If you’re currently engaged in a job hunt, you’ve probably noticed the term “competitive pay” has become more prevalent. However, does the ambiguous nature of the term indicate the company doesn’t actually pay a competitive salary? We’re defining what this vague term means … along with our best advice on how to assess these types of job opportunities.
What Does Competitive Pay Actually Mean?
“Competitive” is a term used in the job market to describe compensation that is comparable to other businesses in an industry. “Competitive pay” is a phrase that refers to a salary or pay rate, but its meaning varies based on a number of factors. Whether or not pay is actually “competitive” depends on:
- Geographic location
- Competitor salaries
- Industry-standard rates
An Indeed article states that “for HR experts, competitive pay means offering within 10 percent (above or below) the market average for a job.” However, many employers use the phrase as a catch-all, and its weightless definition has started to raise red flags with some candidates.
The Bureau of Labor Statistics provides data on competitive pay by industry, but that doesn’t help job seekers evaluate which opportunities to apply for. Job listings should include more context surrounding the vague phrase, but it’s also important to keep in mind that real competitive pay includes more than salary. Compensation packages include all benefits (such as flex time or vacation days) and the specifics may not be disclosed upfront for a good reason.
Why Isn’t Competitive Salary Always Disclosed?
Salary transparency is becoming more normalized at state and federal levels. SHRM reported that nearly 12% of job postings across all industries include salary information– which is up from 2019 by 8%. Currently, only some states require employers to disclose pay in their job listings. Those states include:
- Rhode Island
Because not all states require employers to list pay, most choose not to for various reasons– one being that compensation as a whole is negotiable. For instance, what if an employer can’t compete with competitors in terms of salary but can make up for it with other types of compensation?
Why You Should Evaluate Competitive Pay as a Whole
According to a recent CareerBuilder survey, around 54% of workers said that pay was the main factor when applying for a job. That leaves 46% of job seekers who might prioritize a competitive total compensation package over their annual salary.
People search for new jobs for many reasons, and salary is just one of them. When sorting through job listings, look for the word “package” as a keyword in terms of compensation. Compensation packages typically include several of the following:
- Insurance benefits
- Retirement plans
- Flexible work hours
- Equity/stock options
Suffice to say, it’s important not to write off a job just because the salary doesn’t immediately meet your expectations. Businesses are more in tune with employees’ plea for work-life balance now than ever before. Keep an open mind the next time you see “competitive pay” listed on a job post, and do a bit more digging to see if the role could be a good fit for your desired lifestyle. And, if you’re eager to find additional opportunities that align with your career goals, we recommend reading 2 Easy Ways to Access the Hidden Job Market for our best tips on finding unlisted career opportunities!