Pay Transparency: Why And How You Should Implement It in Recruitment

A massive catalyst took place in March 2023, when the European Union approved the Pay Transparency Directive. By June 2026 it will be mandatory for companies operating in EU member states to incorporate pay transparency principles into their HR processes. 

Read our detailed article for a deeper analysis of the EU Pay Transparency Directive.

But legislation is not the only reason why pay transparency should be on your table. Job seekers all around the world are starting to expect pay transparency from potential employers, starting from recruitment. A study by Gartner showed that a staggering 44% of candidates decided against applying for a job because the job description didn’t disclose salary information.

Why is pay transparency important? What are the best practices for incorporating pay transparency in your recruitment? Keep reading to find out!

Pay Transparency Is A Low-Hanging Fruit For Improving Your Employer Brand

Companies invest a lot of time and money in building their employer brand. But they often fail to see that videos, recruitment marketing campaigns, career stories, and other content are redundant, if the reality and actions don’t meet candidates’ expectations.

Adopting pay transparency in recruitment is a cost-effective and impactful way to attract candidates and stand out from the competition. According to Adzuna, less than 50% of job adverts featured salary information in June 2024. Duunitori’s 2024 survey revealed that less than half of employers have prepared to adopt pay transparency policies. By including detailed salary information in your job ads you promote yourself as a progressive employer. A healthy employer brand helps you lower recruitment costs and is a vital part of your overall brand as well.

Pay Transparency Allows You To Attract More High-Quality Candidates

Would you make the effort to apply and go through an extensive interview process only to find out the salary doesn’t meet your expectations, or is less than what you currently make?

As the Gartner study demonstrated, omitting salary information from your job ads might lead to a drastic drop in application volumes. And not only volume but the quality of applicants as well.

Highly sought-after talents are often currently employed or have a plethora of positions to choose from if they end up on the open market. These “unicorns” tend to shy away from job opportunities that don’t clearly state the salary range and other incentives. And why wouldn’t they? Would you make the effort to apply and go through an extensive interview process only to find out the salary doesn’t meet your expectations, or is less than what you currently make?

You might be thinking: “We ask for a salary request, so why does that matter?” Candidates tend to hate the guesswork that goes into deducing a position’s salary level. Thus they often lowball their request to avoid being knocked out from the recruitment due to a high salary wish.

Disclosing salary information is also an effective way to streamline your recruitment process. Why waste hours on screening and interviewing candidates who in the end are not willing to accept the job offer due to the salary?

Including a salary range transforms your job ads from candidate repellents to candidate magnets while saving you countless hours of unnecessary work.

Pay Transparency Promotes Pay Equity and Helps Fight Against Salary Gaps

Let’s face it–salary gaps are still very much a reality.

Forbes’ 2024 article has the numbers to back it up: black women earn just 64% and Latinas 55% of what non-Hispanic white men are paid, while even with a bachelor’s degree, women make only 74 cents for every dollar earned by male counterparts, with the gap widening at higher education levels.

Pay transparency and pay equity are not only admirable values but might also save you from costly litigations. Getting public attention for pay disparity inside your company is a recipe for disaster for your employer brand.

Introducing pay transparency internally is an effective tool in the fight to end pay discrimination and usher in an era of true transparency and pay equity. 

How To Implement Pay Transparency in Recruitment – Best Practices

As we have learned, pay transparency has multiple benefits. But as the old Japanese saying goes. “Strategy without execution is a daydream; execution without strategy is a nightmare.”

Follow these 3 steps to implement pay transparency in your recruitment and reap the benefits. 👇🏻

1. Include a salary range in your job ads

Introducing pay transparency right at the beginning of the employee journey is the most effective way to maximize return on investment.

Eliminate the guesswork from salary expectations and save time for all stakeholders.

Note that the EU Pay Transparency Directive states the salary range must be disclosed before the first interviews take place.

2. Provide a salary range that isn’t too broad

“2000-3500€” is not a real salary range.*

While you might feel tempted to provide a broad salary range to avoid paying someone more than they might settle for, don’t. Having too broad of a range is a good way to ruin a great strategy with poor execution, deterring potential candidates and negatively impacting your perception as an employer.

💡 Tip: You can also indicate salary ranges based on career level (e.g. “senior developer vs. junior developer).

*Unless bonuses and commissions are the reason.

3. Revise your salary levels regularly

Once you start implementing pay transparency, you must also audit your organization’s salaries on a regular basis. 

Along with auditing and adjusting employee salaries, it’s important to research competitive rates to stay up-to-date with market trends. This ensures you know the going rates for talent you are searching for, and that the salaries of your current employees are aligned and match their career level and tenure.

💡 Tip: A helpful tool for tracking salary levels is a salary matrix (salary scale).

4. Be consistent – promote pay transparency at all levels and in every recruitment

As in so many facets of running recruitment, consistency is the key to implementing pay transparency too. By excluding certain positions or job levels from pay transparency initiatives, you promote disparity inside your organization and candidates might perceive you as an unreliable employer.

While we fully understand that disclosing salary ranges during recruitment might not be feasible in select recruitments for higher-up decision-makers, aiming for 100% transparency is the way to go.

Hopefully, this blog managed to provide you with genuine insights about the role of pay transparency in building an outstanding recruitment strategy.

We at TalentAdore have adopted pay transparency as part of our recruitment process – you can find salary ranges in the application forms for our open positions.