Pay transparency: Can it help you attract and retain sales and retail employees?
Salaries have always been a confidential aspect of the corporate world, but the latest research from LinkedIn suggests that this is changing.
In recent years, there has been a push to ensure glass ceilings are broken when it comes to gender and racial wage gaps. Many major corporations are facing this by becoming more transparent about the salaries of their highest earners, listing their roles and their gender identifications. LinkedIn’s 2019 Global Talent Trends report states that this trend has extended into more organisations; employees and candidates alike are now looking for better transparency when it comes to salaries.
To be clear, this doesn’t mean you need to publish exactly what your employees earn individually. It could be a matter of presenting titles or roles and giving a salary range. For example, ‘entry-level sales roles; base salary of $45-50,000 per annum with performance bonus’.
How salary transparency can benefit your organisation
In the Global Talent Trends report, Anil Dash (CEO of Glitch) is quoted: ‘Transparency isn’t the goal. The goal is paying everyone fairly, and transparency forces us to do that’. While this may be a difficult subject to broach for current employees, there are some major benefits to being transparent within your organisation.
- Transparency builds trust, many may assume they are being underpaid for their efforts and become dissatisfied with their roles. You’ll not only retain employees by being clear about the salaries of their peers and senior employees, but you’ll earn their trust that you are paying them a fair salary.
- Employees that are on the lower end of the salary range will be encouraged to discuss ways in which they can improve and head towards the upper end of the salary range. These may be difficult discussions but encouraging employees to ‘prove their worth’ to achieve that pay rise will improve productivity.
- Being transparent addresses and avoids pay gaps within your business, especially where pay becomes more variable and negotiable. As Dash states, being transparent about salaries encourages the fair and equal pay. Your team can be sure that your company is a breaker of glass ceilings thanks to the open narrative regarding their pay.
While there are negatives to becoming more transparent about pay too, once you navigate the initial storm of pay discussions, disputes and upset; encouraging an open discourse in regard to pay will become more positive. It will both increase trust in your organisation and productivity in your employees.
Why pay transparency can help with candidate attraction for sales roles
According to a Glassdoor study, 67% of active job seekers look for salary in job adverts. According to Julie Coucoules, Glassdoor’s Global Head of Talent Acquisition, ‘Job seekers crave transparency on pay, not only to make an initial judgment about whether to consider applying for a job, but also to assess if an employer holds long-term potential for them.’
It is important to be clear when it comes to pay too. We advise being clear as to the whole package. Instead of only advertising the on target earnings for that role, be clear on what the base pay is, plus their superannuation plus the possible OTE.
For example, ‘$90,000 OTE’ is going get you more ad views but will be less productive than ‘base pay of $45,000 per annum, plus $5,000 superannuation and a variable monthly performance bonus with possible OTE of $90,000’. Not only will the full package be clearer for candidates and weed out irrelevant talent; the trust that candidate has in your organisation will increase as they understand the full pay package before applying to your position.
Pay Transparency contributing to Employee Satisfaction and retention
Pay transparency is becoming more common across many organisations, in 2018, PayScale reported it’s ‘Heroes’ of pay transparency. Aldi came in at the top on the list of organisations identified as having a ‘highly transparent pay process by their own employees’. What’s more, in order to make the list ‘organizations had to have at least forty percent of their surveyed employees reporting high pay transparency’. Aldi came in with 85% of their employees being satisfied.
If an employee is satisfied with their role and pay, the theory is that they’ll remain in their role and continue to work hard for the organisation. Also, encouraging an open discourse in salary can increase trust in the organisation. If you haven’t got anything to hide, why keep it so secretive?
The level of pay transparency you give is completely up to you and what suits your organisation, but there is proof that being transparent can increase employee trust and retention and attract more appropriate talent to your job advertisement.
Need expert candidate attraction advice?
Speak to a member of our recruitment advertising team for expert advice on attracting the right people to your role. You can get in touch on 1300 366 573 or email info@employmentoffice.com.au.
