A guest blog by Ed Pritchard, Managing Partner, Anderson Quigley
With nearly 25 years experience in appointing leaders across various sectors in the UK and abroad, I’ve seen the evolution of recruitment practices first hand. The hot topic currently igniting conversations in the sector is pay transparency. Like anything, it is important to scrutinise the implications alongside its benefits.
Let’s quickly address the elephant in the room – pay transparency directives. While the intent behind such directives, including reducing the gender pay gap, is something we should all be working towards, the effectiveness of implementing pay transparency in job adverts, for instance, is debatable. Contrary to popular belief, there is no conclusive evidence that suggests that explicitly disclosing salary information leads to a reduction in pay disparities or an increase in the number of diverse applicants.
I work to appoint leaders across the education, public, health and charitable sectors, with the vast majority of these senior roles there is an advertisement bubbling along in the background. In that respect I am not an Executive Search Consultant, I am an unashamed Executive Search and Selection Consultant. Much of my competition scoff at job advertising, preferring to bask in the glory of the supposed dark art of being a head-hunter. This, quite frankly, is the stuff of nonsense, especially in the public sector where the spirit and law of fair and open competition is sacrosanct – advertising plays an important role.
In continuing the theme of fair and open competition it seems sensible to be open about salary information on job adverts, but overall, we are not. “Competitive Salary” is ubiquitous on the advertisements that my company and our competition publish on behalf of our clients. At best we have a “circa” which typically does a lot of heavy lifting. But in the age of pay transparency directives in Europe, notwithstanding in the UK for now at least, surely not publishing salaries is for the dinosaurs?
The primary driver of the EU directive is to reduce the gender pay gap, with research suggesting that organisations who publish salaries on their advertisements have a reduced pay gap and attract more applicants. In the UK, the Government in 2017 introduced changes to the equality legislation that placed a legal duty on all employers with a workforce of 250 employees or more to publish data in relation to an organisation’s gender pay gap(s). Many have gone further and introduced the inclusion of the organisational ethnicity pay gap(s) data as part of their annual gender pay gap report.
But sadly I don’t think salaries on advertisements helps this. In my experience I’ve never seen a correlation between publishing salaries, attracting more candidates and an improved pay gap at the organisation. For example, one of my company’s biggest clients, for whom we have never been overt in publishing a salary band, has a gender pay gap 6% better than their sector average. I recognise this on the surface may seem anti-progress, but I along with my colleagues and peers are obsessed with improving the diverse ranks of the executive teams of our clients. In some US states employers are not allowed to ask what your previous salary was when you apply for a new job, less transparency is seen as the answer.
Most good recruiters worth their salt will want to have the pay conversation with the candidate and there is nothing more satisfying than turbo boosting someone’s salary. A candidate earning £80,000 is unlikely to enquire about a role overtly marketed as £160,000. But there’s a high chance they might, if no number was attached. I have seen this play out countless times. This is also the case with a role’s criteria, too many fantastic future leaders do not apply for roles because they believe they have to satisfy every single line of experience; person specifications aren’t a tick box menu, you don’t have to tick every box. Unfortunately, for both points, I see this more so with female candidates.
As recruiters it is our job to take on some of the responsibility and facilitate open conversation between an employer and employee to ensure discussions around pay are transparent. Pay directives bring in to focus an issue which should be on the table – we should be working towards practical solutions that prioritise equitable hiring practices and unbiased selection criteria.
I want to see organisations conducting regular salary benchmarking exercises to ensure their packages remain competitive and also look internally, are employees at the organisation doing the same roles all within reach of one another? It’s vital that employees’ pay relates to their ability to do the job, rather than if they can negotiate better or harder than others.
We shouldn’t be looking at pay transparency in isolation, but at the overall compensation package inclusive of benefits and perks. Alongside this businesses should work to foster a culture of open communication by ensuring employees have the tools they need to navigate salary negotiations and address any disparities if they arise. When all these things work in unison we will start edging closer to fair, equal pay for all.
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