Andreu’s blog

Be fair, don't waste time, avoid discrimination. Reasons to put salaries on job ads

I have always felt, both as an employee and as an employer, that job ads should include salary information. The main reason is not to waste anyone's time. Often a narrow salary range or a clear link between requirements and salary are much more informative than a job description. I have experienced to apply to a job opening and go through one or more interviews only to find out that the company is actually hiring for a more junior position than the ad copy implied.

A second reason is to avoid discrimination. Applicants that feel disadvantaged, even if they are actually qualified, may hesitate to negotiate for a higher salary in the same way that a other applicants would. The consequence is that they start with a lower salary. This applies specially to women. Plenty of research shows that they are less likely to negotiate their salary.

I personally find it wrong that your first interaction with your employer has to be a salary negotiation. It comes across as if your employer is trying to cheat you when he offers a salary and subsequently you are able to increase it just by asking for more. A clear and open salary policy seems fairer to me.

Research suggests that pay transparency leads to lower average salaries because employers avoid paying higher wages to any one employee to avoid costly negotiations with others. The effect is small, around 2%, and it disappears with increasing degree of unionization. In my opinion this is an acceptable price to pay to reduce pay inequality, which often is much more than 2%. It is also a good argument for joining a union.

I hold mostly libertarian views. Therefore, in principle, I do not like unions and I believe that individuals should negotiate by themselves. In practice I belong to a union, because I read a long time ago that unionized employees earn more. I am pragmatic in this regard.

Update: It seems like the European Union will start requiring disclosure of pay range to job applicants.

Last updated: 2022-02-23