Getting Comfortable with Salary Ranges

On November 1st all job postings in BC will require that expected pay, or pay range, be included on the job posting. Seems simple enough but if you are not transparent about pay inside the organization and you start posting salary levels for all the world to see, that might bring up some conversations that you are not prepared for!

 In BC, the government recently provided clarification on how pay is to be posted:

• The expected wage or salary or expected wage or salary range must be included within the job posting as either a flat hourly or annual rate or as a range (hourly or annual).
• If stating a wage or salary range on publicly advertised job postings, employers must not include an unspecified minimum or maximum amount. For example: “$20 per hour and up” or “up to $30 per hour” does not meet the requirement.
• At this time, the Province is not providing guidance on how large the range on an advertised wage or salary range can be. This is at the employer’s discretion. 
• Employers do not need to include bonus pay, overtime pay, tips, or benefits on job postings. They may voluntarily choose to include this or other information if desired.

More details are available on the B.C. government website

At Engaged HR we recommend that where possible, you post a salary range verses a single pay rate, as it will provide you with greater flexibility and will ensure that you have room to negotiate with candidates. We do of course also recommend that you monitor all final salaries for equity across genders, roles, and departments.

A format that can help everyone get comfortable with a range approach is to define the mid-point of the range and then apply a consistent percentage above and below the mid-point (for example 15% above and below). For a position that has a salary of $50,000 as the mid-point, the range would be $42,500 to $57,500.

As a general guide to working with compensation ranges, the following table provides a high-level overview of what it means to be compensated at different levels within a salary range. This can be helpful to understand where to place someone within a range.

Here are some other tips when managing within a range:

1. Start with a compensation philosophy and share it with employees. The more transparent you are, the more opportunity there is for its employees to understand and accept that aspect of the employment relationship. Clear communication and key messages on an organization’s approach to compensation reinforce the practices and foundation to manage compensation decisions on an ongoing basis.
2. Ensure all leaders are knowledgeable and comfortable working within the compensation structure that has been established. Educating leaders on the organization’s philosophy and providing them with both a thorough understanding of compensation and the tools and resources to effectively apply the compensation structure that is in place promotes maintaining integrity within the system.
3. Hold leaders accountable for the rationale associated with where they are placing someone within a range. Leaders need to work within the organization’s defined compensation practices to maintain the integrity of the compensation structure.

Pay transparency is going to have an impact on all organizations and isn’t going away. Take one step at a time and you will see the benefits of clarity, communication, and consistency really pay off.