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Pay transparency is all about equity.
While it is becoming increasingly common to speak openly about compensation in professional settings, new hires need to know how they can realistically fulfill all of their needs, their family’s needs, their financial aspirations, etc.
Transparent hiring strategies ensure that new hires know what to expect from the company. Providing a candid estimate of annual pay during the interview process allows the new hire to calculate personal expenses, look ahead to bills, and form realistic expectations of how they will be compensated for what they bring to the table. When new applicants are asked for their current or previous compensation during the interview, the hiring manager or consultant is able to be more respectful of their time.
“Compensation” is meant for that, and it is a rather self explanatory concept. Bases are pre calculated in order to “compensate” an individual for their role based on their experience and skill level. Clear communication about compensation within the company is made infinitely easier to accomplish when there is a limited degree of variance in the pay-scale.
On the other hand, there is always the potential for company culture to suffer. When employees or team members possess knowledge of how others are being compensated compared to themselves…Tension can linger in the workplace. It is crucial to be careful when having a conversation about money. It can be a sensitive topic.
Some people don’t feel comfortable sharing their salary. That should always be respected without further question in professional settings.
There is no such thing as “too transparent” necessarily, but there are some elements to consider. If applicants’ have the capacity to conduct initial research about a company and see their role’s annual base with little detail about the role itself, candidates may rule out the option all together because of the pay, and contact others within their existing network instead. They may miss out on a fantastic opportunity to get involved in a field they are passionate about.
Perhaps someone is applying for an engineering role and sees the base salary wondering how it could possibly be so low. They may wonder……“Is my skill set really worth that little?” If the applicant decides to go through with their interview and the hiring manager ultimately decides that their experience is senior level , they may be offered a higher salary for the position.
After all, the interview process is designed to get a deeper understanding of what is visible in the applicant’s resume, cover letter, etc. The interview process is a chance for the hiring manager to get an impression of the applicant and evaluate If:
- They are a good fit
- Their experience is a match for the skill set needed
These two things are imperative and must come first. Company betterment is about the experience the candidate brings, not their financial expectations. If both of those apply and they are a strong candidate, pay can be considered thoughtfully to ensure the candidate content with the compensation range provided.
Transparency can exist in the recruitment process without ruling out strong candidates as long as it is done right and handled with respect. Sourcing and outreach to relevant candidates can help keep expectations as aligned as possible between interviewer and interviewee. For a consulting company such as Vacaré Group, the steps towards transparency could depend on a client-to-client basis. Every company requires a customized strategy.
Internationally, companies are working towards a balance. The workplace will ideally be a place where people are comfortable with sharing their compensation and benefits openly, but every new hire who checks the boxes for the role will be considered carefully and given the opportunity for an initial interview, regardless of previous pay. You never know what that individual is looking for until they have all of the overarching details regarding the role.
If you are looking to learn more about pay transparency, visit our Contact page to learn more about how Vacaré Group can build your team while you build your company.
