Salary can be a sensitive topic. Even among friends and colleagues, open discussion about individual earnings is rare.
But a tight labour market is prompting more private-sector companies to break the taboo and include a salary range in job postings to draw talent.
“Maybe it’s North America, but we’ve always kept our salary secret. What I make, I don’t tell you; you don’t tell me,” says Michael French, national director in Canada for Robert Half International human resources consulting firm.
That’s changing, he says.
Because of the labour shortage, 45 per cent of Canadian companies have increased starting salaries, according to a survey by Robert Half – and it seems they want prospective hires to know about it.
“In my 20 years, this is the biggest salary increase [in Canada] across the board that I’ve ever seen,” says Mr. French, whose company publishes an annual salary guide.
The public sector has long made wages and salaries public, but in the private sector, compensation has normally been subject to negotiation, he says. Not any more.
Yet it’s not necessarily the salary that draws top-tier talent. Mr. French says well-written, detailed career postings highlighting the importance of a role and why it matters to the organization and the community are key.
“One of the things that we’ve learned during COVID is it’s not just a job, but people want to know that what they do matters, that it matters to themselves, and it matters to the community,” he says. “Some really good postings talk about the impact that either the position or the company makes in the community.”
A quick scan of online job boards shows that most postings include a salary, but some are specific right down to the dollar, while others include a broad range that doesn’t mean much, Mr. French says.
“What’s the point of that?” he asks.
About 74 per cent of jobs posted on Indeed have salary information, up from 66 per cent in the same period last year.
The ongoing labour shortage means it’s a job seekers market, says Michelle Slater, director of country marketing at Indeed in Canada.
“When you’re searching for a job, one of the most important things that job seekers want to know is how much are they going to make,” she says.
She says that companies that include pay information in job ads are getting more applications. She points to an Indeed survey showing nine out of 10 companies that included pay in their job postings said it was beneficial for their hiring process, while three out of four Canadian job seekers surveyed said they are more likely to apply for a job if the salary range is included.
“If you have in the posting the salary, it means you’re probably going to have an easier time filling that position from an employer’s point of view,” she says.
There is also the wage gap. Ms. Slater points to various reports showing women still earn much less per dollar than men.
Salary transparency is mandated in several U.S. jurisdictions to eliminate the wage gap for women, visible minorities and other groups. For example, as of Nov. 1, New York City’s Wage Transparency law requires all private-sector employers to include a salary range in job ads. A similar law will take effect in California beginning Jan. 1, 2023.
Ms. Slater says salary transparency helps close the pay gap, and even without legislation, three-quarters of Canadian companies are making salary information public, though legislation is beginning to appear in Canada.
Last year, federal wage transparency measures made it mandatory for federally regulated private sector employers to report salary data with aggregated wage gap information. Over the summer P.E.I. passed legislation making it mandatory for all public job postings to include salary information and B.C. is conducting consultations about similar steps.
“So not only is it good for getting new applicants for the role, but it also helps to address any pay gap,” she says. “It’s an important thing for companies to consider. We want to ensure that men and women are paid equally for the same or similar jobs.”
Indeed offers an online salary calculator that will crunch the numbers on average pay based on the job and geographical location.
“It’s a powerful tool in their back pocket to know if they’re being paid equitably and fairly,” Ms. Slater says.
The practice of making compensation public in job postings varies by industry, says Peter Humphrey, managing director of Richmond Hill, Ont.-based TalentSphere recruitment agency.
It’s used as a screening tool to bring in only applicants comfortable working within the salary range on offer, he says, but it can also backfire.
“You’ve got to have the intel correct,” he says. “You put a salary in, and you might lose applicants that you might have been willing to up the ante on, particularly if all your applicants are all looking for $10,000 more than what you originally were planning.”
The labour market is so tight right now that salaries have risen quickly, and some companies are trying to hire with a salary range that’s significantly off the mark, he says.
Recruiters rarely set a salary range up front, preferring to negotiate compensation for the right candidate, Mr. Humphreys says.
Benefits, location, vacation, flexible hours, hybrid and remote work are all important to job seekers, “but at the end of the day, money is still a big one,” he says. “As much as we sugar-coat it with all the perks and benefits and flexibility, someone very rarely will take less money than they were earning. They’re seeking more money.”