Benefits and Compensation, Recruiting

Why is Salary Transparency So Important to Job Seekers in Today’s Economy?

Salary transparency is very important to jobseekers because it offers reassurance that they are being offered the same pay as other candidates and employees who have a similar set of skills and experiences. Additionally, salary transparency helps reduce bias in the workplace, and jobseekers today want businesses to provide an even playing field for both jobseekers and employees and to prioritize equality.

According to Adzuna’s recent study, 28% of U.S. jobseekers’ biggest frustration is not seeing salary information or a lack of clarity about salary (including very large salary ranges) on job ads. Pay transparency also saves jobseekers’ time during the application process because they can narrow down their options. Adzuna’s analysis on job hunting activity over the last 5 years revealed U.S. workers have wasted over 480 million hours applying for jobs with the wrong salary. As much as employers want to attract the right candidates for their open roles, jobseekers want to know a role is the right fit for them salary-wise before they spend hours applying and interviewing

Why Should Businesses Care About Salary Transparency?

Today’s job candidates care about diversity, equity, and inclusion (DEI) and equitable and transparent workplaces, and employers that don’t share pay ranges during hiring show high-quality candidates they may have something to hide.

According to the survey, a lack of salary transparency on a job ad makes potential employees skeptical of an employer. A third (32%) said they assume the company is hiding something, while 30% said they believe it shows the company would underpay them. Others think it makes the company look untrustworthy (28%) or that it shows the company will be biased in how it pays employees (31%).

A lack of salary transparency will also prolong the recruiting process, is more costly for employers, and creates barriers to reaching more candidates. Adzuna’s data reveals that 54% of jobseekers declined a job offer after they found out the salary—and after going through the interview process. Additionally, 33% would not attend a job interview without knowing the salary the employer is willing to offer.

Our data also shows that jobs with a salary receive 6x more applications, meaning salary transparency is a great tool to attract increasingly discerning talent.

What Are Steps Companies Can Take to Become More Transparent with Pay?

Although there is far more work to be done, U.S. companies are starting to take steps toward becoming more transparent. This is critical to jobseekers amid the cost-of-living crisis.

In 2020, an average of just 1% of companies were transparent about salary within job postings, but now, 3% of postings include salary details. Organizations need to continue, or start, making pay transparency part of their future work plans, as speaking openly about salaries will move from being taboo to being normal. Tips and best practices for companies include:

  • Start using market data to set initial salary ranges.
  • Consider implementing payroll audits to identify discrepancies.
  • Always advertise an intended salary or salary range on job postings.
  • Share pay ranges for each role, insight into how salaries are calculated, and what employees need to do to reach the next step in the range.
  • Train team managers on how to handle salary conversations with employees in a fair and sensitive yet subjective manner.

How Is Adzuna Helping the Job Market Become More Transparent?

In September, Adzuna launched the #MakeSalariesMandatory campaign. The company is on a mission to make the job market fairer and more transparent by calling on businesses to show salaries in their job ads. We are also campaigning for the U.S. government to make including salaries on job ads a federal requirement.

Paul Lewis is Chief Customer Officer at Adzuna.