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Salary Transparency – A Double Edge Sword?

Posted in Africa, and News

Salary Transparency matters, and as an employer, are you willing to be transparent? Being transparent as an employer could go a long way to serve a two-fold purpose, namely, encouraging great minds to offer their services to your business and ensure a fair pay grid at your workplace helping reduce the gender pay disparity.

You might be killing two birds with just a single shot. That is win-win, for everyone involved. Going salary transparent is now going to be the way forward for the tech industry, and is your organization getting geared up to embrace this positive shift across the industry?

The Salary Stalemate

As a developer, ask yourself: How many times have you been in interviews to quote your salary expectation, only to be told, ‘Meh, that’s high’? Or as an employer, how many times have you posted a job opportunity without mentioning the salary range?

What runs through your mind when you’re told your price point is way off? Why don’t YOU, the employer tell me what I should take then? Why didn’t you say that from day one you posted your job ad?

Many of this, what I call Salary Stalemate, where the employer-cum-applicant ends up spending an important part of their interview process debating about the way forward relating to salary.

When will we see Salary Transparency in Ghana?

What is Salary Transparency?

The term might be fancy, however, what it means is simple. To be salary transparent simply refers to letting your job applicants know what you pay what type of roles in your organization. You might throw in the scheme behind such arrangement, which will be great! It is as simple as that.

Are you a web developer? We pay 10$ per week ( I’m not serious about the price point, but you get the idea ). Maybe for Senior Web Developers or even Front-End Developers, we offer this price range depending on this skill set or experience level.

Some organizations, like Buffer have gone an extra mile to offer a simple salary calculator on their website to inform any potential applicant what they expect to enjoy when they join their team. Stack Overflow recently launched a similar website.

So whoever goes in for a job interview, the question of ‘What are your salary expectations?’ are totally off the table. Off the table for everyone involved.

And before you go like, ‘Duh, who’s this going to benefit? Why should I give out what my workers receive to the open public?’

 

 

Research says you should!

Stack Overflow, the place developers go to find answers to annoying bugs or offer expert help to other developers in need, recently presented a relatively simple online research they conducted to find answers to questions like, ‘Does showing salary range on job listing make any difference?’

The need for such transparency, as indicated by the research from Stack Overflow and I quote:

A lack of transparency is what economists call an information asymmetry: it’s in companies’ interests to keep these numbers close to the vest. Individuals are uncomfortable talking about salary sometimes, too.

And the fact that individuals are sometimes uncomfortable talking about salaries, employers may take advantage of the fact to manipulate the cards in their favor keeping money off the table that should have gone to a hardworking employee.

What was done?

Stack Overflow Jobs, the part of SO responsible for showing job openings at various organizations for developers to tap into and find their next dream job, run a form of A/B Testing to find out if playing salary range along with job application alerts or listing meant anything significant.

In their own words:

We expected to see an improvement, but we were surprised by the size: a 75% average increase in clickthrough rate (CTR) when we showed a job’s salary range.

Yes, 75% clickthrough rate, as in people were more 7.5 times out of 10 inclined to click on a job listing that had a salary range attached, than the same without any indication of what salary one can expect.

This is a significant shot in what they expected, and I personally also find it impressive.

The beauty of A/B Testing is how users might not know they’re being tested until told. In fact, I had followed some of the job openings on SO just because they had salary ranges attached.

It might have been subconsciously, but I remember doing following ads of that sort a couple of times. The research findings go a long way to indicate how useful advertising a salary range can me.

My Salary is Low, I can’t show it

Yep, you can. In fact, you should:

What if a job has a relatively low salary – is it still worth showing? Generally speaking, yes: we found that showing any salary range led to an increase in CTR, though higher salaries led to a greater bump.

… that advertising a salary range will help draw developers to a position.

And great developers are attracted to fair salaries, so if you plan to pay subpar salaries, believe you me, you’ll be getting developers worth what you’re paying.

At SO, one of their core principles for compensation is described in the article: How Much Should you Pay Developers:

Competitive means that you’re earning at least as much at Stack Exchange as you would earn elsewhere. It’s critical to being able to attract and retain the kind of developers we want working for us. If our compensation system isn’t competitive, we won’t be able to hire the people we want without giving them an “exceptional” salary, and exceptions defeat fairness.

If you’re an employer reading this, how easy will you be able to follow similar principles in your workflow in

The Gender Pay Disparity Kill Switch?

The second way you might be helping by being salary transparent is in the area of gender pay disparity. In the tech industry, same job roles salary differs depending on one’s gender. That is unacceptable and promotes a gender unequal working environment within any office.

For all you know, things seem to be changing for the better. In the US, “In many public sector settings, wage gaps between men and women tend to be lower because there is more pay transparency.”

How likely are you, in your organization open to discussions relating to salaries? Is it acceptable in your organization? Some companies have policies restricting that.

Knowing what salary price point there is upfront means as long as whatever gender meets certain criteria including experience or skillset, he/she stands the chance of receiving this salary. At that point, if a gender is being paid below what is advertised, it is way easier silently quitting to join a team that’ll appreciate one’s work for what it is worth, or take it up through the right channels to get the issue fixed.

One way to ensure transparency is by going outside-inside with the job listing salary range display. By displaying what you offer on your job page, you’re in effect guiding a salary point into your organization.

What if you do not have a structure or policy regarding how much to pay your developers? Perhaps you could tap into the arrangements from Stack Overflow: Developer Compensation (PDF).

Conclusion

I share the thoughts below and think it is about time the industry convention changes and adapts to a new way of ensuring Salary transparency. At the point, developers will be able to make an informed decision on which organization to apply to or whatnot.

We believe that conventions can change. If more companies become open on salary, perhaps openness will become expected.

Indeed, openness should be expected.

How open is your company? Are you willing to open up and offer salary expectation right and there on job listings?

If you are an employer, what are your reasons for keeping the salary point out of your job listings?

Let me know in the comments below. If you know any organization in Ghana that is transparent on salary, please do email me at hello at khophi.co