Note: article updated from March 2015
Here at Landing.jobs, we love helping companies build great teams. To do so, we’ve made it our mission to simplify and improve the hiring process so that we can attract great candidates to fulfil these roles. However, one of the biggest stumbling blocks we’ve found in recruitment is an unwillingness on the part of some employers in disclosing salaries or salary ranges on job offers. What’s going on here?
Status quo: Employers rarely disclose salary
Human resourcing can sometimes seem like a game of poker; neither the employer nor the potential candidate is willing to show their hand when it comes to roles with undisclosed salaries.
Recruiter: “Why don’t you tell me how much you think you’re worth?”
Candidate: “What salary range have you budgeted for this role?”
Whilst business savvy and negotiating skills are certainly desirable in the workplace, both parties would admit that mutual distrust is a poor way to start what should become a rewarding relationship. When a company seeks to employ someone, they tend to have a very clear idea of roles, responsibilities, metrics for success and – how much they are willing to pay for a candidate who can deliver.
Naturally, employers are demanding, but if they are going to field the best pool of candidates who will invest time and effort in their CV presentation, cover letters, interview preparation, background checks, references and proficiency tests, then being open and honest about the budget they have for a job will go a long way to avoiding disappointment on both sides.
Two years after we first wrote this article, we can proudly say that companies’ mindset are changing and we’re having more and more employers disclosing salaries. #freethesalaries (someone should really create this movement. Just sayin’)
Although this is a major win because employers are finally realising what they can gain from it, it doesn’t happen in all countries and we’re still seeing resistance in some Portuguese companies to do so. According to our own data, this is what we found:
- 10 in 20 companies are still resistant to disclose the salary;
- 6 in 10 companies don’t want to disclose the salary when explained the benefits of doing so.
We still have a long way to go but don’t worry. We’re a very persistent bunch.
So why are hiring managers sometimes less than transparent with salaries? Our experience and conversations with them have revealed some of the most common reasons, and how we’ve helped them overcome their doubts and fears to list remuneration on.
1. The applications come pouring in anyway
“I don’t need to list a salary – I’ll still get loads of applications.”
Yes, you have quantity, but what about quality? How much time will you spend sorting the wheat from the chaff? How much application spam will you have to review and dispose of? And of the relevant ones, how many under- and over-qualified candidates do you need to sift through because they lacked the vital piece of information that is a salary range? Self-selection is a powerful first filter in the hiring process, and the money you’re willing to pay a successful hire is the key metric to enable it.
2. Resentment between current employees and new higher-paid employees
“I don’t want my current employees to see how much more than them this new hire will get.”
In an ideal world, all employees are rewarded equally for similar roles in a company. The reality is, varied skills, experience, the maturity of a company, market supply and demand, and individual negotiations will create an uneven playing field. Another reality? People talk, and salaries will always be a hot topic of conversation around the water cooler. By embracing transparency here, you can take some of the stings out of the inevitable gossip that will ensue. Or you can go all-out and bake salary transparency for every employee into your company’s culture, as Buffer has.
3. Managing candidate expectations
“If I list a salary range, every candidate will assume they should be at the top end and will be disappointed if an offer comes in lower.”
It’s natural that a good candidate will have confidence in their abilities and seek to gain the best possible outcome in a new job. However, a good hiring manager will know how to separate healthy ambition from self-delusion, and also how to communicate why an offer is made at a certain level. And a good candidate will either agree with this assessment or use the chance of a lower-than-expected offer to skilfully reason for a better rate in a counter-offer and prove their worth.
4. Eavesdropping competition
“Salaries of new roles are a piece of business information my competitors can use against me.”
In reality, the actual role with its listed responsibilities and desired outcomes is far more strategically valuable to your competition than the amount you are looking to pay for it. But that doesn’t stop you from posting job openings, does it? A competitor *could* try to interfere with your recruitment efforts by swooping in and offering more money to a candidate, but that would require the interception of far more information on individual applicants than is possible without either A) hiring a private detective or B) having the same candidate applying for a similar role and them using this for his or her negotiating advantage. If that’s the case, and the candidate is great, welcome to the free market – be ready to pay what you think they are worth and offer non-financial benefits and a great working culture. Otherwise, truth be told, your competitors are probably too busy running their own businesses to meddle in your recruitment process.
5. Holding out for a purple squirrel
“I’d be willing to pay above range for the perfect candidate, but will I ever hear from them if they’re not even looking at roles in the advertised amount?”
We frequently hear this, and what it mostly comes down to is not being realistic about the budget required for the role in question. If you advertise a particular role at €10K less than the market rate, don’t be surprised if you hear back from mediocre candidates. The so-called perfect candidate in this role will probably be someone who has the experience you’ve asked for, likes the sound of the job and your company, but is realistic and asks for the market going-rate which, according to you, is “above range”. But if you have done your homework and advertised a role in a salary range that will draw in quality applications, that’s what you’ll get. You can’t hold out for “purple squirrels” (but catch them if you’re lucky enough to get them!).
6. Fear of losing negotiating power
“If I’m open about the salary amount or range then I lose the power to negotiate.”
We’re still living in the wake of the largest financial crisis since 1929, and the protectiveness and paranoia from that trauma still has a deep impact on businesses and how they procure and recruit. Human resource is the single biggest expense for most companies, and once enlisted, cannot be pared down or eliminated easily. After all, people’s lives and their livelihoods are at stake.
But what exactly are you losing the power to negotiate about? You get a potentially valuable asset to your organisation enthusiastically applying for the job, with the advertised salary being a major attraction, and then want to fight them on paying less? You may save money up front, but not without creating resentment and demeaning your new employee before they’ve even started. Do your research, find out what you need and want, and be transparent about it. You won’t lose power – you’ll gain it in the form of a happy, engaged and productive new worker.
7. Budget not yet approved
“Management hasn’t approved the salary range yet.”
Then you shouldn’t start the hiring process. Really, don’t waste anyone’s time – yours or theirs. You’ll tarnish your company’s reputation in the communities candidates are from and harm your recruitment efforts in the long term.
8. Project trumps salary
“They should care more about the project than the money.”
People apply to jobs because of many different reasons, and focusing only on the ones that value the product more and don’t care about how much they’re going to get (along with all the other competencies mentioned on the job offer) is like finding a needle in a haystack. Truth be told, salary is still one the main reasons why candidates apply to job offers. It’s better if you start accepting it.
As a hiring manager, you expect candidates to be transparent and offer full disclosure on their work and education histories, and to invest a significant amount of time in proving to you why they should get the job – the least they should be able to expect is similar information on the roles and full disclosure on the financial benefits they would be entitled to if they get hired. Also, by not disclosing salaries, you are putting doubts on the candidates and making them think that the reason behind not disclosing the salary is because it is too low. Maybe it is and maybe it’s not, but it’s better to let the candidates decide that.
It’s not mandatory for employers to list salaries, but we strongly encourage it. It narrows the field of candidates to those who have a realistic chance at being recruited; a junior developer on €20K is not going to waste your time applying for a role paying twice that amount, and that’s one less CV you have to review and decline. It also proves to candidates that your company is changing its mindset and becoming more updated and in-line to where the market is going. Seriously, who doesn’t like a change for the better?
By for now and ~Bom descanso
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How to talk about money