Why Talking About Compensation Early Matters in the Hiring Process

In talent acquisition, few topics are as important, or as frequently delayed, as compensation. It’s common for companies and candidates to tiptoe around salary discussions, saving them for the later stages of the hiring process. But in my experience building hiring functions from the ground up and scaling recruiting for high-growth, private-equity-backed software companies, I’ve seen that the best outcomes come when compensation is addressed early and openly.

Here’s why this matters so much.

Avoid Wasted Time and Energy

When compensation expectations are misaligned, both sides risk investing significant time into a process that was never going to work out. Candidates go through interviews. Hiring teams schedule panels, calibrate feedback, and debrief. And in the end, the offer is declined or never extended. This is not just inefficient, it’s costly.

Early conversations about salary help ensure alignment. If there’s a mismatch, it can be addressed immediately, whether that means adjusting the compensation range, re-scoping the role, or agreeing to part ways early. In high-growth environments, time is the one resource you never get back. Use it wisely.

Build Trust Through Transparency

Candidates today expect honesty and clarity, especially when it comes to compensation. When a company is upfront about its budget, it signals that it values transparency and respects the candidate’s time. That trust sets the tone for the rest of the process.

The same goes for candidates. Sharing a compensation range early in the process helps recruiters and hiring managers understand what the candidate is looking for, and whether the role can meet those expectations. It’s not about negotiating too early, it’s about ensuring you’re both in the same conversation.

Support More Equitable Hiring Practices

Delaying compensation conversations can unintentionally reinforce pay inequity. When employers wait until the offer stage to ask about salary expectations, they risk anchoring offers based on a candidate’s previous compensation, which may be rooted in historic pay gaps.

By being transparent about pay ranges up front, companies create a more level playing field and help candidates make informed decisions about whether to pursue the role. This is especially important for companies that care about diversity, equity, and inclusion. How you talk about compensation is part of how you show up for all candidates.

Keep Offers from Falling Apart

Few things are more frustrating than getting to the finish line of a great hiring process only to lose the candidate over compensation. By that point, both sides are invested—and disappointment can linger. Starting with a shared understanding of compensation helps ensure that any offer made is one the candidate is likely to accept.

Even if adjustments need to be made later, based on experience, responsibilities, or internal equity, the groundwork has already been laid, and expectations have been managed along the way.

How to Make It Part of the Process

For employers:

• Include a salary range in the job description whenever possible

• Train recruiters to confidently and empathetically discuss compensation in initial conversations

• Be prepared to explain how your compensation philosophy works, including how base salary, bonuses, equity, or benefits factor in

For candidates:

• Be honest about your expectations and what you need to make a move

• Ask about total compensation, not just base salary

• If you’re unsure what to expect, do some market research or ask the recruiter directly what the range is

At its core, hiring is a conversation. The more transparent we can be, about goals, needs, and compensation, the more effective that conversation becomes. Whether you’re hiring your first sales rep or scaling your entire engineering team, talking about salary early is not just smart. It’s essential.