New report links salary secrecy to candidate loss among NZ employers
Most employers in New Zealand that do not include pay details in a job advertisement have lost a candidate because of salary misalignment, according to a new report from Robert Half.
Its latest poll among 250 hiring managers found that 47% of organisations have "frequently" lost a candidate because salary expectations were misaligned after pay details were excluded in a job advertisement.
Another 40% said they have "occasionally" lost a candidate for the same reason.
The findings indicate the consequences of salary secrecy during recruitment, according to Morgan Alexander, managing director at Robert Half.
"Failing to disclose salary information can slow the hiring process and undermine recruitment outcomes," Alexander said. "Given current labour market conditions, losing even one strong candidate can create flow-on effects for productivity, team morale, and business continuity."
Alexander attributed the findings to candidates practising greater financial scrutiny amid cost-of-living pressures.
"In a market where skilled professionals are time-poor and increasingly selective, transparency gives employers a clear competitive edge," she said.
"Employers who leave compensation discussions too late risk moving high-quality talent through several stages of the hiring process, only to lose them at the final stage which is a costly outcome in both time and resources."
Benefits of pay transparency
In contrast, 92% of employers in New Zealand who include salary information on the job ad said it improved the quality of applications that they received.
More than a third (28%) said the improvement is significant, while only two per cent said it reduced the quality of received applications, according to the report.
In New Zealand, nearly a quarter of employers practising pay transparency do so to attract more talent (24%), build trust with candidates (23%), and reduce candidate drop-offs due to unclear expectations (23%). Others cited the following factors:
- To reduce time spent on salary negotiations (20%)
- To reflect their commitment to pay equity (20%)
- To remain competitive (19%)
Alexander acknowledged that while there are valid reasons for not disclosing salary information, allowing it will deliver various benefits to employers.
"While there are valid reasons some employers may choose not to disclose salary information upfront such as preventing potential internal pay discrepancies among current employees, allowing flexibility for the right candidate, or when the scope of a role is still being finalised, being upfront with salary banding helps establish a clear baseline for expectations, supports more informed conversations, and reduces the risk of misalignment as the hiring process progresses," she said.
The findings come nearly a year after the New Zealand government passed a law that promotes pay transparency in workplaces. Under the law, employers are prohibited from taking adverse action against employees who engage in pay-related conversations at work, such as disclosing their pay and asking a colleague about their pay.
While the law does not ban pay confidentiality clauses in employment agreements, it limits how they can be enforced, according to Employment NZ.
