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Salary transparency has become a significant topic in the tech recruitment world. It is seen as a way for employers to build trust with candidates and employees and boost engagement and productivity. Crucially it is also seen as a method of closing the gender pay gap and reducing discrimination.

Salary transparency is the practice of businesses openly discussing compensation details with current employees and candidates. It can have different meanings and practices for different companies. For example, some businesses publicly share all their salary data, while others just disclose how pay is determined for each employee.

In the tech world, it is seen as a major priority for top tech talent, as according to research by CWJobs, 72% of workers are highly sceptical about businesses that do not give any indication around pay in job adverts. 57% would avoid applying for a job which only described the pay as 'competitive.

Due to its importance in attracting top tech talent, this guide will explore why salary transparency is vital to tech recruitment and how you can be more transparent in your business’s pay offerings. 

Why is Salary Transparency Important to Tech Talent?

With CWJobs research indicating a significant mistrust from tech talent of businesses unwilling to provide this information, it is crucial to understand why this information is vital to candidates when applying for roles. So, let's look at key reasons why candidates want salary transparency: 

Allows for more Informed Decision Making 

Candidates can assess whether the package aligns with their expectations and financial goals when salaries are openly communicated. Tech recruitment is fiercely competitive, and candidates may be offered from several businesses, so the salary information will allow them to assess the overall value proposition of a job offer and make more informed decisions about the next step in their career journey. 

Builds Trust and Transparency 

The research shows that tech candidates appreciate businesses that are transparent about their salary packages, as it indicates a culture of fairness, openness, and respect. This helps build a positive impression of the company and helps establish a foundation of trust from the get-go of the recruitment process.

Helps Reduce Bias and Discrimination  

In our recent guide, How to Increase Diversity in Tech Through the Recruitment Process, we have seen the importance diversity in tech has to innovation, building customer trust, and financial return. Salary transparency is a significant method of reducing the potential for discrimination and bias in compensation decisions. 

Openly disclosed pay ranges minimise the risk of pay disparities based on race or gender. This, therefore, means that candidates have more confidence in the fairness of the compensation process, with the peace of mind that is based on objective criteria rather than subjective biases. 

Improves the Efficiency of the Tech Recruitment Process 

This applies to both the business and the candidate; as we have explained above, being transparent about salary in the job advert can make informed decisions on roles that meet their expectations. 

This also means it avoids wasting time on job applications and interviews if the salary meets the candidate's requirements. For the business, it allows them to streamline their recruitment process and focus on candidates willing to accept the position based on the salary provided, saving them time, money, and resources. 

Provides Opportunity for Fair Negotiation 

Negotiation during the interview process can be tricky and slightly daunting for candidates, especially when you apply for the job and have no salary guidance to support you. This is a particular issue for women, as research has shown that 54% of women feel unforgettable talking about salary during the recruitment process. This lack of salary information risks putting off top-level tech talent before you even get a chance to negotiate with them. 

A business being open about salary from the initial stages of the tech recruitment process means that a candidate is equipped with knowledge about the pay range for a specific role. This allows them to be prepared for entering negotiations over the salary terms; they can receive fair pay based on their skills, experience, and the value they would bring to the business. It will also give them peace of mind that they are not accepting an underpaid job compared to the rest of the market. 

Salary Transparency and the Gender Pay Gap

As well as being highly beneficial to individual tech talent when applying for roles, it can positively impact the actions in closing the gender pay gap. 

The tech industry, unfortunately, still has damning statistics when it comes to the gender pay gap. In the UK, 91% of companies in the industry pay their male workers more than their female workers. In the US, women earn an average of 82 cents for every $1 earned by male tech talent. 

For decades, people have been trying to raise the debate and implement change in the equality of pay between men and women. However, as the figures show, the problem still persists to date, making global headlines in tech and across virtually all industries. 

Issues Women Face in the Tech Industry 

One major issue for the tech industry is that it has become seen as a male-dominated industry (women make up just 26% of the workforce), making it a less desirable environment for women. However, without proper female representation who can change the male stereotype, women will not know what to expect from a career in the industry, and those who have the bravery to enter the field, are at risk of being exploited in areas such as pay. 

How is Salary Transparency Helping to Overcome These Issues?

This is where salary transparency can be of great assistance. Being open and honest with pay right from the start of the recruitment process could reduce the gender pay gap by 40%. A wage gap can occur from a hiring manager's unconscious bias and/or a lack of historical salary transparency. Pay gaps often begin at the beginning of a women's career and then grow over the years when employers base salary reviews on the employees' previous pay. 

In addition, salary transparency is also beneficial because it can identify and avoid discriminatory pay patterns. When conversations around pay are made behind closed doors, it is easier for bias and discrimination to creep into compensation decisions. 

When salaries are visible to candidates and employees, women can easily see if they are being underpaid compared to male colleagues. Salary transparency also helps employers, employees, and candidates avoid discrimination in discussing, inquiring, or disclosing compensation. This could ultimately lead to the gender pay gap being eradicated further. 

Our Employer Guidance for Salary Transparency 

Now we have explored the benefits of salary transparency, we have created several top tips for employers to ensure they are transparent around compensation in the hiring process. 

Decided what Level of Salary Transparency is right for you

The first crucial step in increasing salary transparency in your business is to decide what level of transparency works for you. There are different levels of pay transparency, from simply disclosing the salary range in a job advert to sharing all data with all employees. 

For example, a smaller business may not have the resources to implement comprehensive salary transparency that shares data with the entire workforce. However, you should have the capability to be transparent by disclosing salary ranges in job adverts.

For large companies, if you have the resources, then look at sharing salary data with your workforce, and it can support creating an equitable workplace and reduce gaps based on gender or cultural background. 

Establishing a Salary Range 

Instead of providing a single figure, some job adverts offer a salary range that allows for flexibility based on the candidate's skills, qualifications, and experience. The range recognised that different tech talents would bring varying levels of expertise to the role, and their salary can be adjusted accordingly. Furthermore, adding a salary also indicates that you are open to negotiation, giving the candidate some autonomy, which may motivate them to apply and go through the recruitment process.  

But how do you decide on this pay range? It is not an easy task; if you set it too low, you will turn candidates away, and if you set it too high, it sets unrealistic expectations and potential financial risk. Consider the following considerations when making this crucial decision:

  • Internal employees Data - Salary ranges shared in job postings should be comparable to what you currently pay those in the same position with similar skill sets and experience. Offering much higher salary ranges compared to the internal workforce can cause friction. When making this decision, larger companies, in particular, should also consider salary differences in different locations. 
  • Competitor Benchmarking - This is vital for analysing and establishing salary structures that help you attract and place top tech talent. It provides your business insights into how your competitors pay their employees so you can ensure your pay structure is aligned with the current market rates. 
  • Meeting your Budget - There's no point in throwing money at a candidate you can't afford their wages, even if they are exceptional tech talent. Overbudgeting for a candidate can lead to future financial risk further down the line. Gather data from internal employees and competitors and use it to set a realistic salary range, the top end of which is within your financial capabilities. 

Train your Hiring Managers 

As your hiring managers are organising the recruitment process from the job advert to the onboarding, they must be aligned with the up-date-policies and the company message around salary transparency. Key benefits of training your hiring managers are: 

  • Discussing benefits such as reducing discrimination, building trust, and improving decision-making with the hiring managers will ensure the desired message is carried into the interview process. This will enable them to be prepared and to handle difficult conversations around pay ranges and benefit packages. 
  • Training will provide the managers with evidence of the data your businesses have used to decide on the salary range. So, this would cover the points raised above - internal employee data, competitor benchmarking, and budget considerations. Proving this insight will help hiring managers understand the salary range and convey this message to the candidates. 

Final Thoughts on the Role of Salary Transparency 

Salary transparency plays a crucial role in the tech recruitment process as it brings a range of benefits to both the employer and the candidate. Openingly communicating salary ranges, understanding pay decisions, and leaving the floor open to candidate negotiation, will breed a culture of fairness, equity, and trust throughout the recruitment process and the wider company. 

In addition, transparency empowers candidates to make informed decisions, negotiate from a position of knowledge, assess the overall value of a job opportunity, and have an elevated candidate experience. This benefits employees; it can help ensure that the candidates applying have pay expectations that match the business, help you streamline your process, and avoid using unnecessary resources and costs. 

Importantly, salary transparency is also helping to reduce bias and is making a positive impact in the battle against the gender gap. By fostering salary transparency, you will be helping to create a more equal workforce. It is a significant strategic move that helps attract top tech talent, raises employee satisfaction, and drives long-term business success. 

Need Further Expert Advice on Salary Transparency?

At MCS, we are dedicated to helping businesses, from start-ups to multinationals, be in the best position to attract high-quality tech talent. To support your business, we have created a comprehensive salary guide to give you vital tips and information for your recruitment process. To download our latest guide, visit our dedicated technical and engineering page. 

If you would like more details about how our talent solutions can revolutionise your business's future and connect with the best candidates on the market, visit our solutions page or contact our friendly team for more information.