There’s an age old question which divides many recruitment and talent executives: when advertising a role, should you include the salary range in the advert?
Recent research demonstrates that fewer than 20% of Australian businesses include salary ranges when they advertise. What’s the logic here?
I surveyed some Morgan McKinley colleagues, and asked some of my connections currently working in internal talent functions. It turns out, this proposition is even more divisive than predicted! I know I have my opinion (strongly in favour of including salary on any advertising, in case you are wondering), however, in the interests of fairness, it seemed worthwhile to unpack both views, and compile a list of ways the lack/inclusion of salary might affect the recruitment process.
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Attracting more/better candidates
The argument goes like this: the higher the salary attached to a role, the more applicants (and therefore by default, the higher quality applicants) there will be. If there’s no salary on the ad, great candidates will gamble, and submit applications anyway, and once they hear how amazing the role is, they’ll go for it, even if it is below their target package.
There’s no dispute that a Strategy Manager position paying $200k will garner greater attention, and a larger number of applications than one paying $150k. A Strategy Manager position with an unspecified salary might attract pretty much the same number as the high paying position - and a broader pool of applicants ultimately means a better hire, right?
The risk of attracting candidates who sit well above/below the band (which you WILL do if you don’t put the salary on the ad) is that you’ll waste time wading through those whose experience doesn’t fit the bill, and will struggle to find the few who do.
How much you should be paying?
In practice, I’ve found that candidates broaden their own search horizons and start their search outside their desired rem range, based on the criteria that matter most to them. Countless $200k candidates have applied to roles I have advertised at $170k or $180k, because the opportunity sounds so appealing on those other fronts.
Transparency may mean a slightly smaller pool of candidates apply to your roles, but those who do will be totally happy to accept the salary on offer, and are less likely to pull out or turn down an offer because the ultimate package is just too low. And we all know that the talent acquisition game is deviating heavily away from a volume game - it’s QUALITY, not QUANTITY of candidates, which most impacts the ultimate hire made.
Visible salary = smaller applicant pool, but applicants are likely to be more engaged and likely to accept the position at the end of the process!
Setting expectations up front
Needless to say, candidates can get very frustrated if they think they are in process for a role which falls within their target rem range, and it ends up being far too low. Flagging the range upfront eliminates this wasted time - and avoids burning those bridges!
One of my favourite pieces of advice to share is that salary is much more than dollars which hit the bank account - the salary attached to a role is a good indication of the level and responsibilities of the position, and where it fits in the overall structure of the business.
While there are some deviations to the rule (e.g. the world of the start up or scale up, which may be very light on base salary, but involve unpredictable elements like equity), generally speaking a larger salary package means a more senior position. Heads of Strategy earning mid- six figures should be wary of a $250k role, as it probably won’t offer the remit and seniority that candidate is seeking!
Salary is not the only metric which can indicate the level of a role, but it is an important one!
Upfront declaration of salary avoids wasting time, yours and theirs, by ensuring applicants will have roughly the right level of experience for the position.
If a business sets an upfront salary (or range) in advertising a role, they create an ‘anchor’ to which any future negotiations are tied. If a candidate is earning significantly less than this range, he/she will still be focused on that number initially put forward, so many recruiters or businesses worry that they will be forced to pay more than the candidate would otherwise expect.
There’s a quick fix here: be transparent around exactly what parts of a candidate's background or experience are absolutely necessary to warrant the top end of the salary range. Yes, the ad says $150k - but for that, we are hoping for X, Y and Z.
The salary stated up front should be adhered to where possible, but if circumstances change, or the perfect candidate can’t be located, it’s OK to deviate as long as good reason is given, and the candidate is aware of why an offer might not come to originally stated level.
And if you think you can sneak in a Ferrari candidate for a Ford budget, by paying well below market or misleading a candidate about the going rate for the role they are considering - there’s a world of information out there, including Glassdoor and indeed insights, which will quickly give the candidate and indication of his/her market value.
The stated salary creates an anchor for negotiation, but isn’t binding on either party. There’s no point leaving salary off to try and pool the wool over an underpaid candidate's eyes - he/she will quickly see through the ruse.
Looking for candidates?
This one applies less to an external recruitment agency, and more to a businesses directly advertising roles: salary information displayed on a job ads is obviously public information, and if there is any sensitivity around how employees are remunerated, this can cause concern.
There’s no quick fix here, bar examining internal business culture and why there has to be such a level of secrecy around salary is probably a good start! If this role is paying well above/below it’s peers in the business, there’s either a good reason for that - or there’s an internal challenge to be addressed.
There is no simple solution here, so the best advice would be to either state clearly in the ad why this role deviates from the internal salary structure. Or perhaps take this queue to examine internal transparency and conversations around staff pay.
Finally, a simple statement of fact. In order to sponsor an international applicant’s visa in Australia, the business in question must first provide evidence it has first advertised the role twice, with visible salary, on nationwide job boards.
So, if there’s a chance that the candidate who ultimately takes the position may require international sponsorship: you must put a salary range on the advertisement.
To include, or not to include, that is the question!
To share some closing thoughts, and summarise the pros and cons:
Including a salary range on an advertisement:
- Attracts a smaller pool of candidates who would be more likely to accept at the indicated salary level
- Aligns the level and seniority expectations from the outset
- Anchors both parties to a range for negotiation
- Is critical in offering visa sponsorship to a successful offshore applicant.
Hiding the salary range:
- Can prevent some awkward internal conversations about why this role pays more/less than its peers
- Might attract a larger, more senior, and more skilled applicant pool - but there’s no guarantee they will actually be interested or negated when they learn the real package on the table.
I know my perspective, and will continue to take the same approach to salary conversations - clearly establishing the range with the candidate and making sure it meets his/her expectations to move, then taking the conversation in a much more interesting direction towards team, business, opportunity and growth!