The term competitive salary signals below-market pay to a lot of job seekers. It’s better to include a salary range.
For a long time now, hiring teams have tried to boost their job ads by stating they offer a competitive salary. It’s a step up from ignoring pay altogether, but the term “competitive salary” actually works against the job ad. Including it is long-standing practice, but today’s job seekers want something new - pay transparency. (As do many local and state governments.)
Using “competitive salary,” “pay commensurate with experience,” or a similar phrase can deter qualified job seekers. It can reduce the size and quality of applicant pools, and it can put employers out of compliance with pay transparency laws too. These days, it’s better to replace “competitive salary” with a pay range (a realistic one).
The term “competitive salary” is problematic for a number of reasons. First, it can signal below-market pay. Behind the scenes, companies can do their best to meet or exceed the industry average. But that effort is undermined by using the term.
Second, it doesn’t follow the current trend of pay transparency laws. More companies are publishing pay ranges all the time. (Including ranges that are too broad to have any meaning, unfortunately.) And more jurisdictions are enacting laws requiring pay ranges in job posts.
Third and most important, it’s not what today’s job seekers want, which is information. Today’s job seekers want to see specifics in job posts. A pay range is top of the list, so they don’t waste time with unnecessary application processes.
And it’s not just about pay. They want to know what it’s actually like to work at a company. Specifics on healthcare, paid time off, retirement plans, stock options, and more are also important to them. (They even want to see a stance on diversity, equity, inclusion, and belonging.)
It’s in employers’ best interest to offer a pay range to job seekers, even before local or state laws require it. By doing so, they can attract applicant pools that are both larger and more qualified.