What It Really Means When Companies Say ‘Pay Is Competitive’ In Job Listings

By Monica Torres

07/23/2021 05:45am EDT | Updated August 9, 2021

If you look for a job long enough, you’re bound to run into the phrase “pay is competitive.”

This vaguely promising but subjective line appeared in more than 500 job listings on LinkedIn in the U.S. this week ― retail positions in particular ― but it ultimately doesn’t hold companies accountable to committing to any particular salary level.

“Saying ‘pay is competitive’ doesn’t really add much to the job description, but companies will often throw it in there because it sounds good. Who doesn’t want competitive pay?” said Tracy Cote, chief people officer of StockX, an online marketplace. “Most companies think they are paying competitively, whether they are or not.”

“Pay is competitive” is meant to signal great salaries, but it’s also a warning sign.

“Pay is competitive” ― along with its cousin, “salary commensurate with experience” ― is not only a subjective phrase, but it can also be a potential red flag about how the company views compensation and labor.

This belief that you shouldn’t share salary information in a job posting is a part of an “old school” approach many employers follow, said Danny Speros, vice president of people at the software company Zenefits. “They may feel it limits their negotiating power in a compensation discussion, which is a bad reason to do it. I think you should pay people fairly for the work that they do.”

Speros said that he’s used the phrase “pay is competitive” in the job listings in the past, but that his thinking has evolved. “Ten years ago, that was a very common phrase,” he said. “At this point, I don’t use that phrase. I think it’s understood that pay should be competitive.”

At Fractured Atlas, a nonprofit technology company that provides tools and services for artists, salaries are posted on job listings to save “us and candidates time and guesswork,” said Lauren Ruffin, the company’s chief external relations officer. She said Fractured Atlas believes that a candidate should have a sense of salary prior to doing any work in the interview process, like a writing sample or case study response. ”‘Pay is competitive’ feels like a bit of a smokescreen. Is it competitive to the industry? To the region?” Ruffin said. “Every employer has a sense of what they can or will pay for a role, so why not tell candidates upfront unless the goal is to pay people less than they’re worth?“

Although it’s still not common, transparency about pay in job listings is now required by law in one state. A state law went into effect in Colorado this year requiring employers to list salary ranges for job roles open to state residents, even when remote. If companies fail to disclose this in their job openings, they can face fines between $500 and $10,000 per violation. But again, not every company wants to share salary information upfront in a job listing. In Colorado, some employers are purposefully excluding state residents from job openings to get around the requirement.

Here’s a job tip: If you’re a candidate who sees “pay is competitive” on a job listing, you should wait until the end of your first real interview with the hiring manager to bring it up, rather than doing so early on, said Phoebe Gavin, a career coach who specializes in supporting early and mid-career professionals. That way, your curiosity about compensation is just one piece of all the information you’ve given about who you are as a professional, and won’t leave the interviewer with the impression that pay is all you care about.

You can simply ask, “Would you be willing to share the budget for this role? I’d like to make sure we’re on the same page with compensation expectations,” Gavin said.

When the job market is hot, “pay is competitive” doesn’t cut it.

Speros said companies typically calculate whether their pay is actually competitive in a particular industry through compensation services like Radford’s data and analytics platform and PayScale.

With hiring on a major upswing right now, the competition for talent is heating up. Speros said he expects Zenefits to offer salary ranges in job listings for all of its open roles in the coming year. “There is so much competition for talent out there right now. We’re at a point — and companies that don’t do this are at a point ― where it’s just spinning wheels.”

“The last year has helped people re-prioritize what they expect from employers and how they hold workplaces accountable,” Ruffin said. “Workers want transparency, decency, and a bit of a sense that while the workplace isn’t about building an ‘office family,’ their employers have just some of their best interests in mind. The job description is often that first signal, so candidates hold it to a high standard.”

By Milo Orr
Milo Orr