6 Questions About Salary Ranges in Ads

I received some questions about salary ranges: do you have to publish them? And what happens when you do – how will employees take that?

Let me start by sharing a memorable response from an employee who saw an ad for her own job with a salary range:

I often use this quote in keynotes: it makes it abundantly clear why you should not publish ranges externally before you’ve established pay transparency internally!

Does the EU Pay Transparency Directive require you to post salary ranges in ads?

This might surprise you, but no, it does not.

Article 5 states that:

Applicants for employment shall have the right to receive, from the prospective employer, information about:

• the initial pay or its range, based on objective, gender-neutral criteria, to be attributed for the position concerned; and
• where applicable, the relevant provisions of the collective agreement applied by the employer in relation to the position.

Such information shall be provided in a manner such as to ensure an informed and transparent negotiation on pay, such as in a published job vacancy notice, prior to the job interview or otherwise.

You must make pay information available to candidates, but you don’t have to make it public or advertise it. But not doing this would mean you ignore the trend towards transparency: many job ads show a pay range. When they don’t, job boards will often add an indicative range based on similar postings. That raises expectations that your company might be able to fulfill. So, it might be better to control this info yourself and share the pay range in the ad.

Why should you post salary ranges in ads?

Posting salary ranges can help you with the hiring process. This was already well-established before the introduction of pay transparency legislation. Job listings with clear salary information tend to attract more applicants, and many employers find that the quality of candidates improves when they include a pay range. The reason for that is simple: people self-select themselves in or out based on the compensation offered.

This transparency about pay allows candidates to determine if a position meets their financial needs: most people have a fairly good understanding of their earning potential. This also saves time for the candidate and the employer because more suitable applications are submitted.

From an HR perspective, transparent salary ranges also help streamline the negotiation process. When candidates know the range upfront, discussions focus more on finding the right fit within that range, based on experience and qualifications. And it’s more efficient: you don’t discover at the end of the process that the compensation offered is not acceptable to the candidate.

How large should the salary range be?

While transparency is beneficial, wide salary ranges can be problematic. For example, if you publish a $45K to $150K range for a position, that could signal you are uncertain about the role itself. Are you looking for a junior or a more experienced candidate? The range suggests that you haven’t worked that out yet. People might also perceive it as a tactic to attract more applicants without a clear compensation strategy. And how are you going to convince candidates to accept a $50K salary at the lower end, when they assume the position will get them around $90K (close to the midpoint)? It’s important that you define salary ranges that are realistic and reflect the value of the position to maintain credibility and trust.

It’s essential to establish meaningful ranges. You can use data analytics to determine appropriate ranges based on market data, internal equity, and the specific requirements of each role. When you divide ranges into quartiles, make sure you also define the qualifications, experience and other requirements per quartile. This allows you to have a conversation with the candidate based on the job characteristics and requirements and explain why you place them in a certain quartile. When you come to this well-prepared, it makes it easier for the candidate to understand the offer.

Can you just post an amount?

Yes, according to the EU Directive you can share initial pay. But in other geographies, the law requires that you publish a pay band. So carefully check the local legislation and ask your legal team.

I’ve noticed that sometimes, companies post only the minimum amount or the initial pay for a position. This can set clear expectations and help candidates understand the baseline compensation. It typically works for positions that are well-defined, with clear requirements and little to no variation in experience or education, etc. However, it might also limit the number of candidates, because you are fixing them on this amount and not taking any of their unique qualifications into account: if they can fulfill the role, this is the amount they take home. It keeps the negotiations very simple, but might not be the best way to offer insights in potential earnings growth. 

Should you advertise a salary range or a total compensation package?

In many geographies, a salary or range is legally required, so consider it the minimum standard. A salary range is typically more straightforward and easily understood by candidates. It sets clear expectations about base pay, which is often their primary concern. This amount is what is stated on their payslip, and gives them a good base for comparison.

But for roles with significant additional benefits or variable compensation, posting just the base salary may not fully represent the value of the position. Advertising a total compensation package gives a more comprehensive picture of what you’re offering. This includes base salary, bonuses, stock options, health benefits, retirement contributions, and other perks.

You might want to advertise the base salary range prominently, while mentioning that additional compensation in the form of bonuses, benefits, or equity (or other) are offered as well. This gives candidates a clear baseline while also hinting at the potential for a more comprehensive package.

What about current employees?

As the tweet at the start of this article showed, don’t underestimate the effect that publishing salary ranges has on current employees. When you publish pay ranges in ads without having done the internal project, you are asking for trouble. Revealing pay ranges can highlight pay disparities and encourage companies to address any underpayment issues. This can lead to better employer-employee relationships by promoting fairness and trust within the organization. This transparency can be a powerful tool for fostering a culture of openness and trust. However, it also requires proactive communication strategies.

I’ll end with some practical suggestions:

1. Pay equity audits: Before publishing salary ranges, conduct thorough pay equity audits to identify and address any existing disparities. This approach can help you mitigate potential issues that may arise from increased transparency. Fix them before you put ranges in ads.
2. Update compensation structures: Pay transparency may highlight the need to update existing compensation structures. Be prepared to review and potentially revise job levels, salary bands, and bonus structures to ensure they align with your transparency goals. Again, do this before you put ranges in ads.
3. Training for managers: Develop training programs to help (hiring) managers navigate conversations about pay ranges effectively. This includes explaining the rationale behind ranges and handling questions about where a candidate might fall within a range.
4. Global considerations: For multinational companies, navigate the complexities of implementing pay transparency across different cultural and legal contexts. What works in one country may not be appropriate or legal in another. Salary bands might deviate country by country. I’ve written about potential approaches here.
5. Technology and tools: Explore HR tech solutions that can help manage and communicate pay information effectively. This include salary benchmarking tools, pay transparency analysis solutions, compensation management software, and/or internal communication platforms.