Why Are Employers So Afraid to Talk About Employee Compensation?

Kristi Birkeland on Aug 29, 2017 3:00:00 AM

Back in the day, people viewed topics like religion, politics, and money to be very personal. To bring such things up in polite company would have been quite scandalous. Today, these things have gone the way of yoga pants. Like it or not, they’re everywhere. And they’re here to stay.  

And yet for some reason, it’s still taboo for employers (and candidates) to talk openly about compensation, even when they are deep into the hiring process. This may have worked okay in the past, but not anymore.

The case for talking about compensation

According to a survey from Career Builder:

  • 74% of respondents said they expect to see salary information in a job posting
  • 61% expected to see information on total benefits

And if that’s not enough evidence for you, a Jobvite study confirmed that money is still the number one factor in the decision to leave or accept a position.

If you’re an employer or hiring manager who’s still afraid to talk openly about employee compensation early in the recruiting process, you’re living in the past. And that isn’t where today’s top talent wants to be.

Time is money

As a busy business owner or HR professional, you’ve got limited amounts of both. 

Don’t waste a single minute (or dollar!) playing cat and mouse games around salary. Admit it. You’ve got a range set for the position or you wouldn’t be hiring. Be upfront from the get-go and let people know what it is. Why?

Because if your job listings don’t include any information about salary, you could be attracting all the wrong candidates. And wasting everybody’s time.

A quick (and frightening) example:

You need to fill an entry-level account management position. Because you love your company, you pump up the job description to make it sound lucrative, fun, challenging, and exciting. You mention your great culture, cool office perks, and the potential for upward mobility.

Of course you have a specific salary in mind, but you decide not to include it for fear that you might deter some higher caliber candidates from applying.

After narrowing down your pile of resumes, you do six phone screens at 30 minutes each. From there, you bring three candidates in, each for an hour-long, in-person interview with someone from your HR and/or management team. Two of these candidates come in for a second hour-long interview, with additional staff and management present. Perhaps you also decide to incorporate skills or personality testing into the mix.

You still have not talked compensation.

A week goes by. After much debate with your team over your two stellar applicants, you’ve made your selection. You’re SUPER EXCITED about this person and ready to hire them on the spot! You bring them in to make the offer and provide all of the additional details, including salary. But instead of saying yes, your candidate asks to think about it.

And so you wait.

A day goes by. Then two. When your potential new hire does call, it’s to politely decline. Unfortunately for everyone, based on the job description and rigorous interview process, your star candidate assumed that his or her compensation would be significantly higher.

You really want this person on your team, so you make a counter-offer. But it’s still not enough. Poof! There goes your top pick.

No problem, you tell yourself. I’ll just call my back-up candidate! And so you do. But by this point, a significant amount of time has passed. And that highly skilled person hasn’t stopped looking just because you might still be considering them. So instead of welcoming that person to your team, you find yourself congratulating them for joining someone else’s.

Ugh

Now you've spent anywhere from 10 to 20+ hours on the hiring process, many of them with key (i.e. expensive) team members present. Only find yourself back at square one.

If this has happened to you, you’re not alone. These kinds of scenarios play out all the time and in all kinds of organizations. Partly because some of us have harrowing hiring practices, but largely because we’re so afraid to bring compensation out into the light.

But if I reveal the numbers, won’t it take away all of my negotiation power?

This is a big concern. It’s also a big stumbling block.

While talking about salary early in the process will take away your “I’m withholding information from you” power, you’re still the employer. You’re the one in the hiring seat. A little extra transparency won’t change that.

In fact, it could earn you additional respect, because not only are you being upfront and honest, now you have to negotiate pay based on REAL factors like job-related skills and relevant experience. How refreshing!

Just say it

If you want hire the best and brightest, don’t keep them in the dark.

At the end of the day, you and your potential new hire will be making a business decision. In order for it to work out well, it needs to fulfill both of your needs by being the right fit culturally, professionally, and financially.

Make sure everyone involved has all of the information they need to make that decision in an effective way.

Photo by Melpomenem

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Topics: Leadership + Management, HR Strategy