4 min read
Finding qualified workers is more challenging today than ever because of the skills shortage. Recruiting processes need to be designed to be lean and barrier-free so that interested applicants do not drop out under any circumstances. And alongside identifying suitable candidates as effectively as possible, approaching them convincingly and selecting without discrimination, recruiters are currently preoccupied with another topic, at least in the German-speaking world: salary information in job adverts!
But why does this topic polarise so much? In Austria, salary information in job adverts has been a legal requirement since 2011. This only covers the minimum pay on offer, but possible above-minimum pay is often stated as well. In Germany, salary information in job adverts is only known for positions in the public sector, where at least the pay grades are communicated. Increasingly, however, job platforms such as StepStone and business networks such as Xing are also publishing salary estimates. Unfortunately, these are sometimes of questionable quality and lead to misjudgements.
What are the advantages and disadvantages of publishing salary information in job adverts? We explain in this magazine article.
Advantages:
Equality and fairness
When employers communicate the salary range transparently from the start, applicants are better placed to assess the job offer in the context of their qualifications and professional experience – regardless of their gender, ethnicity or other factors. Stating salary ranges therefore also reduces the risk of discrimination and creates a fairer basis for negotiation. This transparency promotes equal opportunities.
Saving time and resources
Open communication of salary information in job adverts saves time and resources – for employers and applicants alike. By disclosing their salary expectations from the outset, companies allow applicants to decide immediately whether the offer matches their financial expectations. This avoids unsuitable applications, makes the selection process more efficient and leaves more time to concentrate on those candidates who find the company's pay structure appropriate. This transparency also avoids disappointment at the end of a long selection process.
Appeal to potential talent
At a time when competition for qualified workers is increasing, openness about pay also signals a high degree of trust and authenticity. Applicants feel more drawn to companies that provide clear information about salary from the start, thus creating a solid basis for negotiation. This transparency therefore reflects well on the employer brand.
Despite the many advantages, there are also some challenges to bear in mind when it comes to stating salaries in job adverts.
Limits on attracting top talent
Stating salaries in job adverts can limit employers' room for negotiation. If the pay range is communicated from the outset, companies give up the flexibility to make individual arrangements or to win outstanding candidates with higher salary demands. The latter will probably not apply in the first place. In the worst case, this can limit the ability to attract top talent. It is therefore important to leave sufficient room for negotiation and to take individual needs into account.
Inflated expectations
Transparency about salary before the actual selection process carries the risk of inflated expectations. If interested applicants know from the start the maximum an employer is willing to pay, they may demand that maximum even though their actual salary expectation was originally lower. This in turn can make salary negotiations at the end of the selection process more difficult – especially if applicants have mentally prepared themselves for the higher salary, but the employer is not willing to meet that wish given the applicant's qualifications and experience.
Distortions of competition
Finally, stating salaries can also lead to distortions of competition. This could particularly affect smaller and mid-sized companies (the German Mittelstand), which usually pay somewhat lower salaries than large corporations. If one company states higher salaries than its competitors, applicants quickly start searching only for offers above a certain pay range. This would be a particular problem for companies with limited financial resources – not least because, besides salary, there are many other benefits that can more than make up for a somewhat lower salary.
What our own recruitment experts say on the subject
Our recruiters believe that salary information in job adverts is becoming ever more relevant. They also cite the aspects already mentioned, such as time savings through faster processes, higher response rates from the candidates they contact and increased motivation to make a career move. However, they also note that salaries paid vary considerably – by industry, by region and also by company size. Smaller companies in particular could be at a disadvantage here.
