Rise in pay transparency in Canada, exact salaries still scarce

Canada sees a surge in job postings with salary details, but precise figures remain rare

Rise in pay transparency in Canada, exact salaries still scarce

In Canada, the movement towards pay transparency is gradually making its way into job advertisements, although the revelation of precise salary figures remains uncommon.  

According to a report by Brendon Bernard, a senior economist, the incidence of job postings revealing some form of salary information on Indeed's Canadian site has more than doubled in the past five years, as reported by Financial Post. 

As of February, 49 percent of postings provided salary data, up from just 22 percent in 2019. This shift may be partly driven by job seekers' new salary expectations in a tight pandemic labor market characterized by record job vacancies and a spike in resignations.  

Employers discovered that including salary details attracted more applicants and reduced the time spent on negotiations, enabling faster role filling. Furthermore, transparency in wages was found to enhance employee retention by building trust, boosting engagement, and addressing pay equity concerns.   

Legislative efforts have also played a role in increasing the number of job postings with salary information.  

For instance, British Columbia enacted legislation in May 2023 requiring job postings to include pay details, resulting in a surge of listings with such information to 76 percent by February from 49 percent in the previous quarter.  

Ontario is considering following suit, as indicated by Labour Minister David Piccini, who stressed the importance of transparent pay communication amidst companies posting record profits.   

Despite these developments, employers tend to provide salary ranges rather than exact figures. Indeed noted that only 21 percent of Canadian job ads at the start of the year offered precise salary numbers, a decrease from 40 percent in 2019.  

The trend is particularly pronounced in higher-paying, white-collar industries, where the posted salary range can vary significantly, undermining the perceived transparency.  

For example, the real estate sector has a 65 percent disparity in the posted salary range, although the average gap across all industries has widened to 25 percent from 21 percent in 2019.   

The reluctance to share specific salary details might stem from a desire to avoid internal discord, as disparities in pay can lead to workplace tensions and resentment. In New York City, following the implementation of transparency laws, businesses reported issues with employees discovering pay inequities, leading to dissatisfaction and resignations. This concern over workplace harmony might explain why employers prefer not to disclose exact salary amounts, especially for positions that pay annual salaries.   

Nevertheless, the introduction of pay transparency laws has facilitated greater access to salary information for employees, particularly in sectors like tech, finance, and management, which have seen significant increases in transparent job postings.  

Yet, the impact of these changes on actual wage adjustments remains uncertain, with little evidence of a substantial shift in pay practices, at least in the early stages.