Even though 92% of job seekers in the UK rated salary as important in a job description, many organisations in the UK choose not to include it.
It has been argued that including a salary reduces competitive advantage and negotiating power. On the flip side, other organisations believe including a salary allows them to be transparent with potential candidates (building trust).
From research and client dialogue, we look at 5 reasons for and against including salaries in job descriptions.
Reasons against including a salary in job descriptions
1) Concerns over how existing employees will react
Companies who post a new job advert will catch the attention of existing employees. They may look at the advert to see what qualities their employer is looking for. If they discover the starting salary is higher than their salary, it is likely they will feel undervalued and slighted. This can lead to employees seeking other roles or demanding a raise. In the short-term, this can increase staff turnover numbers and salary expenditure.
2) Competitive advantage
Organisations who operate in competitive industries compete to hire the best talent for their job vacancies. The argument here is that if a company includes a salary in a job advert, a competitor may see it and offer more money (and/or benefits) to secure that talent; thus, reducing competitive advantage.
3) Higher paid positions assume salary negotiations
Candidates applying for senior, management, and director level roles expect to negotiate the salary as part of the application process. Typically, candidates at this level put a price on their own expertise, experience, network, etc. As a result, they are more likely to inform the company of their salary expectations in their application (CV, cover letter, or otherwise) and negotiate it once the role is offered to them.
4) Provides more negotiating power
Negotiating power lies with the employer if they post a job advert without a salary. Some organisations feel that, by including a salary rate in their job descriptions, candidates will have the upper hand when it comes to discussing a compensation package.
5) Job description first, salary later
Many companies prefer candidates to focus more on the job description and company culture than they do the salary. The logic here is that it deters candidates who are ‘money-focused’ and attracts those who deem themselves fit for the role and organisation.
Reasons for including a salary in job descriptions
1) More transparency
Candidates looking for a new role want to work for an organisation that is honest and transparent with its employees. For most of these candidates, this starts with the job advert. By omitting the salary, companies may give the impression they are not open and honest with their employees; even if their company culture and ethos states so.
2) Candidates are uncomfortable providing their salary expectations
One question candidates dread when they hear back from a job application is, “what are your salary expectations?”. If salaries are not included in job descriptions, this makes this question very difficult to answer, which can make candidates feel uncomfortable.
3) It saves the company and candidate time
Most candidates search for a potential new job or career opportunity based on, initially, three key factors – the role, location, and salary. Providing the salary allows the candidate to focus more on the company and job description. As a result, there is the likelihood of more applicants. This means companies can spend less time attracting potential applicants, and more time assessing applications.
4) The focus is more on the candidate and the role
A candidate who has responded to a job advert with a salary has accepted the salary on offer. Therefore, this gives companies more time to explore the candidate’s experience, abilities, qualifications, etc; thus, making more informed hiring decision.
5) If the salary is missing, candidates will use online resources to find out
With resources like GlassDoor, candidates can find out the salary of a role if it is missing from the job advert. The one issue here is that the information the candidate finds online may be inaccurate. This may deter the candidate from applying as they believe the salary bracket does not meet their expectations.
The research shows the main advantage to disclosing a salary is the increased likelihood of more applications. In addition, it appears that some organisations prefer to disclose a salary so that they can focus more on the candidate and their abilities.
However, by including a salary, applications may come from those who are more interested in the salary than the role. Furthermore, companies who want to offer salaries in line with market base rates may isolate existing employees whose salaries are lower.
Overall, there are benefits and drawbacks to including a salary on a job advert. The key takeaway is that salary disclosure may not suit every organisation and role.