Everyone knows that nothing stirs up as much discussion as politics and money. As a specialized recruitment agency, we have no intention of covering the first of these topics, but we thought it was worth taking a look at finances, and more specifically, salary disclosure in the technology industry. Should salary ranges be given already in the job posting? If not, why not?
Are we experiencing a revolution?
For a long time, we have noticed that there is an increasing percentage of tech companies that are already at the stage of adding an ad decide to reveal the salary range for the person who will occupy the position. Interestingly, this state of affairs is due in part to younger people (Gen Z), because as has been shown, they are remarkably reluctant to apply for offers with an undisclosed budget.
More and more candidates are being very clear - in advertisements, salary ranges should be explicitly stated, and it would be even better if the salary for those working on a so-called B2B contract as well as those on an employment contract basis were specified right away. Will their expectations be met? Time will tell, but we are already noticing that an increasing number of companies are raising the topic of money at the first contact with a potential applicant.
Why don't employers want to reveal the salary ranges?
The topic of wage spread secrecy has been raised for a relatively short time, but from our observations, this phenomenon has several causes:
First things first - money
As you can guess, there are companies in our market that do not disclose salaries due to their relatively low attractiveness. Such behavior is quite logical, because once a candidate engages in the recruitment process and is qualified for the final interview, he or she may agree to a lower salary, not wanting to apply to more companies. This practice is certainly inelegant, but as you can see, it sometimes works.
Cultural aspect
In Poland's case, the secrecy of the salary ranges may be a result of cultural aspects - note that money is somewhat of a taboo subject and many people do not want to openly admit how much they earn. We can assume that this phenomenon will go away as a result of globalization and the increasing presence of international companies in our market, although there are discrepancies here as well. When it comes to the openness of wage spreads, the undisputed leaders are companies originating from the United States, while organizations based in the United Kingdom rarely brag about their salaries, although they often don't have anything to be ashamed of.
Variety in skill levels of professionals
Despite multi-stage research, complex analysis, and accumulated know-how, the recruitment process can surprise both the recruitment agency and its clients or candidates. Although the search should be for a specific, not overly extensive group of specialists in a particular field, the skill level of those contacted can be extremely varied. People with five as well as ten years of experience, candidates with a strictly STEM-related education as well as those with courses or boot camps can apply for a single position.
The discrepancies can be huge, and many companies are reluctant to resign from hiring potentially more qualified professionals whose requirements might not fit within the proposed ranges. Looking at it this way, the salary disclosure is intended to broaden the pool of people who can be hired.
HQ requirements
Sometimes it happens that a Hiring Manager in a local office would like to disclose the projected salary range for a newly opened position, but it is forbidden by top-down procedures. The cultural considerations we have already mentioned, as well as some elements of business strategy, mean that hiring managers in the Polish branch may not have any decision-making power in this regard.
Morale can suffer
Let's not kid ourselves - numerous people regularly review job postings and keep up to date with the labor market situation in their industry. There would be nothing wrong with this if it weren't for the fact that you might accidentally come across a job listing for a similar position in your own company. The desire to renegotiate salary may be understandable, but there is a risk that such a person will resign from their current position due to the distaste created. A poorly managed salary policy can wreak havoc on human resources, which is why in some cases, recruiters provide a salary spread in the first message to a candidate - this excludes the risk of this information falling into the wrong hands.
Risk of misunderstandings
Over the hundreds of recruitment processes we have conducted, we have noticed that the publication of salary ranges in an advertisement changes the approach of candidates. The conversation turns more towards the topic of money, and candidates themselves value their skills less objectively, as they suggest ranges given top-down. This carries the risk of misunderstandings, as most people, subconsciously, notice first of all the upper limit of the offered salary, making their candidacy less favorable. In the case of most recruitment processes, our clients' budgets are very similar to those offered by their competitors, so inevitably, the professionals we meet have a general sense of the prevailing rates. The undisclosed nature of the wage spread does not lead to hiring at unmarketably low rates but only makes candidates' expectations more realistic.
Why should salary ranges be placed in a job listing?
The arguments "against" sound very logical, but the situation is not so simple. Salary disclosure can have several positive effects.
First of all, candidates are more likely to respond to job offers if the recruiter informs them of the possible salary right away - therefore we have a higher response rate. As a general rule, we don't like to make decisions based on unverified data and guesswork, and if a candidate's current salary is attractive to him, he probably won't be willing to participate in time-consuming recruitment without being sure that it will pay off for himself. In addition, we can assume with a high degree of probability that the pool of candidates applying will simply be larger, allowing for a better selection of the target employee.
Salary range disclosure also has an impact on employer branding - after all, we can imagine a situation in which some people will mention a particular company because of the proposed rates. In addition, open wage spans build the image of the organization as transparent and inclusive.
Likewise, we believe that while the openness of salary ranges will not eliminate discrimination based on gender or nationality, it certainly facilitates the reduction of this phenomenon. Admittedly, it still happens that some people receive less favorable offers for reasons other than substantive, but we have seen a marked improvement in this matter.
Should the salary be displayed in the advertisement?
Such a question cannot be answered briefly. In practice, it shows that although such a step is a kind of gesture to candidates, it is not always worthwhile to opt for it. However, it is worth noting that providing a salary range can increase the number of applications for a published advertisement - this is especially important in the case of recruitment for niche positions, where the pool of people with the right qualifications is counted, for example, in dozens across the whole country.
If it is not possible to publish the salary ranges in the advertisement, it is worth rethinking the timing of doing so. Given that it is good practice to recruit as soon as possible, early information about estimated salary levels can keep a candidate in the process until the final stage.
How to set salary ranges for recruitment?
Contrary to appearances, setting a salary range is an extremely complicated process, because more, absolutely does not mean better. On the one hand, decision-makers from the recruiting organization would like to spend as little as possible on a new position, while keeping the offer attractive. On the other side of the scale are the candidates who, just as obviously, are looking for the best-paying employment opportunities.
Finding the golden mean can be assisted by an IT recruitment agency that can conduct a market mapping process. With the help of surveys, analysis of historical data, and salary reports, itMatch can very accurately estimate salaries matching the current market situation.
At this moment, it is worth mentioning an extremely interesting phenomenon - the candidates we surveyed, tend to overestimate their rates by an average of 13% relative to the average we calculated for the position. What's equally intriguing is that publicly available salary reports very often include amounts significantly lower than actual, especially for highly specialized roles and senior positions. The higher the salaries, the more programmers and other IT professionals are more likely to switch to B2B contracts, and as you might guess, the incomes of sole proprietors do not count in the statistics, which is the reason for all the confusion.
Summary
Your company is planning to recruit or open a new branch office in Krakow or Wroclaw, but do you think you need expert support? That's a good thing - as an IT recruitment agency, we'll be happy to carry out the entire process for you, speeding it up and making it more efficient.
And if you are a recruiter or candidate and simply interested in the tech industry, check out our other blog articles today and observe us on Facebook and Linkedin. We regularly publish very interesting posts there and feature the best employment opportunities 🙂