Wouldn’t it make everything so much easier if the salary range was posted in every job posting? I speak to many candidates who ask me that exact question and yearn for salary transparency.
Because of this, I posted a survey just before the holidays asking which of a few options would improve the hiring process the most. The choice that got the most votes? ‘Salary range on job postings.’ 63% (!) of my network voted for that one. It was a landslide victory because the number two choice – ‘Move as quickly and efficiently as possible’ – only got 19% of the vote.
As a recruiter who has placed many sales professionals, I see both sides of the debate. Stay with me on this one. I promise it will be worth it – especially if you’re in sales.
A hot topic… why?
Why is that such a hot button issue? I think it’s partly because talking about money makes many people uncomfortable. The way salary transparency manifests today is awkward. When you’re interviewing for a job, are you comfortable asking what it pays? How about when the interviewer asks you what your salary expectations are?
Within the sales industry, this is so common. What’s also common are ridiculous job postings that are being forced to fit a square peg into a round hole. When there is a job that has multiple revenue streams, providing a salary bracket is a shifty game of whack-a-mole.
Many of my client sometimes provide me with a base salary bracket that reads way below market value. However, that base salary sometimes accounts for only 50% of a candidate’s earning potential. Once you tack on the commission structure, benefits and anything else included in the compensation package, that salary bracket is the most misleading part of the job posting, and yet, the one thing that turns off potential candidates the fastest.
The latest news in this arena is that government is stepping in and trying to regulate this.
Laws and unintended consequences
If you would prefer to see salary ranges published in every single job posting, you’re not alone. In fact, so many people have been asking for it that in three US states, it’s now the law. That’s right, a job posting in Washington, Rhode Island and California must include the salary range, or the company is breaking the law.
I’ll put my foot down on this: I think it’s a bad idea. It’s an overly broad solution to a problem. And like most overly broad solutions, it’s creating unintended consequences. To remain compliant with the law, Tesla recently advertised for a software engineer who’ll make somewhere between $83,000 and $417,000 per year. Not to be outdone, Netflix posted a couple of jobs, one with a range of $90,000 – $900,000, the other from $50,000 – $600,000.
The folks who make laws aren’t done there, either. There are a host of states where it’s illegal to ask what a candidate is earning at their current job, or earned at their previous jobs. I understand the thinking: what you’re making now doesn’t necessarily have a bearing on what you might earn at your next job. But is a law really necessary?
I’m glad that these laws haven’t made their way to Canada yet, and I hope they don’t. Legalities aside, let me tell you why I think that salary transparency isn’t the panacea that it might appear to be.
What’s wrong with salary transparency?
To begin with, there are a lot of people whose base salaries are only part of their total compensation. In some cases, a relatively small part.
Take salespeople, for example. A sales position that is heavily oriented towards commission earnings often has a surprisingly low base salary (if there’s a base salary at all). The idea being that the base ‘keeps the lights on’, but the real earning potential comes as a reward for sales performance. Publishing the salary for a position like this is misleading, as it can appear that the compensation is far too low to attract anyone with experience. And publishing the total earnings runs the risk of overinflating the potential, since the top end of the range is achievable, but only with exceptional results.
Salespeople aren’t the only ones for whom salary is only a piece of the puzzle.
Senior executives often have compensation packages that offer far more than the base salary suggests. There may be bonuses based on personal performance, as well as company performance. There may be a generous car allowance, or a company vehicle included. Gym memberships to promote wellness, or club memberships to facilitate networking, are sometimes thrown in. Stock options are part of the package in the case of publicly traded companies, and in private companies, the executive might earn equity over time. Put all these together, and the base salary can be a surprisingly small part of the overall picture. Pretty difficult to publish all of that in a job posting, especially when some of the elements are variable.
Compensation transparency needs clarity
Putting aside those kinds of compensation packages for a moment, there’s also a clarity issue when it comes to compensation transparency. Frankly, it’s often confusing.
In one recent search, I was recruiting for a senior HR leadership position. The low end of the range, to attract the level of experience I was looking for, was $100,000. The company was very flexible with the top end of the range, to the point that they could – theoretically – pay pretty much whatever the candidate expected … provided they were the perfect candidate. Meaning that they would have to ‘check all the boxes’. Bring literally everything the company was looking for, and more.
So I did the only logical thing. I posted the range as ‘$100,000 +’. Want to guess what happened? Nobody noticed the ‘+’.Speaking with a few potential candidates who brought really solid experience to the table – the kind of experience that would have pushed the upper end – they weren’t interested. They saw the published salary, and told me that they make quite a lot more than that, so they were sure the company wouldn’t be interested. I was able to turn some of them around, but it took some doing.
What about everyone else?
It’s not only high earners that aren’t always well-served by published salary ranges. There’s another issue that affects people at both ends of the spectrum equally.
Large companies that hire lots of people for the same position (customer service staff in a call centre, for example) usually have very fixed ranges in place for those positions. In smaller companies, though, there can be a lot of flexibility around the definition of a position, and the compensation attached to it. Working with those companies, we’ll start recruiting for a set of skills and experiences. And sometimes candidates surface who aren’t exactly what the client initially had in mind.
They might have more experience, or unexpected complementary experience, than the client was looking for. Sometimes in those cases, we’ve expanded the responsibilities of the role or made it a bit more senior, and paid more than the original position would have paid.
In other cases, a candidate hasn’t had quite as much experience as the client was thinking about. They might consider a more junior person who has the smarts and the drive to be developed into the perfect employee for the job over time. An employer can partner them with a mentor who can help them grow.
In either of those cases, a published salary range would have meant that the people the company hired would never have applied. The person with more experience would have seen a range that was lower than their expectations. The more junior person would have seen a range that indicated (correctly) that they didn’t have the level of experience needed. A published range just can’t communicate the level of flexibility that an employer might have.
So why the rush to legislate, then? I have a theory. In government, salary ranges are absolutely rigid, with no flexibility whatsoever. Public sector positions have a fixed salary range, down to the cent. The people making these laws live in that world. A world where there’s no ‘wiggle room’ for the level of a position or what it might pay. A world where everybody knows what everybody else makes (at least within a set range). Many of them likely haven’t worked in the private sector, where you need that kind of flexibility and nimbleness to survive.
As I said before, it’s an overly broad solution to a problem. I think there’s a better answer.
What is the better answer?
It begins with restoring trust. When a recruiter (or anyone in a hiring position, for that matter) asks what your salary expectations are, it’s not because they’re trying to lowball you. An employer wants to hire the best person possible for the job. If you’re the right person, and they know what your expectations are, they’ll do their level best to meet them. I know this is true because I see it happen every single day. When you’re working with a recruiter – someone in my position – it’s even clearer. Some might say that I have a vested interest in getting you the highest salary possible, since my compensation is based on that.
Similarly, when you ask someone what the salary range is for a given position, trust that they’ll tell you what they can. I do. If someone asks me the salary range, I’m as open as I can be. If there’s a ceiling, I’ll tell you that. Especially if it’s not going to meet your expectations. Why would I waste both our time talking more about a position that’s not going to be a fit? If there’s a low end that’s higher than you’re looking for, I’ll tell you that, too. Maybe you’re not earning as much as you should. If you’re qualified for the position, why wouldn’t I want to see you increase your earning potential?
The bottom line is this. If you don’t believe that a recruiter, or an employer, has your mutual best interests at heart, there’s a fundamental lack of trust in that relationship. If that’s the case, you should probably be working with someone else.
Let’s talk about money… and trust
One final note. The work I do puts me in a position to help you make sense of the compensation landscape. At any given moment, I have a real-time bird’s eye view of the market. What companies are paying for a certain level of experience, in a particular kind of position, in a specific location. If you’re an employer trying to define a competitive compensation range to attract the talent you need, I can help. And if you’re wondering if your salary expectations are too low, too high, or right where the market is paying, I can help with that, too. Feel free to get in touch with me, and let’s talk dollars and … sense.