Show us the money: Hidden pay is hurting recruitment

cash 1Companies complaining about talent shortages are being urged to be more transparent about what they are offering, with a new study revealing that over a third (35%) of job ads hide salaries under woolly terms, with those advertising marketing roles the worst offenders.

With pent up demand during the pandemic, the pursuit of greater job flexibility, and the cost-of-living crisis squeezing household budgets, the job market is still thriving.

Recent Chartered Institute of Personnel & Development figures show almost half (47%) of employers report having hard-to-fill vacancies and have raised wages to help offset the issue.

But despite pay being a major factor in whether a candidate even applies in the first place, an investigation by data analysts at HR and leadership publication People Managing People has found that too many still keep this under wraps, using phrases such as “competitive salary” and “depending on experience”.

The study, based on an analysis of over 6,000 job listings across marketing, IT, sales and finance and operations, found that 2,130 ads failed to disclose the salary on offer to candidates.

Within specific departments, marketing roles are the least likely to disclose salary information (41%), followed by sales and operations (35%). By comparison, advertised roles for IT and HR professionals were the most likely to provide salary details with 27% and 29% failing to disclose, respectively.

Of the roles analysed, the highest rates of salary non-disclosure were found in job ads for senior and C-suite positions, including chief technology officer (81%), chief marketing officer (71%), sales director (59%) and operations director (58%).

People Managing People editor Finn Bartram reckons employers hide salary information on job listings as it offers them more negotiating power to agree on a salary in the later stages of the recruitment process, once they understand the candidate’s expectations and their personal circumstances.

He added: “Hidden salaries are also a key competitive move to stop other similar businesses knowing how much they are offering for a role and outbidding them to attract talent.

“Employers also argue that publicising salary information can cause resentment and demands for pay rises from their existing workforce, if they feel their salary doesn’t fairly compare to what is offered to new recruits.

“It can also create resentment when a candidate accepts a job offer if they know they have been given a salary at the lower end of the advertised pay scale.”

However, the job market is now skewed in the candidate’s favour from growth pressures post-pandemic, vacancies taking longer to fill and widening skills gaps, meaning employers are at risk of missing out on talent or narrowing the type of applications they receive, the report states.

The pay gap – both for women and minorities – partly stems from the ‘ask gap’. This is the difference in what different groups expect when it comes to salary and how likely they are to get a pay rise if they ask for one.

A separate YouGov survey recently revealed that, of the 40% of adults who asked for a pay rise, just over a quarter secured one. When broken down by gender, 43% of men asked compared to 33% of women. Furthermore, 31% of men were successful, while 21% of women received a pay rise, fuelling salary inequality.

Bartram concluded: “Pay transparency can go a long way in building trust within a workforce, equating to lower turnover rates and greater performance gains. With societal pressures to build transparency, promote truth and close inequalities, organisations opting for hidden salaries may need to rethink to get ahead.”

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