WAGE TRANSPARENCY AND INFORMATION ACCESS
How do you know your pay is fair when employers are not upfront about pay during recruitment?
When you negotiated wages with your employer, did you know how much they were willing to pay before you said what you were willing to work for?
Did you show your payslip without knowing how much they were willing to offer?
In South Africa, information about wages is becoming increasingly difficult to find.
Job adverts don’t include pay ranges and when you attempt to research compensation, you are immediately confronted with a lack of information.
Pay secrecy means employers can use the process of recruitment to offer unfair wages.
Recruiters often acquire rival firm compensation information for prospecting employers without being upfront about wages themselves. They use competitor payslips to poach talent and price-fix wages and in that way, obstruct a fair competition for talent in labour markets.
Employers don’t want to pay more than they believe they have to.
They use payslips to verify what you conceded to work for in the past and use this to establish a basis for a future offer.
This is contrary to how recruitment and human resource practitioners are trained.
The academic field has always maintained ‘price jobs not people’ to ensure fair labour practice.
Compensation packages are organised in bands according to roles and organisational preferences. Preferences can be based on market competition.
For example, if a company specializes in offering a scarce skill and is making a lot of money. They may want to hire an exceptional receptionist to manage clients first brand experience with them.
They would update the key performance requirements for the position to appeal to an ‘exceptional’ applicant and then decide where this position should fit within their compensation structure. They would identify the applicable salary range and add the position to that band.
Perhaps the firm used to offer 13k to meet basic expectations and now wish to create a higher level role for 27k. They can do so as long as their budget can accommodate the goal.
When the firm advertises the role, they would include the specialised KPAs and a salary range to achieve optimum quality applicants. Research proves that adverts transparent about pay receive a larger pool of talent, especially women.
Pay Secrecy is for Unfair Pay
Employees often don’t know how their pay compares to other workers as the offer recieved was based on own expectations and salary history.
These job applicants can’t be certain that the offers they accepted were according to organisational policy or unfair negotiation advantages.
In the labour market, employer pay secrecy is used at three specific points during recruitment to create advantages for themselves:
- No pay information in job adverts means the market signal is inherently inefficient, creating barriers for applicants
- Employers who are not transparent about pay, contact applicants to coerce pay history and current pay expectations from them without disclosing the salary range for the position advertised;
- Recruiters use payslips or ‘current cost to company’ information to poach talent from rival firms and price-fix talent.
These are just some of the behaviors identified that perpetuate and institutes inequality and a lack of justice in society and labour markets.