The energy sector is currently experiencing challenges in sourcing talent, meaning candidates still hold the cards in the labour market. This has made it far more challenging for employers to recruit suitable candidates with the right skills. So how should companies respond? One method is through disclosing the salary in job adverts - arming candidates with the information they need to make informed decisions.
Addressing the skills shortage in the energy sector
There’s no denying the growth prospects in the energy sector. A renewed commitment to net zero targets and a shift in societal buy-in means that green jobs are growing at approximately four times the overall UK employment market rate. But the increase in demand doesn’t mean skilled workers are available to fill these roles.
The skills shortage in the energy sector is fuelled by an ageing workforce and inadequate training, with 34% of energy recruiters citing those as one of their biggest challenges. Employers face greater competition to attract and retain skilled workers in increasingly short supply.
Why salary transparency matters
The job market is a different place compared to 10 years ago. The pandemic has shifted individuals’ priorities and expectations of what a good employer and the best recruitment process look like. To be competitive, firms need to up their game, starting with the first candidate touch point: the job advert.
It’s no secret that job adverts that disclose salary information experience an uptick in applicants. Advertising the salary band from the start not only manages both parties' expectations but also shows a company’s attitude towards transparency. Combined with early conversations around benefits, bonuses and other remuneration details, it creates a more engaging, open process for the applicant, reflecting positively on the business.
In a candidate-driven market, it’s essential for individuals to feel empowered and presented with the facts early on so they can make an informed decision, not only about the salary they want to accept but also about the type of place they want to work. Salary transparency is as much about showcasing values as respecting a candidate's time.
The impact on retention and recruitment
In the current talent climate, there are two things employers need to consider. First is how to appeal to more highly-skilled candidates. The second is ensuring current staff remain happy and engaged with their work. The good news is that salary transparency can help with both areas.
In a candidate-driven market with a shortage of skilled applicants, disclosing salaries enables individuals to make more informed choices. It’s likely they’ve got multiple offers or are in numerous selection processes, and when they need to make a decision, they need all the facts. Suppose a firm hasn’t disclosed salary information in the job advert, and the potential recruit has had a competitive offer elsewhere. In that case, they’ll likely withdraw from the process, losing the business a highly skilled candidate. This can be a highly frustrating scenario, particularly if the firm was able to match the offer but missed out due to a lack of transparency.
Increase in applications
There’s no denying the role salary plays in the attraction process. Being open and honest about the pay offered for a particular role attracts a candidate’s attention. When we also consider that just 12.6% of employers share that information, it really can give a firm a competitive advantage. It’s important that employers also consider that they may have the most competitive remuneration package. However, without sharing this information, a candidate won’t know that and businesses could be unnecessarily limiting their hiring success.
Job titles need to be clarified. At one company, it’s one level, while at another, it’s a lower one, but how would a candidate know that without the salary? Providing the salary upfront also allows you to communicate the role level. They allow candidates to self-select or eliminate if they are qualified, increasing the quality of applications.
Shows value to existing employees
It’s not just potential new employees that are driven by salary. Our latest Energy Outlook Report found that pay was the number one reason why energy workers consider leaving a role. Disclosing wages allows existing employees to benchmark themselves against their peers and other opportunities. They are, hopefully, reinforcing their value to the business and helping them feel appreciated and adequately compensated so your top talent stays with the company rather than looking elsewhere.
Closes pay gaps
When businesses start disclosing salary information in job adverts, it prompts existing employees to compare their pay to new opportunities. This can cause friction internally if there are vast differences in salaries. When the business addresses this, it starts to close, or at least reduce, pay gaps. This is an impactful step for employee engagement and retention, though it can be challenging. 25% of hiring managers say that their decision not to post salaries externally is not to rock the boat internally.
While there are undoubtedly challenges in rolling out salary transparency, there are undeniable positive impacts—an increase in applications, higher quality applicants, more engaged employees and a competitive advantage. For energy businesses struggling to recruit - it should be a straightforward decision.
At Oilandgasjobsearch.com, we just launched a salary checker focused on compensation within the energy industry. This new tool, created with the support of our global partner NES Fircroft, allows candidates to benchmark their pay and create more transparency within the energy recruitment market.