Wage transparency on job postings – yay or nay?
by Michele Majul-Ibarra
You may have already heard about a new bill in the Province of Ontario announced by Labour Minister David Piccini that could soon mandate employers to include the expected salary or pay range in their job postings. The bill would also require employers to disclose if artificial intelligence (AI) is part of their recruitment process.
Ontario is not the only province in Canada moving in this direction. The Government of British Columbia has also initiated a policy for employers to ensure pay transparency. The BC Pay Transparency Act was passed into law effective November 1, 2023.
Salary in job postings is an age-old debate but it certainly continues to evolve with our changing workforce. With more and more millennials and younger workers open to discuss the amount of money they can make compared to their older counterparts, many employers are becoming more open to include the salary or pay scale in their job postings. As a matter of fact, if you go on Linkedin or Indeed, you will notice the pay or salary posted on most job advertisements. While there is more demand from prospective job applicants to show salary details in job postings, deciding to post the wages is not taken very lightly by most employers. There are a few factors they first need to consider.
Employers are generally looking for qualified and skilled candidates, but they also want people who are a good fit for their organization. When wages are posted, the tendency is for candidates to focus on the pay versus considering all the other benefits that the organization can offer, such as a good pension plan, opportunities for advancement, educational and wellness incentives, to name a few. While pay is very important, people tend to disregard the big picture and consider other important details. As a result, employers may not be able to retain new hires if the culture and environment were not adequate or suitable for them in the first place.
New employee envy
This goes hand in hand with retention, but in relation to existing employees. When the current employees can see how much new hires will potentially be making, it can result in low morale, which could potentially result in resignation. Employers typically have a rationale for how much they compensate each of their employees. As an example, if an employee has more credentials and experience over another employee, the employee with more credentials would probably be paid higher. Unfortunately, not all employees would agree with this rationale.
Size of the company and type of industry
Posting the wages can lead to competition among employers within a specific industry, which is a good thing. But on the other hand, this is problematic because smaller organizations may not be in a position to offer a wider salary range or higher salaries compared to big corporations.
In the midst of disadvantages for some employers, including the salary or wages in job postings can also result in positive outcomes. For one, it can promote openness and trust. I mean, who would not want to work for an organization who has been transparent right from the start? Job applicants would also be in a better position to negotiate their salary. Disclosing the wages would also be a way for employers to show their commitment to ensure equality and show their interest to narrow the wage gap. With a constantly evolving workforce, we can expect more discussions and debate around this topic.
This article is intended for information purposes only and not to be considered as professional advice.
Michele Majul-Ibarra, IPMA-ACP holds an Advanced Certified HR Professional Designation with the International Personnel Management Association. She is a Senior HR Consultant in the public sector.