Organizations seeking to fill vacancies have traditionally been rather coy when it came to publishing compensation on postings for job openings.
After all, many view compensation as a “competitive advantage” or disadvantage, depending on the viewpoint, says Paola Accettola, chief executive officer of True North HR Consulting. She adds that typically private companies bristled at the notion of posting salaries, arguing it should be their decision whether or not to cite compensation for job openings. Some organizations feared posting salaries could lead to competitors to target their talent with more generous compensation packages, Ms. Accettola says.
Now that norm is now largely falling by the wayside as major employers compete for talent in a tight job market for skilled workers and must abide by new rules, she notes.
Companies are shifting from secrecy to openness, helping close wage gaps
One key factor pushing the needle toward disclosure in Canada is new legislation in the nation’s largest labour markets stipulating postings must include wage ranges. “In Ontario, the legislative framework is there now – though the details are to be determined,” says James Fu, a lawyer specializing in labour and employment, and partner at Borden Ladner Gervais LLP (BLG) in Toronto.
Referring to recently passed Ontario legislation, enacted in March, the new law requires employers to disclose salary ranges. Yet actual regulation detailing phrasing around pay disclosure, or how the rules will be enforced for those failing to comply, remains to be seen, he says. “So the house has been built, but it’s not quite ready for occupancy.”
Employers brace for impact as transparency laws set new standards for pay equity
While uncertainty reigns for now, what is clear is compensation transparency will soon be the norm – if not the law – in Canada, and the change is for the better for workers and even for employers, many human resource experts say.
Georgia Harper, president at The Headhunters Recruitment LP in Vancouver, says posting salaries helps respect people’s time as it can be frustrating for an employer to take a candidate through a lengthy interview process only to be turned down due to salary expectations.
“Posting salaries demonstrates that an organization is willing to be honest and transparent and helps attract candidates whose expectations align with the offer,” she says, and it also: helps reduce wage disparities based on factors such as gender, ethnicity or age.”
Ms. Accettola notes that parts of the industry are already moving ahead of regulation.
“If you post a job on Indeed – probably the largest job site that everyone uses – you need to include pay ranges.”
In May, Indeed announced the rule change to promote pay transparency, citing that prospective candidates are looking for salary information, while adding it helps promote pay equity. The online job site referred to its own recent survey showing 80 per cent of workers say being paid fairly is a top consideration when taking a new job. As well, Indeed’s poll found 67 per cent of job seekers consider salary information the most important part of a job description. Many jurisdictions in the U.S. are implementing pay transparency mandates, and Indeed stated it wanted to lead widespread adoption with its policy change.
Legislation drives change in Canada’s largest labour markets, setting a new hiring precedent
The shift is also widely seen as a step toward ending the gender pay equity gap. “There’s still a massive divide between males and females,” Ms. Accettola explains.
A 2023 Statistics Canada report illustrates just how wide that gap is. Despite improvement over the last 25 years, it found Canadian-born women on average earn about 9 per cent less than Canadian-born men. “It’s all trending in the direction that people should be paid fairly,” she says, noting pay transparency also will help minority groups, who often are underpaid even more.
The new Ontario legislation may be the most impactful so far, but it’s not the first jurisdiction to do so. British Columbia enacted legislation in 2023. It now includes regulation regarding publishing wage ranges. For example, postings cannot state ‘$20 per hour and up’ or ‘up to $30 per hour,’ but they can state ‘$20 to $30 per hour.’
Prince Edward Island also has enacted similar legislation in 2022 – though, because of its size, its regulatory shift likely has less impact on Canada’s overall market compared with B.C. and Ontario.
Job seekers gain clarity and confidence as pay transparency becomes the norm
Human resources professionals are already preparing ahead of official implementation in Ontario, says Philippe de Villers, board chair of Chartered Professionals in Human Resources Canada (CPHR).
“Posting wage ranges is the easy part, but before you do that, you need to make sure your people in similar positions are within those pay ranges,” says Mr. Villers, who is based in Montreal.
“If the posting says $80,000 to $100,000, the first question an employee – [who is] earning $80,000 – will have is: ‘How come I am not earning $100,000?’ "
Posting salary ranges can also be more complicated for senior job openings, adds Ms. Harper. “A role could be somewhat malleable and tailored to the specific skills and expertise [of a potential employee] … and therefore the compensation may also be flexible.”
Ms. Harper notes the new rules are likely to involve some trial-and-error for employers to find the right range. She also suggests they provide more than wage information, and include health benefits, vacation, stock options, child-care and bonuses, to attract top talent. “Salary is only one piece.”
Although many welcome transparency, some employers are also concerned the rule changes could create even more salary inflation – already a worry coming out of the pandemic, Mr. Fu says. “Given the potential, if there are any internal adjustments to be made, those should be done sooner rather than later.”
If current employees are compensated fairly, organizations face a diminished risk of losing them to other employers posting better wages, he adds.
All of this is to say being pro-active is in an organization’s best interests, Ms. Accettola says.
All of this is to say being pro-active is in an organization’s best interests, Ms. Accettola says
Leading employers already view pay equity and transparency as central to their diversity, equity and inclusion (DEI) policies, which help attract leading applicants especially among millennials and generation Z.
“Best-in-class organizations are looking at change more through a DEI lens rather than being motivated by legislative change alone,” Ms. Accettola says. “And pay equity and pay transparency really are where the rubber hits the road.”