7 reasons employers should disclose salary in their job posting ads

I’ve been an active participant in a number of online discussions recently, including one in Hung Lee‘s excellent Recruiting Brainfood group on Facebook, about whether employers should include hourly wages, salary, or other compensation data in their job posting ads.

One of my takeaways was that there is a significant cultural difference country-to-country. Apparently, it is considered somewhat rude to discuss salary data in countries ranging from Canada to Iceland to some of the European nations. It is considered good negotiating skills in the United States and part of the United Kingdom.

For employers in the United States, where College Recruiter is based, many and perhaps most employers are emphatic in their refusal to include any kind of salary data in their job posting ads. In my view, this view is very 1992 in that it pre-dates the modern Internet. Until virtually all information about everything imaginable was available with a few keystrokes, employers could justify their lack of transparency by relaying the adage that knowledge is power.

Few would be so candid as to phrase it this way, but the desire to withhold salary information until the candidate has been offered the position was an effort by employers to underpay its employees. After all, if the employer wanted to pay fairly, then disclosing the information would do no harm as a candidate who met the basic qualifications but not the preferences would be paid at the bottom of the disclosed range while another who met all of the requirements and preferences would be paid at the top. It shouldn’t be hard in a society like we have in the United States for the recruiter or hiring manager to explain that to the candidate.

I’ve heard employers justify the lack of transparency by pointing to the “knowledge is power” reason, which I just debunked, and also to the “there is no upside” argument, which I will now debunk. There is upside. Employers, correctly so, often complain that job posting ads often generate insufficient quantity, quality, or both. Disclosing salary data helps to solve both problems. Why? Many, many candidates will read a job posting ad and not be convinced. Some will feel that they’re over-qualified and so won’t apply. Others will feel they’re under-qualified and so won’t apply. But when they see the salary data, they have another data point to self-select in or out.

Most people know their market value, as they’ve been getting paid and are now looking for a new job. Sometimes, people are willing to take less pay for more happiness, which can happen when you work less, work closer to home, etc. But mostly, people want to earn at least what they have been and so their most recent wages are a very good guide to what they feel they deserve. If you’ve been earning $30,000 a year, unless something VERY significant changed in your life, you know that a job ad with a salary range of $80,000 to $95,000 is one that you should not apply to as you’ll almost certainly be under-qualified. The converse, of course, is also true: if you’re earning $80,000 and a job is advertised with a salary range of $25,000 to $35,000, you know you’re almost certainly over-qualified.

Job boards like College Recruiter see this over and over and over again across all geographic locations they serve, all occupational fields they serve, employers, job titles, levels of experience, and more. The fact is that job posting ads that include salary data generate more applications AND the applications are of higher quality as the candidates tend to be well-qualified. Not over- and not under-qualified but well-qualified.

Our friends at Social Talent posted a good list of seven reasons why employers should include salary data in their job posting ads:

1. Compensation and benefits are the first thing job seekers look for.
2. Candidates will try to find out anyway. For example, on College Recruiter, every job posting ad includes either the salary range data provided by the employer or our estimate of it.
3. It supports your diversity, equity, and inclusion efforts by helping to ensure that candidates aren’t offered different salaries based on factors such as race, gender, and age.
4. Younger workers insist on it as they often share that information with their family and friends.
5. Those who are currently employed are unlikely to even apply unless they can see that the potential, new job is substantially better than their current job, and salary is a key factor in determining that.
6. Disclosing salary data is becoming the norm and even required by some states.
7. Disclosing salary data gives you a key, competitive advantage over your competitors for the same talent. Even if you don’t want to disclose salary data, consider it from the perspective of the candidate who is in-demand: if they can choose to work for a number of organizations, they’re likely to apply to those who are most appealing and employers who are transparent and pay competitively and perhaps even well are most likely to be appealing.