405.627.6326 matt@whyhr.guru

There is a long-standing school of thought that, when posting an open position at a company, salary should not be publicly listed. In most cases, the goal of the company is to get the candidate they want but at a lower salary than the candidate would like. It is viewed as a negotiation game to be won. But is achieving this goal truly a win for the company? At WhyHR, we don’t think it is.

This type of cat and mouse game hasn’t been effective in a practical sense for a while now. Rather than creating a winning situation, companies run the risk of investing in an employee who is more likely to be frustrated and potentially leave the organization.

Instead, companies should be posting a salary range with the job posting, which offers many benefits for both the employer and the potential new employee.

Increased efficiency

The first benefit comes in the time and efficiency of the application process for both the company and the candidate. Candidates who are looking for a higher salary will quickly move on, which will allow the company to focus its time and effort on candidates who will not walk away from negotiations because the offer is far lower than expected.

Better alignment

When a company has focused on the very best candidates who are never realistically going to take a job far beneath their desired salary, they are passing by candidates who are the right fit for the role. These candidates both possess the required skills and knowledge and are looking for a salary in line with the offer. By the time the company circles back to these candidates, they may have been hired elsewhere.

When a candidate arrives at an interview knowing that their desired salary aligns with the pay range, candidates and interviewers can focus on the important work of determining whether the candidate is a good fit for the company in areas other than salary. This goes back to the benefit of spending less time on the wrong candidates and more time on the right candidates.

Reduced turnover risk

If, by chance, a company can convince a candidate to agree to less than their desired salary, they may feel like they have won the negotiations. Perhaps they have in the short term, but every day after that, they are losing ground. The new employee will walk into the position already seeking to get a raise and trying to prove they are worth it. When it’s time to renegotiate salary in a year, the company risks the employee moving on to a new company who can pay them what their skills are worth. Companies who are transparent about salaries up front are more likely to hire employees whose salary expectations align with the job, and thus may be more likely to stay for a while.

Increased productivity and focus

There are also mental health implications for the employee who is hired at a salary far lower than desired. We know that mindset does translate into the quality of work that employees produce. If they arrive on day one excited and ready to give it their all, that is a benefit to the company. If they are constantly wondering if they made the right choice in giving up their desired salary, they will not be able to bring their best work. It is important to remember that salary is not just a number. It is how employees pay their rent and provide for themselves and their families. It is only a matter of time before an underpaid employee feels the stress of the money they gave up to take the position.

Better positioning in the market

The attitude of getting an employee for as little as possible doesn’t take into consideration the value of the skills that an employee brings to the organization. Every job has a required skill set. Those skills hold a quantifiable value in the job market. If you are going to stay competitive, the pay range should be equal to what the market dictates. This is a change from a common model of valuing years of service and annual raises over what the job requires and what the market calls for. Whether a candidate has one year of experience or five, the job requires the same skills.

All these reasons are why we recommend that our clients include a salary range with all job postings. In the end, it allows them to more efficiently find the candidates who best fit their company and the open position. A transparent approach to hiring makes for happier, more content employees who have found what they were looking for in all regards. In the end, being open about pay range is the way to make sure that everyone wins the salary game.

If you need help evaluating your hiring process and increasing salary transparency, contact the WhyHR team to schedule an initial discussion and discuss how we can help.

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