We’ve all seen the job listing which boast a “competitive salary.” But what does that even mean?..
Is it time for employers to ditch this phrase in favour of more transparency?
A key aspect of employer branding is being open and honest, so keeping one of the most fundamental aspects out of a job advert may just be harming your employer branding more than you think!
What Makes a Salary Competitive?
A competitive salary means different things to different people and it is – at best – subjective. However, the actual competitiveness of a salary is generally assessed on:
- The average salary for a similar role within a specific field.
- The cost of living in the area, which can significantly impact what a competitive salary looks like, as can demand within that geography.
- Someone with extensive experience and specialised skills will command a higher salary than an entry-level candidate.
- Larger, more profitable companies often have more wiggle room to offer more competitive salaries.
Why “Competitive Salary” Doesn’t Work
It Wastes Everyone’s Time
The most immediate casualty of hiding a salary band is time. Finding a new job is a labour-intensive process. Candidates spend hours tailoring their CVs, writing bespoke cover letters, and preparing for multi-stage interview processes.
When a salary is hidden, candidates and hiring managers are essentially playing a game of chicken. A candidate might go through three rounds of interviews only to discover at the offer stage that the “competitive” salary is thousands of pounds below their current wage or minimum living requirements. The result? The candidate declines, and the employer is forced to start the recruitment process all over again. Being upfront about the budget from day one ensures that only candidates who are happy with the compensation will apply, saving HR departments and applicants countless wasted hours.
“Competitive” According to Whom?
The fundamental flaw with the word “competitive” is its subjectivity. To an employer, it might mean “we benchmarked this against three local businesses five years ago.” To a candidate facing soaring rent, energy bills, and the ongoing cost of living crisis, that same figure might be thoroughly uncompetitive.
Increasingly, jobseekers interpret “competitive salary” as code for “we want to pay you the absolute minimum you are willing to accept.” It gives the impression that the company is trying to keep its cards close to its chest to lowball applicants, rather than paying them what the role is genuinely worth.
The Trust Deficit
The employer-employee relationship is built on trust, and the recruitment process is the foundation of that relationship. By refusing to disclose a salary band, companies are starting off on the wrong foot. It breeds an immediate sense of mistrust. If a company is not transparent about baseline remuneration, candidates cannot help but wonder what else is being hidden behind closed doors.
Conversely, organisations that advertise clear salary bands project confidence, candour, and fairness. They send a clear message: We know the value of this role, and we are willing to pay for it.
Fuelling the Pay Gap
Perhaps the most compelling argument against the “competitive salary” is its negative impact on equality and diversity. When salaries are shrouded in secrecy, compensation often comes down to who is the best negotiator, rather than who is the best fit for the job.
Extensive research shows that women and ethnic minorities are statistically less likely to negotiate aggressively on starting salaries compared to their white male counterparts, and when they do, they are often perceived more negatively for doing so. By keeping pay secret and relying on candidates to name their price, employers inadvertently perpetuate the gender and ethnicity pay gaps. Transparent salary bands level the playing field, ensuring people are paid for their skills and experience, not their bravado.
What to Use Instead
Here’s how employers can attract qualified candidates and build trust by ditching “competitive salary”:
- Provide a clear salary or salary range upfront. This shows transparency and allows candidates to self-select based on their needs. Even if you don’t know exactly what you are prepared to offer, give a range and just simply say “negotiable”.
- Highlight the additional benefits offered, such as health insurance, paid time off, and pension plans. A comprehensive package can make a lower base salary more attractive and give context to other financial and non-financial benefits.
- Some companies are even using salary calculators that allow candidates to input their experience level and location to get a personalised estimate of their potential compensation. This is helpful for mass hiring or for organisations that have clear salary banding in place based on fundamental factors which can be easily benchmarked.
