Sunday, February 25, 2024

“Competitive” is not Always Competitive or Equitable When Dealing with Salary: Adrian Russo

Opinions cannot be wrong.  Words like, “competitive” and “market-rate” are often used to describe the salary in a job description.  But what does “competitive” really mean?  Terms like “competitive” and “market” are entirely subjective in nature.

According to a recent study by Reed, an international recruitment agency, 78% of candidates said they are less likely to apply to a position that does not include the specific salary in the posting.  In the competitive climate of the “Great Resignation,” this places companies that are not forward-thinking at a disadvantage.  Moreover, failing to include salary in the job description does little to promote a fair and equitable climate for internal and external candidates.  Internal candidates who joined organizations during lean years are left wondering if they are compensated at a lower rate, while external candidates wonder if it is worth their time apply to a job only, to find out that the compensation is significantly below their expectations.  Uncertainty creates movement and not always in a good way. 

Even if your company is not inclined to follow the candidate market, which can raise red flags for candidates, they should stay in front of trends in employment law.  States and cities such as Colorado, New York, the District of Columbia, and many others either have or are passing legislation that requires compensation to be listed in the job posting.  With such a strong movement to list compensation in job postings, it makes sense to adopt sound pay policies in the near term.  At some point in the future, most states and cities will impose some aspect of pay equity laws. 

One of the first steps to creating a fair and equitable pay structure is to develop “pay bands.”  This is a progressive system of pay rates determined by job family, seniority level, and specific function.  Pay bands outline important compensation items for each position such as base pay, bonus, and, if applicable, equity.  A pay band structure provides for internal and external equity for all individuals joining the organization regardless of subjective factors.  In short, all people who join the organization in a specific role at a certain level will be paid the same.

When all individuals are compensated at the same level, it is easy to be transparent.  Organizations should not fear transparency but rather embrace it.  In 2022, candidates have plenty of open-source resources available to determine what is fair market value for their services. Websites such as and offer fairly accurate pictures of compensation.  Candidates have tools to determine what organizations pay for similar roles.  Failing to post the salary in the job description is not a competitive advantage – it is a disadvantage that can cause skepticism at a time when you need to earn trust with your potential new employee. 

A common retort to listing the salary in the job description is, “we just cannot pay what our competitors can offer.”  That’s fair.  In my experience, money is rarely the biggest motivator.  People appreciate honesty.  They seek out genuine organizations they can trust.  Take that first step in building trust by doing the small, easy things.  List comp and benefits in the job posting. Your current and future employees will thank you.
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