Pay transparency in job listings is less transparent than you might think
Posting wide salary ranges such as $50,000 to $150,000 can worsen pay inequity, HR professionals say
When Kate McKenzie was looking for a job in the spring of 2023, she found a mixed bag of approaches to pay transparency — the practice of being upfront about salaries, both internally and when hiring.
"Sometimes the pay would be listed on a job posting. Sometimes it would be a salary range. Sometimes it was not listed at all … and it was impossible to know if the job was well suited for me or not," said McKenzie, who lives in Calgary.
When she would come across a job posting with an incredibly wide salary range, McKenzie told the Cost of Living it left her with the impression "they probably don't know what they actually want in that role."
"Because when it's that wide, it could be a more junior position, it could be a more senior position. It's like they haven't really taken the time to consider the specific level of experience that they're looking for."
With pay transparency legislation now in effect in British Columbia, passed in P.E.I., Newfoundland and Ontario, and proposed in Manitoba and Nova Scotia, companies are being called upon to include salary ranges with job postings, a move advocates say can help close the pay gap.
But while good progress is being made overall, they say, some organizations just aren't playing ball. They're posting such wide pay ranges it's impossible for candidates to assess whether the job is a fit.
"I've seen some crazy ones, like $50,000 to $200,000," said Darcy Clark, a compensation expert in Montreal with HR firm Normandin Beaudry. "That's far too wide. I mean, technically, by definition it is transparent, but it's misleading."
Allison Venditti, a Toronto-based human resources consultant and career coach, has been an outspoken advocate for pay transparency.
"Some companies hate that they're being made to do this. They're angry that they have to do it … it's like a petulant toddler who's just like, well, I'm going to put [a] 150,000 range then."
A 'race to the bottom'
At their worst, these wide ranges can lead to candidates accepting salaries that don't meet their needs just to land the job.
"You go in there and you feel this expectation that you're supposed to somehow undersell yourself, that in order for you to get the job, you're going to have to be in the lower end of that range," said McKenzie.
"Basically it's a race to the bottom between you and other candidates rather than it being about where your skills are truly at and where your experience is truly at."
Overall, however, the legislative changes in various stages of implementation across the country do appear to have made it more common to include salary information in job postings.
A report based on data collected from postings on the job site Indeed found that 49 per cent of Canadian job listings in February 2024 included salary information, up from 22 per in early 2019.
"I'm seeing so many places do it right — and a small fraction of people doing it wrong," said Venditti.
A more effective range to include in a job posting for a position with a salary calculated annually is around $20,000, she said.
No set formula
Louisa Benedicto, senior vice-president for diversity, equity and inclusion at Hay's Canada, part of a global recruitment firm, said that when it came time to implement pay transparency within the company, they were in a pretty good position.
"I'm fortunate to work in a company with people who really believe in this work," said Benedicto, who resides in Hubbards, N.S. She said Hay's runs its own internal pay equity audits every couple of years, so making salary information available internally upon request and including it on job postings didn't expose major pay inequity that would need to be addressed.
While it's hard to pinpoint one formula for a reasonable salary range in a job posting, she said, "a 30, 40, 50 per cent range is not a range. That's, you know, fishing for everyone in the market."
"It would be very odd to see a $40,000 to $80,000 range. That would be crazy," said Benedicto. But, she said a $40,000 to $55,000 range is reasonable.
Steve Male, director of total rewards and HR systems for Aviso Wealth, which provides services to the Canadian financial industry, helped initiate pay transparency at the Toronto-based company before it started to become a legislative requirement.
"Our ranges are fairly narrow. And what we're trying to do is strike a balance between protecting our proprietary competitive data and giving job seekers a really good idea of the target compensation ranges," he said.
Compensation specialist Darcy Clark said that when it comes to jobs that are paid hourly, pay transparency in postings is pretty straightforward.
"The range might be $24 to $27 an hour. That's a pretty tight range because the role is process driven and it's a defined skill set," he said. By contrast, applicants to a finance manager position could include both seasoned supervisors and earlier-career subject matter experts who are new to management, he said.
Wide ranges can backfire on companies
The Indeed survey also found that while salary information is now far more likely to be included in job postings on its site, "we also saw the precision of that salary information decline over time," said Indeed senior economist Brendan Bernard, who wrote the report based on its findings.
The median gap between low and high wage estimates on Indeed postings, including those without ranges, rose to 18 per cent in early 2024, up from 10 per cent five years earlier.
But being vague about salaries by posting really wide ranges can backfire on employers, said Kristine Kuhn, an associate professor of management at Washington State University who has studied how people respond to unclear salary information in job ads.
"Many prospective applicants would take a very wide range as a signal of untrustworthiness," said Kuhn, who has a PhD in industrial and organizational psychology.
"You may be complying with the law, but you are not actually conveying useful information to potential applicants, and so it does counteract the intended spirit of the legislation."
You're doing more harm than good, I think, by posting a bogus or unrealistic range- Darcy Clark, compensation expert
Darcy Clark shares that view. "You're doing more harm than good, I think, by posting a bogus or unrealistic range that you have no intention of paying either on the low end or the high end," he said.
Kate McKenzie's job search ended when she was hired in fall 2023 as director of engagement and enterprise for the charity Big Brothers, Big Sisters of Calgary, where she's been helping with the organization's internal move toward pay transparency.
"We're looking to try to keep our ranges between $5,000 and $10,000. And my hope is that by listing a really clear salary range, that it's actually going to attract the right kind of candidate ... they've already decided this is a salary they feel comfortable with and one that meets their cost of living and their needs."
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Produced by Danielle Nerman