SEPTEMBER 5 ― Muar MP Syed Saddiq’s recent proposal that the government enact the Salary Advertisement Act, so that employers are required to advertise salary scales for the jobs they are offering, has met with expected controversy.
There’s nothing like “full disclosure” to get those required to do the disclosing up in arms, is there?
The Malaysian Employers Federation (MEF) responded by saying that such wage transparency may limit the ability of suitable individuals to obtain a higher wage.
Conversely (or contradictorily?), it also noted that revealing salary schemes may chase away investors.
My first impression was that this is rather convenient, isn’t it?
So, as I’m sure the MEF is fully aware, there is already an asymmetry at play ie. employers don’t need to be transparent about how the salary range for the job, but job applicants must show all their cards.
What’s up with that?
Furthermore, as five minutes browsing JobStreet will confirm, there are already many companies which include the salary range in the job ad. This isn’t some amazing new never-before-tried idea.
Has investment (both foreign and domestic) fallen off as a result? It’d also be interesting to see if these companies, as per MEF’s concerns, have problems paying above-par staff higher salaries. I somehow doubt it.
Another objection was that revealing salary schemes will make job applicants run after the higher paying jobs as opposed to those which fit them better. I don’t know about the rest of you, but I’ve never clicked “Apply” on a job ad for Chief Technological Officer or any high-sounding position involving IT. Why? Because I, uh, don’t have any tech qualifications, duh.
Then again, if a company is serious about getting a good candidate for, say, a managerial position in consulting, wouldn’t the hiring team want the very best the market can offer and wouldn’t it help to attract this very best by publishing the awesome pay that comes with the job?
In fact, executive hiring platform Michael Page seems to do precisely this. Their published salary ranges invariably attract many applicants and, heck, it’s simply their job to screen and filter out those who are merely applying for fun.
The other side of the story?
Yes, there is another side. As someone who’s had about seven years in HR and who’s been involved in hiring, I can’t deny this.
The first thing is that the hiring process is more complicated than most job applicants understand it to be. A standard scenario or “process flow” is:
a) top management gives each department a sort of employment budget
b) hiring managers need to justify their hiring and answer 20 questions about role and salary
c) HR is then tasked to search, screen, contact and (together with the hiring person) interview the applicant, etc.
We all know what can happen after c). Best-case scenario everyone’s happy with each other and the person reports to work within three months or less. Worst-case scenario there’s a lot of ding-dong-ding-dong with all parties refusing to say anything which locks them in and the dance continues until someone just backs out of the arrangement entirely.
And the poor HR team has to re-do the process all over again.
Thus, here’s the rub when it comes to wage transparency: Anything (like forced wage transparency?) which makes the above process even more complicated isn’t going to be welcomed by the company.
An official salary scheme will require more time in salary surveys, it will mean one more item for higher-up approval, it will be one more issue for public scrutiny, long and short it’s one more target to track.
When you add this up over hundreds of jobs in a year, this isn’t a small amount of work; sadly, for many a HR team they’re not gonna be, uh, paid more for being responsible for these things.
And, knowing bureaucracies, each time you put something out there in public, it will come under scrutiny (both official or otherwise) eventually which means more reports, more justifications, more meetings, etc.
Also, right this moment, there are thousands of employees who are probably earning below the “market rate”. Should their particular role’s official wage scheme be made public, I can only imagine the zillions of phone calls to HR demanding to know why they were offered less.
This is potentially a HR nightmare on a grand scale.
Point is, not including the salary scheme in the job ad simply gives the employer (and the exhausted HR team) a bit more leeway in navigating the situation.
Finally, I’m willing to bet a tenth of my monthly pay that should wage transparency become mandatory, the overall salary range will fall throughout the industry (at least in the short term), as this is how organisations generally deal with forced initiatives.
Anyone who’s been in charge of paying salaries will understand this.
For everyone else, well, of course the more information we have the better. There’s just no downside to us knowing more — or at least that’s what we believe.
* This is the personal opinion of the columnist.