The new EU rules

Decree on salary transparency, impact and criticality in recruiting processes

Balancing gender equity and flexibility in recruiting will be the real challenge of the decree under discussion

by Lorenzo Cavalieri*

Adobestock

3' min read

Translated by AI
Versione italiana

3' min read

Translated by AI
Versione italiana

The government is about to finalise the legislative decree transposing the EU directive on the topic of wage discrimination. The objective is very important, but it must be avoided that the legislation translates into a mere paperwork effort for companies and thus into an unproductive bureaucratic burden for HR departments.

A double regulatory provision that would significantly change the search and selection processes for candidates is causing much discussion among HR professionals.

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According to the draft under discussion, on the one hand, companies would have to indicate in their job advertisements the expected remuneration for the role to be filled and at the same time, during the selection process, they would not be able to ask the candidate how much they currently earn and/or how much they have earned in the past.

Let us analyse the possible effects of the two measures separately.

Regarding the former, if companies in the process of recruiting personnel and/or their consultants (specialised recruitment companies and employment agencies) are allowed to publish salary ranges, they will probably use very wide 'minimum - maximum ranges'. This choice, which would significantly weaken the measure, would not only respond to an opportunistic logic. Frequently, in fact, companies have not yet fully defined a single 'ideal candidate profile' when drawing up advertisements. Sometimes even the type of contract is not defined ex ante. Often, I first find the right person and then, based on his or her requirements, I also substantially adjust the budget or even the type of contract. A classic example is the 'young - old' options: the role could be filled by the young prospect with a still low salary, or by the super-experienced 'old lion' with very high salary demands. The choice will depend on a combination of a thousand factors that cannot be assessed ex ante when writing the advertisement, but only after getting to know vis a vis the candidates.

Does it therefore make sense to write in an advertisement for an administrative manager that the expected RAL ranges from 40,000 to 80,000 euros? Probably the only effect would be to unnecessarily increase the number of people applying (both those earning 30,000 trusting in a big jump and those earning 90,000 trusting in the negotiation would respond), creating a context where one is forced to evaluate completely different and off-target professionalism. If, on the other hand, companies were to strictly and precisely publish an average value (with all the reservations regarding Trilussa's "chicken average" effect) there would instead be a distancing effect for salary profiles far from the average value, but above all dangerous rigidity in negotiation ("I lost the ideal candidate because I could not stray too far from the published average RAL value").

Another criticism of the draft legislative decree under discussion lies in the provision that the company or recruiting firm cannot ask the candidate at the selection stage how much he or she currently earns and/or how much he or she has earned in the past. In fact, both HR officers and recruiting companies often use the candidate's RAL as a 'litmus test' not only of his market value, but also of his motivations/aspirations/priorities/character traits. In my experience in the world of human resources, for example, I have heard the phrase a thousand times: 'Something doesn't add up. He earns too little for what he says he can do/has done", or the phrase: "He earns too much for the role we offer him. Why would he accept a reduction? He is hiding something from us'. These are just two examples of the fact that knowing a candidate's RAL from the start is very important in terms of evaluation. Not to mention the fact that without knowing this information, there is a risk of unnecessarily pursuing selection paths that are destined to fail, resulting in a huge waste of time for the candidate and the company seeking personnel.

In conclusion, the challenge of the decree will be to reconcile the need to attack the gender pay gap problem with the need not to stiffen the management of recruiting and remuneration policies at a time when all companies experience the dramatic difficulty of identifying and hiring the right person for their projects.

*Managing director of the training and consulting company Sparring

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