4 Reasons for Salary Information in Job Advertisements

4 Reasons for Salary Information in Job Advertisements

It is becoming increasingly important to show transparency about remuneration in job advertisements. Read here the reasons for this. […]

Let’s get the truism right to the start behind us: the salary is one of the most important factors for applicants when looking for a job. In practice, it is of course not the main motivator for a change of employer in the vast majority of cases. However, in most cases, in addition to the location of the new employer, it plays the role of the most important hygiene factor in the job search, which – if all the other framework criteria of a new position fit – decides on success. This makes it all the more important, especially in candidate-driven markets, to take into account the wishes of the highly sought-after experts.

Although various surveys and studies show that applicants want a salary in job advertisements, this is in short supply in practice. Just ten percent of companies report a salary range. This is particularly surprising in view of the fact that a significant proportion of potential candidates do not apply for the relevant positions by omitting this information. For example, 74 percent of respondents would like information on salary and 60 percent would rather opt for a job advertisement with information on remuneration.

Especially in the highly competitive IT sector, where more than 80,000 positions remain vacant despite Corona, these figures mean a clear disadvantage for recruiters and IT managers. If we also take into account that this situation will continue to worsen in the coming months and years due to demographic developments, the effects of this behavior will become even more detrimental. I do not even touch on issues such as the gender pay gap. But why do employers deprive themselves of one of their most important advantages in job advertisements, which has been proven to be highly relevant for a large number of potential applicants?

It seems that many companies are worried about what a transparent approach to the expected payment could mean. In conversation with human resources and IT departments, I am usually given one of the following reasons for this behavior:

  • Maximize Flexibility for Salary Negotiation (Bargain shooting)
  • Maximize the number of applications (Optimize recruiting funnel)
  • Internal Salary Hygiene (Avoid Bad Blood)
  • Market Research (Overview)

Let’s look at them in more detail together.

It is understandable that profit maximization takes place at most companies not only in the purchasing or sales process, but also in recruiting. Accordingly, many HR and hiring managers consider it advantageous not to mention a framework for the annual salary in advance in order to gain room for manoeuvre in salary negotiations. The fear is that the mention of salary information in job advertisements could drive up the salary expectations of candidates.

That may be. However, there are ways to make it clear right from the start that the annual salary depends largely on the individual work experience. For example, by specifying the salary frame in the job advertisements as experience-dependent. This makes it clear to applicants that the specific salary will then be specified in a personal interview. So they are transparent and still retain the necessary leeway.

There are also points that run counter to this approach of” bargain shooting”. On the one hand, through social business networks, headhunters and various salary studies as well as portals such as kununu and Glassdoor, applicants now have many opportunities to assess their market value. The information asymmetries that existed a few years ago are in the process of dissolving. As a result, such an approach usually increases the turnover of the affected companies, especially among good employees. In this case, you are allowed to incur the costs of searching at shorter intervals than if you offered an attractive salary from the very beginning.
The associated loss of image, which naturally occurs promptly in a narrow market and its influence on the prospects of success in recruiting, I leave completely out of this consideration.https: / / computerwelt. at / news / xing-or-linkedin-which-career-platform-is-better/

Another reason that is often mentioned to me in the context of salary transparency is the recruitment funnel. In short, this is about maximizing the number of incoming applications and filtering them down in the course of the conversations – until the optimal beewrber remains at the end. According to this procedure, the more candidates apply for job advertisements, the more likely it is that the appropriate profile is included.
This model may well be suitable for employer-driven job markets. In practice, however, I strongly advise against this, especially for senior SAP and IT positions. The goal here should not be to reach as many as possible, but a few suitable candidates.

On the one hand, the job interviews cost time and resources for all parties involved. If applicants who are well above the advertised fee do not apply, the recruiters and hiring managers are equally relieved. Even more important, however, is the perception on the candidate market. The preparation of the application documents and, if necessary, the cover letter and the entry in various portals alone costs applicants on average at least 30 minutes per position. If there are additional interviews, we can estimate at least two and a half hours per interview, including organization and implementation. What effect do you think it will have on senior candidates if they spend hours of their time on a vacancy where a reference to the topic of earnings would have saved a lot of time and nerves in advance?

Since this is also being talked about in the candidate market – senior saplers are often excellently networked – employers not only invest unnecessary time and resources in this context, but also cause avoidable damage to their company image.

With regard to salary transparency, some employers are concerned that their existing team members may feel underpaid in comparison. The consequences of this would be, on the one hand, a potential demotivation and disputes à la “Why does he/she get more than me?“ On the other hand, the potential increases that this increases the willingness to change and fluctuation.

I can fully understand this point. However, he does not take into account that his own employees also have the option of finding out about customary salary structures. Realistically, assume that most of your SAP consultants receive at least two to three headhunter inquiries per week via XING or LinkedIn. Therefore, even if you do not openly communicate the topic of salary, it will still eventually penetrate to your employees. The consequences are the same. With the serious difference that they give the opportunity to moderate the expectations and embed them in a context.
Open communication in conjunction with clear targets and goals for a meritocratic salary increase does more here and also acts as an employee-binding measure.

Last but not least, there are some contacts who are not sure about the market conditions. They first want to wait for the return to a position and develop a salary framework based on this.

I strongly advise against this. On the one hand, they discourage job seekers. On the other hand, there is also the opportunity for companies to get an overview via personnel consultants, social networks and salary studies.

You notice, I’m an advocate of salary transparency in job ads. Not purely out of moral conviction, but above all because the number of suitable candidates is blatantly higher. And in addition, the perception on the candidate market is a much more positive one, characterized by fairness and communication at eye level. This automatically makes the conversations more valuable and productive, which ultimately saves your time and money.
The times of applicants as petitioners are over in IT and will remain so for the foreseeable future. If you are not sure if this is an option for you: start at least one A/B test and wait for the results.

* The author is a headhunter by passion. With many years of experience, tens of successfully mediated experts and thousands of conducted interviews, he draws on in-depth practice know-how. His focus is on IT positions in the fashion and retail industry.

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