Why aren't companies upfront about salaries?

My favorite part of my first job search after college was pretending I was applying to work at an insurance company for the love of the game. As if I would neeeever find happiness if I couldn’t work in insurance.

Money? Money had nothing to do with it. Again: in it for the love of the game.

This is the kind of dog-and-pony show you must go through when looking for a new job. Companies are rarely open about the salary range in their job descriptions, and some consider it taboo to ask about it in an interview.

Why?! Why are so many companies not upfront about what they’re willing to pay you to work for them?

Your future colleagues might find out how underpaid they are

Salary transparency prevents people from being underpaid. If I know how much you’re making and you know how much I’m making, we can compare how much each of us is getting paid based on our experience and performance.

Hiding salary information benefits one group: the company hiding that information. While I think it’s stupid short-sighted to underpay your current employees, it means a short-term cost savings for the company.

In these companies, your total earnings mainly depend on how much you negotiate for your starting compensation. How often do you negotiate starting salaries? This negotiation should not have such an outsized impact on your earnings.

How do you solve this problem? Put the salary range in the job description. It’s not complicated.

The company might have to pay more than their minimum

Employee salaries are usually the biggest component of a company’s budget. So companies create forecasts to plan how much they’ll need to spend on hiring in the future.

In short, this means that a company knows roughly how much they’re willing to pay you. If you don’t know what this range is, the offer becomes a negotiation. Their first number is a feeler—the first step in the dance.

The company’s goal is to minimize your compensation. You would have too much leverage if you knew the compensation range to start.

If a company isn’t upfront about the salary range, they're trying to minimize your salary.

What to do about it

Have you ever heard that bringing up salary during an interview is taboo? This is a family-friendly newsletter, so I’ll keep it in check, but that’s some bull….stuff.

Most companies don’t share what you might get paid when applying for a role online. It’s a silly reality (one which we’re aiming to change - stay tuned), but a fact nonetheless.

So you apply for a job without knowing how much it pays. Then, the company reaches out to you for an interview. Great! You study the company and read the job description 1,786 times.

The conversation with the recruiter goes well, but compensation never comes up. At the end of the interview, you have a chance to ask questions.

You have a choice: do you ask about compensation? Unless you’ve been applying for a few months and are struggling to get interviews, you should 100% ask about compensation!

What do you have to lose? If a company takes offense at the question, I can assure you they would never pay you what you deserved anyway.

What if they ask for my expected compensation?

If they ask you what your expected compensation is, state a number at least 20-30% above what you’re aiming for. In my experience, job seekers routinely underrate their value.

In the worst case, they’ll tell you that’s more than they budgeted. Then you have a chance to ask what they budgeted and tell them you're still really excited about the role.

There is a massive power imbalance between you and a company in the job search process. They decide when to respond to you, whether you advance to the next interview stage, whether you get an offer, etc.

It seems insane that we exacerbate that problem by letting companies hide how much they’re willing to pay you.

Remember, this is a negotiation. Make your opening bid (aka your desired compensation) a solid place to work from.

Things are starting to change

Covid re-shaped what you can expect of your employer. For the first time, many people realized their leverage and value. As a result, work from home is here to stay.

The next step is to demand more of employers in the job search process. Don’t accept being ghosted after interviewing for a role. Don’t accept doing 10 hours of work for free to prove yourself. Don’t accept pretending to not care about your pay.

7 US states now require that companies disclose their salary range in their job description. New York will be the 8th state in November 2022.

Things are starting to change; just keep demanding more.