Charlie Franklin* says pay transparency will change the recruitment game.
How would you define the perfect job offer? Some people think it’s about finding a magic number that will seal the deal with the right candidate.
But smart recruiters know it involves much more than that.
Compensation negotiations have always been complex.
But now they’re changing in some fundamental ways.
This is largely thanks to new pay transparency laws, which mandate that employers include salary ranges in job postings.
As a result, here’s what I see ahead…
How pay transparency changes the hiring game
Pay transparency is a boon for job seekers, who will have access to much more useful information about open positions.
But this doesn’t need to be a zero-sum game.
No doubt, many employers will adjust their tools and processes.
And that means recruiters can prosper under these new pay transparency rules.
How?
For recruiters, the goal is the same as always — bring the perfect offer to the table.
But now, the way to get there is likely to be different than it was in the past.
Making a perfect job offer has always required a balance of three key objectives — fairness, cost-effectiveness, and competitiveness.
But these elements are dynamic.
The balance is always shifting.
So the more you understand how these relationships are changing, the better.
Imagine this: A knowledgeable recruiter leans more heavily on one of these three objectives when making an offer.
That strategy might work in today’s hiring climate.
But what about next year? Without the right tools, the same recruiter may not have enough information to make reliable decisions.
Instead, compensation will be based on guesswork.
And this could jeopardize the balance that holds these offers together.
To build more solid job offers in 2023, take a closer look at the 3 factors I’ve mentioned:
The three pillars of a perfect job offer
- Fairness
Candidates should be paid fairly.
It may sound obvious, but with new pay transparency laws, recruiters have a more important role in making sure this is the case.
Fairness can be tricky to prove because it’s relative.
Start by comparing candidates with their own abilities, with employees who do similar work, and with others in your organization.
But keep in mind that it’s not enough for you to think an offer is fair.
A candidate must also believe it’s fair.
That’s because candidates are much more likely to accept an offer they think is fair than those who think it’s based on guesswork or gamesmanship.
How can you convince candidates that an offer is fair? Don’t assume they’ll take a recruiter’s word for it — they want to see the data.
That means your organization will gain a significant advantage if recruiters are able to show their work.
This is possible to do with modern data analytics tools, even at scale.
- Cost-effectiveness
Your recruiters should be able to attract the best candidates to your organization at the right price.
This sounds like a reasonable expectation.
But what, exactly, does it mean?
Too often, organizations treat recruiting simply as a cost centre.
They set a budget and expect recruiters to work within those parameters.
That’s important, but there’s so much more your talent acquisition team can accomplish.
Even now, as the economy experiences a downturn, recruiters aren’t just sourcing scouts who fill open positions.
They’re also talent strategists who can think holistically about your business needs and goals while also providing the best candidates at the right price.
A compensation strategy involves so many complex elements: workforce planning, budgets, guaranteed vs.
at-risk pay, and financial performance.
The effects of compensation decisions reach far beyond any individual job applicant.
In fact, deciding how many people to hire and determining what to pay them are among the most costly and important decisions any business leader must make.
So, as the economy continues to sputter, cost-effective job offers are increasingly important to every organization.
- Competitiveness
A job offer should balance the chance of a candidate saying yes with the compensation cost to the organization.
Understanding what’s at stake is essential in today’s environment.
This is why many employers are upgrading their compensation analysis tools.
Because in a volatile labour market, good data makes the difference between successfully navigating choppy waters and crashing against the rocks.
In a way, cost-effectiveness and competitiveness are two sides of the same coin.
Recruiters want to make offers that help their organization manage costs, even as they attract and retain top talent.
But without the right data, finding that balance can be difficult.
This is where recruiters are most likely to make mistakes.
In a white-hot talent market, landing qualified candidates can be a struggle.
In a down market, it’s a challenge to stay within prescribed budgets.
That’s why the perfect offer deserves as much market intelligence as possible, no matter what the hiring climate may be.
Getting ahead of the curve
Fair, cost-effective, and competitive.
A perfect job offer must balance all three.
Recruiters can get ahead of the curve now by taking tangible steps to implement this three-pronged strategy.
Specifically, they can focus on using the right information, ensuring that processes are accountable, and communicating about pay throughout each step of the recruiting journey.
At its core, a perfect job offer is based on the best available compensation insights.
For successful employers, that means real-time data that indicates what job seekers expect to be paid, what candidates are offered and are willing to accept, as well as what internal data says about existing compensation standards.
The era of pay transparency is here.
It may be new, different, and perhaps even a bit intimidating.
But it’s also an exciting time to be a recruiting professional.
Because, if you’re willing to adapt, a perfect job offer is always within your reach.
*Charlie Franklin is Co-Founder and CEO of Compa, a new way to make smarter offers and gather real-time compensation market data.
This article first appeared at talentculture.com
