We’ve all seen it: the job listing boasting 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 for modern employers is being open and honest, so keeping one of the most fundamental aspects from a job ad may just be harming your employer branding more than you think and goes against the grain when it comes to talent acquisition best practices.
What Makes a Salary Competitive?
A competitive salary isn’t a one-size-fits-all proposition it means different things to different people and it is at best subjective. The actual competitiveness of a salary is generally based on:
- Industry Compensation: The average salary for a similar role within a specific field.
- Location: Cost of living can significantly impact what a competitive salary looks like, as can demand within that geography.
- Experience & Skills: Someone with extensive experience and specialised skills will command a higher salary than an entry-level candidate.
- Company Size & Profitability: Larger, more profitable companies often have more wiggle room to offer more competitive salaries.
Why “Competitive Salary” Doesn’t Work
So, why is the term “competitive salary” a turn-off for many job seekers?
- Lack of Transparency: It leaves candidates guessing about the actual compensation range. This can waste time for both the employer (who receives applications from unqualified candidates) and the applicant (who invests time in applications for roles that might not meet their salary expectations).
- Underestimates Market Value: Employers who use this phrase might unintentionally undervalue the position, leading them to miss out on the very best talent.
- Discourages Negotiation: When a salary range isn’t provided, candidates might be hesitant to negotiate, or just move on to a role where they are candid around their expectations.
What to Use Instead
Here’s how employers can attract qualified candidates and build trust by ditching “competitive salary”:
- Salary Range: 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”.
- Benefits Package: 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.
- Salary Calculator: 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.
By ditching “competitive salary” and opting for clear communication about compensation, employers can build trust with potential hires and attract a more qualified talent pool. It’s a win-win for everyone involved and ensures that a culture of trust, openness and transparency is clear from the outset.
