Topics: Salary transparency, war for talent, recruiting, application, IT industry, legal industry, University of Lucerne, Lucerne University of Applied Sciences and Arts, SwissDevJobs.ch, Weblaw, Lawjobs.ch, Jusletter.
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The debate on pay transparency is gaining momentum around the world. For example, EU member states are required to introduce transparency tools into national law by June 2026. Switzerland, which is not directly affected by the EU directive on pay transparency (in force from June 2023), is nevertheless confronted with a growing interest, in particular in actively tackling (gender-based) discriminatory pay inequalities.
For public services, transparency is a fundamental principle, which includes salary transparency, subject to data protection and other conditions. According to a growing number of voices from research and practice, the introduction of (approximate) pay transparency in private companies brings not only new challenges but also benefits.
Learn in interviews with Dr. Anna Sender, a renowned expert in strategic Human Resource Management (HRM), who published a significant study on salary transparency in 2018 with her research team, and with Janusz Greg Tomasik, co-founder & CTO of established job platforms such as SwissDevJobs.ch, who has revolutionized IT recruitment with the disclosure of specific salary ranges, about how salary transparency can be implemented and the opportunities and challenges it presents, especially for private companies in a tense recruitment market.
Good day Dr. Sender, and thank you for being available for this interview. You are an author, lecturer and distinguished researcher at the Hochschule Luzern and the Universität Luzern. You specialise in talent management and compensation. In your opinion, is external salary transparency in job ads an effective tool in the war for talent?
There's no clear answer. Salary transparency in a job ad is a signal of an open culture and the importance of fairness. So salary transparency needs to be in line with the company culture.
Studies have shown that salary transparency in job ads can attract candidates who would not otherwise apply. Salary transparency in a job ad allows candidates to better assess whether the position is right for them. At the same time, it can deter certain candidates from applying because it suggests that the salary cannot be negotiated beyond that point. In fact, studies show that salary transparency leads to salary compression, and outliers at the top end are almost impossible.
Therefore, it's important to first review and internally communicate the salary system and salary bands. - Dr. Anna Sender
It's also important to note that external pay transparency can also have an effect internally. For example, communicating a salary range for certain positions makes it clearer internally who earns how much. That's why it's important to first review and communicate the salary system and salary ranges internally.
In which countries is external salary transparency not a taboo subject and does it lead to more successful recruitment?
In Scandinavia, salary is not a taboo subject. Unfortunately, I have no data on how this affects recruitment. But perhaps a more interesting comparison is by sector in Switzerland. Our studies show that in certain sectors (e.g. education) salary transparency is often the norm. In others (e.g. finance) it is rarely the case. Depending on the sector, salary transparency can therefore be a unique selling proposition and support recruitment.
*In November 2023, 101 people took part in a Weblaw community survey on salary transparency. The slideshow above (6 images) summarises the results.
What do you make of the survey results?
I find it interesting that so many people are in favour of salary transparency. This is in line with a trend; salary as a taboo subject is also shaky in Switzerland. Studies show that younger employees and those who earn less are in favour of salary transparency. They hope for more fairness and possibly benefits. Employees with higher salaries are less in favour of salary transparency. They fear that their colleagues might become jealous and that salary transparency might have a negative impact on the company climate.
It is also essential to prepare and support supervisors in conducting conversations with employees about potential salary differences. - Dr. Anna Sender
In fact, studies confirm that employees who are paid less and do not understand why become jealous and less helpful to others who earn more. It is therefore important to review and communicate the pay system internally before disclosing salaries. It's also important to prepare and support line managers in discussing potential pay differentials with employees.
Thank you very much for your thoughts, Dr. Sender. We wish you all the best.
When we asked who we could also interview from the field, the choice quickly fell on you, Mr. Tomasik, because hardly anyone is as familiar with this topic and drives it forward as you. Before co-founded SwissDevJobs.ch, you were a software engineer and are now CTO. How did you get there?
I studied robotics at the Faculty of Computer Science at the AGH University in Krakow. At some point during my studies I switched to software engineering and managed to get my first junior position (I had to send over 70 applications to get 1 offer). After university I moved to Switzerland, where I first worked at a web development agency - Quatico, and later at a quant company: Swissquant.
That is why I decided to create a job board that I would use myself, with easy filtering and transparent information about the job itself, including the salary. - Janusz Greg Tomasik
Your job boards, especially SwissDevJobs.ch, are very popular. What distinguishes SwissDevJobs.ch from traditional job boards?
When I changed jobs during my time in Switzerland, I went through the same painful process of finding suitable jobs. And I mean really painful, because the generic job boards don't have good filters and the job descriptions themselves are completely freestyle. That's why I decided to create a job board that I would use myself, with easy filtering and transparent information about the job itself, including the salary.
What feedback do you get from jobseekers and employers about the salary transparency on your job board?
Jobseekers love it and that's one of the reasons why they prefer us to other job boards. Employers are either positive, neutral or sceptical.
The sceptical companies are those that have a management veto on salary transparency. This means that the management simply does not allow salary ranges to be published, for reasons such as not wanting to give information to competitors or not having a clear salary structure internally (someone might be underpaid and they don't know it). Or they simply want to keep this information to have an advantage in salary negotiations.
Those who see it positively are mostly companies that are embracing the wind of change and understanding that they can be ahead of the pack.
What effects does salary transparency have on recruitment?
Many companies are proactively sharing salary ranges in their job ads because they understand the benefits:
- Great time savings in the recruitment process (because candidates know what they are applying for) and
- A stronger employer brand.
Basically, they get more candidates overall and more candidates who are suitable.
How do you see the opportunities and challenges of such a transparent approach?
The biggest risk is the internal transition from not sharing salaries to doing so. Companies will have to check their internal salary data to see if they have underpaid people who may be shocked that the company's range is much higher than what they earn in the same position.
Companies that want to make the switch to transparent salary information in job ads should first review their internal pay scales to ensure that everyone is paid fairly and in line with their experience, performance and position. Once you have made the switch, things will be easier as you will attract more candidates and people within the company will also appreciate the transparency.
I think the future of job search will be around tailored job boards and agencies: it's too hard for big players like LinkedIn to serve everyone. - Janusz Greg Tomasik
How do you see the future of job search and recruitment?
I think the future of job search will be around tailored job boards and agencies: it's too hard for big players like LinkedIn to serve everyone. Experienced candidates (especially in IT or legal) don't have much trouble finding new roles and will prefer a concierge approach. That means a niche job board that caters to their needs or a specialist recruitment agency that understands the industry.
I am not a big fan of 1-click apply or easy apply for the reason that companies are often already inundated with lots of unsuitable applications. ChatGPT will make it even worse, as everyone can now pretend to have written a personalised application.
My tip for candidates who want to stand out: do your research and write 1-2 sentences that are really personal about what you like about the company's products or engineering approach. Try to connect with people on LinkedIn and build meaningful relationships.
Thank you very much for your answers Greg, it was a pleasure to interview you. We wish you continued success with your recruitment solutions.