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Is it time to start including comp ranges in job postings?

Compensation ranges can positively impact diversity and inclusion efforts, but may also lead to disappointment for others.
By: | September 24, 2019 • 2 min read

While many organizations often cite a “competitive salary” in their job postings, the lack of an actual salary range can often leave qualified job seekers looking elsewhere.

Indeed, according to recent LinkedIn research, the networking site showed 450 of its members an example of a job description and asked them to highlight parts they found helpful, appealing or would make them more likely to apply. The clear majority (61%) said that salary range and benefits are the most helpful pieces of information on the entire job posting.

But a quick look at the job boards will demonstrate that most organizations have yet to embrace the idea of sharing compensation ranges in job postings. And that may help to explain the recent Fast Company post by Lars Schmidt, who argues that “the time has come” for more organizations to share such ranges.

Liberty Mutual, Buffer, Publix, Enterprise Holdings and Basecamp, all include compensation ranges in their postings, Schmidt writes, adding that Buffer even provides a transparent salary calculator to help candidates understand how their compensation compares to the cost of living.

But Alan Johnson, managing director at Johnson Associates, a New York-based compensation-consulting firm, says he’s “leery” of including a salary range in job postings. He’s more open to the idea of companies publishing a data point—like a minimum salary—instead of a range because it’s all about managing expectations.

“If you hire someone but their salary is not at the top of the range,” he says, “then they are going to be disappointed, and that’s not a great place to start working.”

The comp-range approach could also prove beneficial for some companies, Johnson adds.

“If the range for a job is $60,000 to $90,000,” he says, “there may be a few people who would have been turned off at 60k, but you might get a few more candidates at 90k. You may get a few more people into the funnel because they are turned on by the top part of the range.”

Johnson says he expects to see more companies adopting the comp-range approach in the coming years.

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“I think, with all the work on income equality and diversity, it’s going to increase in usage,” he says. “The perception is that adding comp ranges will help us treat groups more fairly. Whether that’s a good idea or not, we can debate. But it’s certainly a trend that’s going to increase.”

Catherine Hartmann, the North America Rewards leader at Willis Towers Watson, agrees. “If you are looking to be more inclusive and diverse in your hiring pool,” she says, “more openness regarding the compensation ranges in your job postings may be the way to go.”

Given that, statistically, women and some minorities are less likely to negotiate their salary, she says, the move to be more transparent can support efforts for a broader set of potential new hires by taking this negotiation off the table. “Organizations still need to put mechanisms in place that focus on D&I to attract a broad spectrum of employees,” Hartmann notes.

As salary-history questions continue to slide out of favor (and legality) in many areas, Hartmann says, employers are looking for new ways to talk with candidates about compensation.

“The latest data from Willis Towers Watson’s U.S. Compensation Planning Survey indicated that, while only 26.2% of companies are currently fully transparent with employees regarding the range of compensation for their current salary band/pay grade, this number jumps to 59.8% when you ask these same companies what they are considering implementing in the future,” she says. “The movement towards greater pay transparency is today’s new reality.”

Hartmann advises HR leaders at organizations implementing a comp-range policy to have a communication strategy  in place “that is mindful of both the advantages and disadvantages” of being more transparent.

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“Before making the change, be sure to do your homework and have a solid understanding of what is market prevalent and where market trends are headed,” she says. “Know what your talent competitors are doing, ensure that the change aligns with what is best for your attraction and recruitment strategy, and have a strong administrative process and tools in place for managing questions regarding going more transparent.”

Ultimately, Hartmann says, the trend toward transparency could render current efforts at transparency moot, citing a recent Glassdoor list of the highest-paying organizations and top-paying jobs on its platform for 2019 that includes the median total salary for each of the top organizations.

“So, whether a company decides to publish their compensation ranges themselves thoughtfully or have its information displayed online for them by outside parties,” she says, “this question may not be relevant in the distant future, as compensation-range data becomes more readily available and accessible to candidates.”

Web Editor Michael J. O’Brien has been with HRE for more than a decade and holds a degree in economics from Boston College. He can be reached at [email protected]

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