Talking Shop with Thomas André Sola: Salary Transparency and the Impact on the Staffing Industry
Exploring the New European Wage Transparency Directive and the First Salary Survey in the APSCo Sector
Frankfurt
By Sabine Reifenberger, Frankfurt
"Companies apprehensive about public pay disclosure"
A European directive is about to shake up salary practices across industries. Predicting a bit of friction, says Thomas André Sola, chairman of the APSCo industry association. The association's recent salary survey revealed mixed reactions among members.
In many companies, remuneration details remain shrouded behind closed doors. But that's all set to change. The Pay Transparency Act, enacted a few years ago to ensure equal pay for women and men in similar roles, only applies to companies with 200 or more employees. Now, the incoming European wage transparency directive is set to rewrite the rules for businesses with 100 employees or more, requiring employers to disclose potential starting salary after job applications. Employees will also have the right to request information on average wages within their company.
"Compliance with the wage transparency directive necessitates active steps from employers," explains Thomas André Sola, chairman of the APSCo industry association. The group recently conducted its first 'salary check', aiming to tackle an internal issue: "As experts in placing candidates in open positions, we know exactly what they can expect salary-wise. However, we had less data regarding remuneration within our own sector."
Salary discrepancies in the staffing industry
Some 850 specialist and managerial staff members from the industry participated in the survey between July and September. One striking finding: Salaries vary significantly based on the industry focus. Depending on whether they work on the candidate or customer side, professionals might earn an average total salary of €56,400 or €79,800, respectively. Sola attributes the wide difference to varying job requirements: "Those working on the customer side are more sales-focused, which often involves cold calling and acquiring new clients – less popular tasks."
On the other hand, approaching potential candidates with job vacancies is relatively straightforward for recruiters working on the candidate side. The highest earning potential is for personnel consultants who work across both aspects, known as 360° roles. These roles typically earn an average total salary of €84,900.
Employers often hesitant about disclosing salaries
By conducting its first salary survey, APSCo aimed to set an example and provide better advice to customers about salary transparency. "Unlike internal HR departments, we as external recruiters observe various industries, employment structures, and contract types. As a result, we witness employers who are reluctant to disclose salaries more frequently," explains Sola. With the wage transparency directive, he predicts a shift in mindset, particularly among smaller companies.
The specifics of the EU directive's implementation into German law are unclear, with ongoing election-related delays. However, the goal of increased comparability isn't met with universal applause: "Some companies fear wage transparency, especially those with substantial salary disparities who may face difficulties," confesses Sola.
The response to APSCo's salary check has been mixed among association members, according to Sola. "Some have embraced the initiative wholeheartedly, while others are less enthused due to internal concerns," he reports. The survey aims to encourage open dialogue about such issues. "An imbalance doesn't disappear just by ignoring it."
Breaking the Pay Taboo
In some countries, discussions surrounding salaries are less stigmatized, such as the US and the UK. Despite legal complexities, Sola believes it's crucial for companies to handle salary issues fairly and transparently in their best interest. Currently, job ads often provide extensive information about the tasks required to earn a salary, but the salary itself often remains undisclosed. "Given the skills shortage, a transparent approach to remuneration is undoubtedly the more successful strategy."
About Thomas André Sola
Thomas André Sola embarked on his recruiting career at Hays in late 2006. From 2011, he was part of Earth Stream, a staffing company in the energy sector, which he co-founded. In 2020, the company merged with two other staffing agencies to form Tech Stream Group. Since 2021, Sola has been advising investments in staffing companies as a transaction advisor. He currently chairs the APSCo industry association in Germany, which unites around 1,300 staffing companies globally according to its figures.
- Thomas André Sola, the chairman of APSCo, explains that the European wage transparency directive will soon mandate employers with 100 or more employees to disclose potential starting salaries after job applications and allow employees to request information on average wages within their company.
- The APSCo industry association conducted its first 'salary check' to address the lack of data about remuneration within their sector, with the survey revealing significant salary discrepancies based on the industry focus – salaries ranging from €56,400 to €84,900 depending on the specific role in the staffing industry.
- Some companies are hesitant about disclosing salaries, according to Thomas André Sola, but he predicts a shift in mindset as a result of the wage transparency directive, especially among smaller companies.
- Members of the APSCo association responded to the salary survey with mixed reactions – while some embraced the transparency initiative, others expressed internal concerns and reservations about the potential impact of the wage transparency directive on their organizations.
