How Important is Transparency Over Pay and Benefits?
How many times have we seen job adverts bearing the immortal words “competitive pay”? Many of these adverts keep statements over attached benefits vague as well – as if to reveal them would be to weaken the position of the employer.
Yet if comments in a recent article in Recruiting Times are to be noted, being secretive over pay and benefits could have the opposite effect. Evidence shows that roles listing a salary generally receive more applicants than those offering competitive pay with no details. Furthermore, some of those that do apply to jobs with competitive pay often drop out of the running once they find out what is being offered in monetary terms.
Being upfront is the best course of action, regardless of the business or industry concerned. While the rewards offered for a job role can fall into both financial and non-financial areas, the salary on offer will always be one of the most important elements of any job opening.
Being clear about pay and benefits helps foster a sense of trust
An interesting study conducted by PayScale in the US found the more people know and understand about their pay level, the more likely it is they will stay with their current role, rather than looking for work with another company. This applies even if they are paid less than people in similar roles are receiving at other companies. The trick is whether the individual knows why their pay is set at a certain level.
It would appear knowledge is power. When a company is clear about the pay level and benefits offered to an applicant, they are more likely to attract a wider selection of people for that role. That increases the odds they will find someone ideal for the position – even if they are offering less than the competition.
It’s also about secrecy. While the company offering the job may have good reasons for remaining coy about the salary until applicants reach a certain stage in the interview process, they should consider how this reflects on them. If someone says the pay is competitive, it would be logical for potential applicants to wonder why they aren’t sharing the actual amount. What does the employer have to hide? Why are they being coy?
No one would blame potential applicants for assuming ‘competitive pay’ is management-speak for ‘pays less than the going rate’ or ‘pays less than the competition’. It is clear to see why job openings that are less forward with their information can receive fewer applicants – and perhaps even miss out on the best ones as a result.
“Not just a number”
The Harvard Business Review mentioned the same PayScale survey we highlighted above. The writer of this review made the important connection between pay and emotions. Our pay is the amount we receive for doing our job. Yet it is also a reflection of what our employer feels we are worth. And in the case of those looking to apply for work, the lack of pay information easily leads to a feeling of distrust and cautiousness. It certainly doesn’t indicate the company is transparent and honest about the relationship they may embark on together.
We may be a long way from adopting clarity and transparency in every job advertisement and opening. But most would agree that fairness is a vital ingredient in any workplace. Secrecy does not foster fairness. Indeed, if the relationship between employer and employee begins on this footing, we should not be surprised if it continues in the same vein for a long time to come.