Mon, Aug 8, 2022

Most job adverts fail to disclose pay as it places applicants at a disadvantage during negotiations. Recruiters claim applicants can ask pay details at any time, but when applicants are required to ASK for this information, it labels them as problematic.

When job adverts don’t disclose pay information, opportunity is created for unfair wage negotiations.  

Asymmetric Information and Recruitment Policy

Section 23.1 of the Constitution of  South Africa says EVERYONE is entitled to fair labor practice.

Withholding Information to Protect Positions of Power

Asymmetric information occurs when one person knows more than the other and uses this for their benefit.

In recruitment, employers and recruiters withhold information about pay in order to maintain a dominant position.

Examples of asymmetric information:

  1. Landlords who know more about their properties (and problems) than potential tenants 
  2. Loan seekers: A borrower knows more about their ability to repay a loan than the lender. If the lender doesn’t do proper background checks they may be lending to someone who can’t return the money.
  3. Doctors have better knowledge about which drugs and treatments to recommend to their patients
  4. A used-car seller knows more about vehicle quality than a buyer
  5. Insider information of traders in financial markets

When a recruiter knows a company is willing to pay 10k but you’ve said you’ll accept 8k, they have an asymmetric information advantage over you.

How much do you think they will offer?

Recruitment Costs to Applicants

  • applicants invest money in their appearance
  • transport
  • document presentation (CV’s etc)
  • many youth can’t afford to pursue multiple job offers simultaneously as they have limited resources such as transport and internet

Applicants denied information about job prospects waste limited resources interviewing for opportunities they can’t afford to take.

Do you think employers withhold pay information to convince applicants to accept low wage offers?

Job adverts are used as signals to job seekers and to attract their attention.  Is it fair that applicants are denied the right to rationally evaluate which opportunities to pursue and prioritize?

When pay information is withheld – does it have a massive or tiny impact on fair labor practice?

If your income is based on what you agreed to and were willing to work for – do we have growing income inequality because people are agreeing to bad wage offers?

Post comments below!


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