because he or she doesn't know the market?
Of course it is. It is tacky and unethical. It is bad business, too. It is never smart to bank on the ignorance or of lack of sophistication of your clients, vendors or employees.
How can you crow about your team, talk about the importance of talent or make any statement at all about your company's appreciation for people when you knowingly underpay anyone who doesn't know what their skills are worth?"
The question here is: what kind of company culture does a business want to promote? While including salary in job postings hardly gives an encompassing view of this, it does give off a strong initial impression to applicants of how open and fair a company might be.
Whether or not a company decides to include salary details in their job postings depends on their individual needs and preferences. As this article shows, the pros and cons of doing so are strong on both sides. Nevertheless, the trend of doing so is gaining traction, especially, considering millennials and younger generations are more open to discussing compensation than older generations are.
If interested in learning more about how to handle this controversial topic for your business, please contact us today.