Pay transparency in C-suite job postings is increasingly becoming a necessity
Pay transparency in C-suite job postings is increasingly becoming a necessity

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Discussions about salaries were once a dirty little secret. Whether it was between colleagues, a job applicant and the hiring manager, or friends, conversations about the pay on offer were hush-hush. However, conversations about money appear to be more open lately and some believe they have the EU Pay Transparency Directive (that came into force in June 2023) to thank it for.

When it comes to executive recruitment, there’s an ongoing debate about whether including the pay range or the starting pay in job advertisements is a good idea. The pay transparency requirements entail that employers must inform applicants of the pay range or starting pay either in the job posting or prior to the interview. This means even if the job advertisement doesn’t mention it, the candidate will come to know about the pay on offer before the interview.

Thus, the question remains – should C-suite job advertisements embrace pay transparency? Let’s examine the views of those standing at the opposing ends of this debate.

Those Favouring Pay Transparency in C-Suite Job Postings

Executive candidates, many of whom may be passive candidates, prefer a hiring process that’s equitable and transparent. To them, the inclusion of salary information in job advertisements indicates that the hiring process is transparent and fair.

Additionally, pay transparency is widely considered a best practice for DE&I as it indicates the organisation’s stand of not underpaying or overpaying its employees based on factors such as gender, race, ethnicity, or other characteristics that should not impact pay. Thus, pay transparency in executive job postings is believed to increase the number of diverse applicants, which can act as a positive driver of top talent acquisition and retention in addition to building a favourable work culture, reducing pay gaps, and improving brand recognition and diversity.

Pay transparency in executive search leads to a more productive, shorter overall duration for the hiring process. As employers, including salary information upfront can help you attract candidates interested in and qualified for the advertised position.

As pay transparency builds trust with candidates, it helps boost their decisiveness, which accelerates the time to hire. It will also save precious time and effort by avoiding negotiations with candidates whose expected salaries are beyond the mentioned range.

Posting salary can even help extend the reach of your job advertisement. In case your target candidates aren’t looking for a change or aren’t ready to accept the offer, they may be inclined to share the job opportunity with their networks when the salary (or pay range) is posted because pay transparency indicates a transparent and equitable recruiting process.

Those Against Pay Transparency in C-Suite Job Postings

There’s an absence of conclusive evidence suggesting explicitly that disclosing salary information causes a rise in the number of diverse applicants or a reduction in pay disparities. Additionally, many C-suite vacancies are handled by headhunters who rely on their professional networks and prefer reaching out to passive candidates to find top talent instead of openly advertising the jobs. Such an approach makes job postings and pay transparency in them futile.

Several hiring managers and recruiters prefer to have pay conversations with candidates during the interview instead of putting the salary in their advertisements. They say fantastic future leaders may not apply for executive posts if they believe that they have to tick every box and satisfy every single line of experience to meet the post’s criteria and salary.

For instance, a potential candidate earning EUR 80,000 will be unlikely to ask about a position explicitly marketed as EUR 1,60,000. In case no number is attached to the open position, there’s a high chance of such people applying for the open positions. This is especially applicable to female candidates.

Pay transparency in C-suite roles could make existing employees demotivated and disengaged, particularly if they are handling similar roles and believe they could have been hired (via vertical or lateral hiring processes) to fill the open role. This may give rise to circumstances where instead of employees’ pay reflecting their ability to do the job, it’s all about how well they can negotiate better or harder than their peers.

Loss of negotiation leverage during interviews and salary benchmarking by competitors after getting insights into your compensation structure are other concerns put forward by those against pay transparency in C-suite job postings.

Final Words

Pay transparency in C-suite job postings is increasingly becoming a necessity. As an employer, you can use it to gain a competitive edge in your talent acquisition drive while encouraging DE&I, decreasing pay gaps, improving brand recognition, and reducing the overall duration of your hiring process.

Pay transparency in executive hiring can also help you build trust with prospective executives while saving your precious time and effort. Since the benefits outweigh the potential drawbacks, it’s time to decide how best to address pay transparency in your hiring process for C-suite roles.

If you need help finding suitable C-suite candidates, reach out to us at InHunt World without a second thought right away!

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