Blog, Employers

Are Your Salary Ranges Hurting Your Ability to Hire?

Pay transparency has changed how Canadian employers talk about compensation. For employers covered under specific legislation, they can no longer wait to provide salary information until the final offer stage.

We know that candidates today expect to see pay ranges included in job ads. In Mercer’s 2024 Global Pay Transparency Survey, 69% of employers agreed that candidates expect pay transparency, yet Mercer’s 2025 survey found that employer preparedness was still only at about 50%.

When compensation is visible, job seekers can quickly tell whether it aligns with what they’re seeking. If the number doesn’t match their expectations or the market, they can move on.

When a company experiences recruiting challenges, there are many possible contributing factors, including talent shortages or the economy. But persistent recruiting problems could also signal that your salary ranges no longer match your hiring reality.

Your Salary Band Isn’t Your Hiring Range

A solid compensation structure gives an organization budget control, internal equity, and clarity about how people are paid. Structures typically set grades with a minimum, midpoint, and maximum. The midpoint generally represents the target pay for a fully qualified, proficient employee, and where someone sits in the range depends on experience, skills, performance, and time in role.

HR typically works with talent acquisition to identify the portion of the range that aligns with hiring, as Mercer describes in Managing Your Salary Structure and Pay Ranges with Confidence. That portion is your hiring range, and it’s not the same as the whole band.

For example, say your internal grade spans $80,000 to $110,000. That doesn’t mean every candidate for every opening should be considered in this range. The hiring range should reflect the skills required, current market conditions, internal equity, and the approved budget for that specific position.

Issues can arise when your practical hiring range drifts from the market:

You bump against the band ceiling: You could struggle to attract qualified applicants without offering the top of your band.
Applicant volume drops: Job seekers could skip postings where the pay doesn’t meet their expectations.
Hiring cycles drag on: Recruiters spend hours interviewing candidates, then potentially lose them over base salary at the offer stage.
Internal friction grows: Hiring managers could feel boxed in by rigid bands while HR tries to keep equity across departments.

Pay is rarely the only reason offers are declined, but if the difficulty is persistent, it’s the first place to look.

Compliance is only part of the picture. Mercer’s 2024 survey found 77% of companies cited compliance as a key driver of their pay transparency strategy, but more than half also pointed to employee satisfaction and alignment with company values. A range you can defend publicly forces the design questions this article raises.

How Outdated Salary Ranges Hurt Recruiting

From our work placing professionals across North America, here are four common pay range issues that can potentially affect a company’s ability to hire:

1. Posting ranges that are too broad

Advertising $60,000 to $120,000 may seem like a way to stay flexible, but it’s too wide of a range. If you realistically expect to hire at $90,000 to $100,000, posting a focused range will help you attract the right candidates. Some provinces and territories (such as Ontario) limit how wide a posted range can be, so check the rules wherever you recruit.

2. Relying on internal history instead of market data

What you paid someone five years ago says little about what that skill set commands today. Bands that aren’t regularly benchmarked can lead to ranges that no longer reflect the market, which may result in fewer qualified applicants, more withdrawals, or more rejected offers.

3. Letting the structure stand still

Pay ranges need regular adjustment. In Mercer’s Compensation Planning Survey, 74% of companies said they adjust their pay structures annually, and among those planning an adjustment, the average was 2.9%, typically about a percentage point below the merit increase budget.

How often and how much you adjust your pay scales will vary by employee segment and industry. If you don’t adjust, employees receiving annual increases drift toward the top of their ranges. A maximum is intentional, but a structure that doesn’t account for inflation and tight labour supply eventually leaves employees at the ceiling, which could hurt morale.

4. Triggering pay compression

Market pressure can push new hires toward the top of a range, leaving experienced employees earning only slightly more than newcomers doing similar work. Capping starting salaries below market may protect short-term consistency, but it can make the role harder to fill. Before making an offer, consider how it affects existing employees.

Perks matter, but they rarely make up for base pay that is materially below a candidate’s market expectations.

Four Steps to Build Accurate, Competitive Salary Ranges

Salary structures aren’t static. Plan to review yours at least annually, and more often for fast-moving specialties.

1. Track candidate drop-off and rejection data

Treat recruitment metrics as real-time market feedback.

Screening drop-offs: If qualified applicants withdraw after learning the pay, your posted range may be out of step with candidate expectations or market averages.
Declined offers: Ask what competing offers candidates accepted. This will give you a sense of what other employers are offering and where you fall on the spectrum.
Salary expectations: Record what strong candidates expect. Working with an experienced recruitment partner can provide an additional advantage here: Recruiters speak with candidates across the market every day and have a clear view of current salary expectations, competing offers, and what it takes to attract qualified talent. This insight can help you validate your salary ranges, identify gaps, and build a stronger business case for compensation adjustments.

2. Audit how employees are distributed in their ranges

Track how your employees fall within each pay range. For example, newer employees lower, more experienced employees higher. Performance also affects positioning. Years of experience won’t map neatly to range position, but large deviations deserve a look. Mercer’s guide to managing salary structures lays out these checks in more detail.

Out-of-range employees: Employees below the minimum may mean the job is assigned to the wrong range. Employees above the maximum may mean the same, or simply a long-tenured person who has reached the full value of the job. Both can be legitimate, but they should be monitored and actively managed with HR.
Location and department patterns: If an entire department sits in the lowest quartile, with compa-ratios below 80%, either the people are underpaid, or the jobs are assigned to the wrong ranges.
Promotion friction: If managers and HR aren’t in alignment on off-cycle increases or promotions, your structure may not match how you actually reward people for taking on new responsibilities.
Pay equity: Check how people of different genders, ethnicities, and other protected groups are positioned within ranges. This is a bigger topic in its own right.

3. Use a few simple metrics, and report on them regularly

You don’t need specialized software. Once you set up the formulas, even a spreadsheet makes this routine.

Compa-ratio: (Salary ÷ Range midpoint) × 100. Shows where an employee sits relative to the midpoint, where 100 means exactly at the midpoint.
Range penetration: (Salary − Range minimum) ÷ (Range maximum − Range minimum). Shows how far through the range an employee has progressed.
Salary compression ratio: Average salary of higher-level employees ÷ Average salary of lower-level employees. Shows whether the gap between levels or experience has narrowed too far.
Pay equity ratio: Average salary of Group A ÷ Average salary of Group B. Flags potential pay disparities between groups.

4. Benchmark carefully, then narrow your advertised range

Free online salary tools give a general sense of the market, but rarely the role-specific, regional, or industry detail needed to build a reliable structure.

Benchmark duties, not titles. A Director of Operations at a 25-person company can have a very different scope from one at a large enterprise.
Account for geography. Pay and talent supply differ between Vancouver, Calgary, Edmonton, Winnipeg, Toronto, and other markets.
Watch high-demand specializations. Niche skills in finance, technology, and engineering can outrun annual adjustments.
Triangulate. Combine a published compensation survey, current competitor postings in your region, and recruiter or candidate intelligence, then check them against your internal data.

Then advertise the range you actually intend to use. For example, if the internal grade is $80,000 to $110,000 but the approved budget for an opening is $90,000 to $95,000, publish the budget, not the whole grade. You settle your budget before posting the job, candidates can screen themselves, and recruiters can focus on aligned talent.

There is a trade-off. A narrow range can anchor negotiations and leave less room for an exceptional candidate. Decide your flexibility in advance, and check your province’s rules on how ranges must be stated.

Align Your Pay Structure With Your Recruitment Strategy

Recruiting challenges are rarely solved by telling recruiters to source more profiles. If your compensation foundation is misaligned, even the best hiring process can stall. Your pay structure should support your talent strategy, not conflict with it.

A quick pay range checklist:

Do we know our approved budget before each posting goes live?
Have we benchmarked this role against current Canadian market data in the past 12 months?
Have we adjusted our compensation structure in the past year?
Do we track screening drop-offs and declined offers, and the reasons?
Do we know who is out of range, and who is clustered at the top?
Have we checked for compression before extending offers?
Is our posted range compliant in every province where we advertise?

If you answered “no” to two or more, your salary range deserves a closer look.

Need help benchmarking a role or testing your range against the market?

Contact us to help you with your recruitment strategy. We can also connect you to other partners within the Humanis Advisory Group who can provide comprehensive compensation advising and salary benchmarking services.