Pay transparency on the rise in Canada
People looking for new work are starting to see more information about the pay in job postings, but progress remains slow in certain sectors and exact salary figures are still few and far between.
Listings that offer some kind of pay transparency have more than doubled over the past five years on job postings site Indeed, according to a report by senior economist Brendon Bernard. As of February 2024, 49 per cent of postings on the Canadian website offered salary information compared to just 22 per cent in 2019.
Some of that growth may have been sparked by new salary expectations from job seekers in a tight pandemic labour market, which was marked by record vacancies and an uptick in resignations. During that time, hiring managers discovered that providing salary details won them more applicants while also cutting down on negotiating time, thereby allowing them to fill roles faster. It also helped them retain the employees they already had, with research showing transparency around wages builds trust, fuels engagement and can address pay equity.
But a wave of salary transparency legislation over the past few years has also worked to juice the numbers of such postings. For example, British Columbia in May 2023 passed legislation requiring that job postings include pay details. Employers responded, and listings featuring such info rose to 76 per cent in February from 49 per cent in the third quarter last year. Ontario could be next since the provincial government signalled its intention to pass transparency legislation in November 2023. “At a time when many companies are posting record profits, it is only fair they communicate transparently about how they pay workers,” Labour Minister David Piccini said in an announcement at the time.
Still, employers may not be providing salary information in the way politicians had expected. Pay ranges, not exact salaries, are becoming the norm in postings across the country, including B.C., Indeed said. Only 21 per cent of
Canadian job ads at the start of this year offered precise pay numbers, down from 40 per cent in 2019. What’s more, higher-paying, white-collar industries, such as finance, engineering and project management, are even less likely to post exact salary amounts. In some industries, the posted salary range between the low and top ends can be quite high, which doesn’t come off as very transparent. For example, it’s 65 per cent in the real estate sector, but posted ranges are on the rise in all industries, hitting 25 per cent from 21 per cent in 2019.
Overall, professional sectors that compensate employees with an annual salary are less likely to provide precise paycheque amounts than fields that offer lower, hourly wages, such as nursing, education and cleaning. “It appears there’s something about annual salaries (or the types of jobs that pay them) that make employers reticent to share pay info,” Bernard said in a posting on X, formerly known as Twitter.
One reason for that could be because employers are trying to avoid unnecessary rifts in the workplace. Managers have historically been hesitant to provide pay details for fear their current employees will discover they’re not getting as much money as colleagues, leading to uncomfortable silences and resentful workers. “Regardless of what (employers’) surface concerns are, it almost always comes back to the fact that someone eternally is being underpaid or overpaid,” Amanda Hudson, founder of Canadian HR consultancy group A Modern Way to Work, said when transparency laws came into effect in New York City in 2022. “Were these numbers known, if you know that someone who works half as hard as you makes twice what you do for the same job, you’re not gonna be happy.”
That scenario seems to be playing out across offices in the United States. Business leaders there say salary transparency laws have caused 11 per cent of their employees to discover they’re getting paid less to do the same job as co-workers, according to research from Payscale. It’s also driving some to quit, with executives saying 14 per cent of their staffers have resigned for jobs that advertised higher salaries.
Business leaders who pay yearly salaries may also be keeping amounts close to their chests in an attempt to save some money. “Employers might be more wary of posting pay in annual, rather than hourly, terms, as the latter still provides some flexibility in determining overall labour costs,” Bernard said in the Indeed report.
Regardless, pay transparency legislation can help get more information about money into the hands of employees, as seen in B.C. Sectors that previously shied away from talking about money in job listings, such as tech, finance and management, have experienced the biggest growth in such postings with gains as high as 35 percentage points.
Of course, the bigger question is whether this means B.C. workers can now expect wage hikes when they start a new job, since they’ll have a better idea of what others are getting paid. The answer, at least at this point, might come as a disappointment. “So far, there’s little indication of a substantial change,” Bernard said in the report.