Recently there has been a renewed call for pay transparency, particularly regarding the concept of Equal Pay for Work of Equal Value as required by the Employment Equity Act. Several calls have been made to enforce bans on calls by employers for pay slips during the recruitment process, as is becoming the norm abroad.
As a recruiter who regularly discusses salary with both clients (employers) and candidates, the issue of pay affordability and market value has bearing. Whilst the current earnings of a candidate is important to know, I have personally experienced situations where individuals have acquired great experience but, due to having been joined the company (and been paid) as an entry-level employee, their current salary is below market-value for someone of similar qualification and experience. And when pay slips are used as the foundation for making an offer, they are inevitably disadvantaged.
It is for this reason that I believe that pay slips shouldn’t have a bearing on the offer that is made to a prospective employee. Rather, the organisation should be clear about the value of the role and what the pay range corresponds to, i.e. qualification, experience, specialist skill etc. Then, the prospective candidate should be considered in line with this range, and an offer made accordingly, even if it turns out to be a 30% increase on their current pay.
To assist this process, it would make sense to run job adverts that include the pay range for the role. However, many organisations avoid this because they come up against candidates who peg themselves at the upper end of this range, not necessarily realising that they don’t quite stack up to what the organisation would see as value for this higher salary.
Unless we shift our thinking, including getting over the idea that a job move should only mean a 10 – 15% increase on current salary, we’re not likely to close the pay gaps that exist due to previous discrimination or penalties for candidates who may have had long service in their existing companies, or who are making their first real career move beyond an entry-level role.
I believe that recruiters have a role to play in changing the conversation. By being transparent upfront with both clients and candidates, the recruiter can assist in managing the uncomfortable salary negotiation process.
Candidates must also take responsibility for their own salary negotiation too. I can count just as many candidates with unrealistically high salary expectations as those clients who undervalue the skills they’re seeking. First and foremost, candidates need to be clear about what they’re actually earning. So many candidates don’t fully understand their own payslips and discount the value of benefits afforded to them, or the way the package is structured from a tax efficiency perspective. As more companies move towards a Total Cost to Company (TCTC) this enables companies to manage their costs and allow individuals to structure the package to align with their personal needs.
Individuals should do their research on market value but, more importantly, take an objective look at how they can add value to an organisation. This is another area where working with a specialist recruiter can assist. Great recruiters understand the markets they service and can give a candidate a fair appraisal of their “value” relative to what is being sought by employers – qualifications, experience, skill sets, and of course equity considerations in the South African transformation context.