Pay transparency is crucial in competition for talent

Competition for talent is fierce. And with the majority of candidates less likely to apply for a role that doesn’t specify salary, it’s clear transparency is vital if you want to attract a strong workforce.

The UK has an uneasy relationship with pay transparency. The majority of job ads fail to include pay ranges – despite this limiting the scope of applicants. And even if candidates do decide to apply, the dialogue around wages is often out of bounds within the workplace. 89% of UK workers said they would feel uncomfortable asking a colleague what they earned. And shockingly, one in five employers ban their staff from discussing pay – despite it being a legal right.

Employers who hide salary insights on job ads often do so out of insecurity that their rates won’t stand out in a competitive market. And employers who clamp down on salary discussion at work often do so out of fear that comparisons will lead to bitterness between staff, accusations of unfairness, and a mountain of pay rise requests.

It pays to be open right from the start. With candidates reluctant to apply for a role without salary details, can you afford to leave this out? In an already tough job climate, you could end up with zero applicants.

Listing salary on job adverts means you’re being respectful of your new hire’s time – setting the precedent for a more respectful relationship. Plus, you avoid wasting your own time if the candidate later drops out because the salary doesn’t meet their expectations.

At a minimum, it’s good to at least provide a pay bracket. That way, you have wiggle room for flexibility depending on the applicant’s experience.

If you worry your competitors are offering more, ask yourself how you can compete. If higher wages aren’t feasible, can you offer something beyond financial compensation?

Flexible working or a more generous holiday allowance can leave your workers with a better take-home pay or work-life balance. Plus, perks like cycle-to work schemes can knock a considerable amount off your workers’ bills.

Sharing these details alongside salary information can help encourage more applicants.

As for transparency within your business, consider rolling out pay bands. A pay band defines the range an employee can earn, based on factors like seniority, longevity, or responsibility.

Being open about these pay bands should stimulate productivity within your workforce. Because when staff know there’s value in progression, they’ll take steps to improve their performance. When staff know there’s value in loyalty, they’ll stay.

Instead of clamping down on any pay discussion, encourage it. Use it as a tool to promote progression and hard work within your business. When your pay structure is fair, competition between staff can only be a good thing. When the path to a pay rise is clear, your staff have a choice – to pursue it or not.

As economic pressures escalate, your staff will undoubtedly want to check they are earning as much as possible. This means they’re more likely to either ask for a raise or see if the grass is greener elsewhere.

The total cost of replacing an employee can rack up to thousands when you factor in training and recruiting fees. So, it really does pay to keep your current staff.

For so long, talking about money at interview and in the workplace has been taboo. As more companies start to embrace pay transparency, the younger generation now expect such discussions to take place. So if you want to build a successful workforce, the question isn’t whether you should be more open. It’s whether you can afford not to be.

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