Pay transparency has become a desired asset in the job market as more candidates want open discussions about their wages early in the process of looking for and considering new roles. With the sharp rise in the cost of living across Canada, it should be no surprise that a candidate considering a new opportunity wants to ensure that there is alignment in salary expectations before pursuing interviews and engaging in conversations with a potential employer.
Canada introduced the Pay Equity Act in January 2021, which requires all federally regulated private-sector employees including banks, telecommunications, and airlines to ensure that their workers receive equal pay for equal value, and these organizations are also required to report salary data for all workers, but this is not enough, only affecting about 6% of workers across the country.
Here are some reasons to think about introducing pay transparency in your organization:
Closing the Wage Gap
In 2022, Several states across the US introduced pay transparency laws, and experts are calling for Canada to do the same to help close wage gaps. One of the biggest reasons why salary transparency is vital is because marginalized communities and individuals across Canada are still earning significantly less than others in the workforce. According to an article by City News and Sarah Kaplan, a Professor of Gender and the Economy at the University of Toronto, Women working full time in Canada are earning about $.89 cents to every dollar a man makes, and for Black Women, Latino Women, and people with disabilities, the pay gap is even larger at $.59 cents on every dollar compared to Canadian men who do not identify as a person of colour. The International Labour Organization found that pay transparency policies can help reveal pay disparities between men and women and help identify their causes to reduce gender inequities when it comes to compensation in the labour market.
Help Attract Top Talent
Only a handful of job postings include salary ranges even though it is known that job postings that include salary information get more attention, more clicks, and a higher number of applications. Candidates also view job postings that include compensation details more positively and their impression of the company improves. Postings without pay are less appealing because candidates do not want to waste their time applying for jobs that are outside of their preferred pay range. When organizations are transparent about their salaries, less time will be wasted interviewing and vetting candidates that will turn down the opportunity as soon as comp is revealed.
Be a Leader in Your Market
For employers looking to fill gaps that are starting to arise in their organizations with Boomers retiring, one of the best ways to attract employees is through salary transparency. Reports suggest that Gen Z workers would leave their company for one with salary transparency. Younger employees entering the workforce overwhelmingly care about pay equity efforts. It builds trust and leads to less attrition. Progressive businesses and organizations will adopt pay transparency before organizations across Canada are mandated to do so.
We know that pay transparency is becoming more and more common. There has been a significant shift in the workforce since the pandemic, and old rules and attitudes have been shaken and challenged. With the labour shortage we are facing and the opportunities that job seekers find themselves presented with, candidates are not going to sit through 4 rounds of interviews only to find out that the job pays $20,000 less than their current role. Be prepared to discuss salary early and be transparent with candidates if you want to engage and keep them interested in today’s market.
Written By: Melina Grande
Note: This article is written as an opinion piece from the perspective of a Recruitment Specialist