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Salaries

Why We All Need Pay Transparency

Posted by Jill Cotton

Career Trends Expert

Last Updated May 18, 2022

Pay transparency: did you know the salary of your last job before you applied? According to new research by Glassdoor, 2 in 5 (41%) UK workers had no idea what the pay would be for their most recent role. And once in position, income continues to be a mystery, with just 15% of employees saying their company discloses pay ranges internally.

Talking about pay can feel uncomfortable, but job seekers and employees are hungry for compensation information. Breaking the taboo around discussing salaries helps businesses address pay equality in the workplace. It can also increase employee engagement, stronger company culture, deliver a broader pool of talent and boost business performance.

“Every company should be embracing pay transparency,” comments Christian Sutherland-Wong, Glassdoor Chief Executive Officer. “By removing salary secrecy, employers can address potential pay gaps and ensure equal pay for equal work. Salary transparency empowers job seekers and employees to understand better what fair pay looks like for their experience and skills. In addition, employers see the benefits of a more productive and engaged workforce.”

Key Findings

Glassdoor’s research into pay transparency found:

  • Salary is the #1 consideration for UK job hunters  - but 41% did not know the pay of their last job before applying
  • 1 in 4 are worried about finding a job to support the increased cost of living
  • 75% of workers would be more likely to apply for a role that included a salary range
  • Only 15% of employees know the pay ranges available at their company
  • Half of all UK  workers (50%) believe salary secrecy has limited their career options
  • Three-quarters (75%) of employees do not feel comfortable discussing pay with their boss or coworkers
  • 62% think businesses should not ask job candidates for their salary history
  • Pay transparency is the #1 indicator of an employer’s long-term potential

Glassdoor lifts the lid on pay secrecy by sharing salary information left anonymously by millions of employees worldwide. But companies could, and should, be doing more to open the discussion on pay.

What is Salary Transparency?

Salary transparency is being open when talking about employee pay in a company. Strategies for discussion can vary but often include the internal and external publication of pay ranges for roles and creating a workplace culture where employees are encouraged to talk freely about pay.

Why is Pay Transparency Important?

Openness about pay impacts every stage of the employment cycle, from job listings to employee retention.

Glassdoor research found salary is the #1 consideration when job hunting for nearly two-thirds (64%) of UK workers. Transparency empowers candidates to make informed career decisions when applying for roles.

A workplace culture that embraces talking about compensation allows employees to be sure they are paid fairly for their work and best equipped to negotiate their pay

Half of UK workers (50%) think their company should be doing more to close pay gaps. Salary transparency holds employers accountable for their actions, resulting in better on-the-job performance from their team and a more equitable workplace. 

What Are The Benefits of Salary Transparency?

Eliminating pay secrecy is beneficial to job hunters, employees and employers.

For businesses, salary transparency is one of the strongest recruiting tools they can implement. Three-quarters (75%) of job hunters would be more likely to apply for a position that includes a salary range on the job listing. 

Employers with clear pay structures also make it easier for job hunters to know that their skills are worth. Listing a ‘competitive salary’ is too vague. Spending time interviewing for a role that is nowhere near the salary the job hunter wants will leave both the candidate and hiring manager frustrated.

Creating an open culture allows employees to feel valued, fairly compensated and motivated to bring their whole selves to work. Glassdoor research has shown that companies who practise transparency see long-lasting boosts in productivity and increased job satisfaction amongst workers.

 In line with this, two-thirds (67%) of workers think pay transparency is good for business, and a further 7 in 10 (71%) believe openness about pay is good for employee satisfaction. Furthermore, 43% of employees have more trust in leadership in an open organisation, and over a quarter (28%) feel more empowered.

One in 4 (27%) employees suspect that pay inequality exists in their workplace. Pay transparency demonstrates a company’s commitment to equality and inclusion and holds the employer accountable for their actions. 

It also closes the salary negotiation gap between men and women, boosting the number of female applicants and creating a more diverse hiring pool.

Pay Transparency Law in the UK and Ireland

There is no legal requirement in the UK or Ireland for companies to be transparent about pay. Legislation is however in place around pay gap reporting and to ensure workers can access information about pay levels.

Can I Legally Discuss My Salary?

The UK’s Equality Act 2010 made it unlawful for companies to prevent employees from having discussions with one another to establish whether there are differences in pay. Although employers can ask workers to keep income confidential from people outside the workplace.

In Ireland, the Employment Equality Acts 1998-2011 make it illegal to discriminate on matters including pay on the grounds of gender, civil status, family status, sexual orientation, religious belief, age, disability, race and membership of the Traveller community.

Gender Pay Gap Reporting (UK & Ireland)

Since 2017, employers in the UK with more than 250 employees have been required to report salaries and bonuses by gender. This data must be validated by a senior executive of the business and then published on the employer’s website and a government-sponsored website. If they wish, companies can include commentary explaining any pay gap and outline remedial action being taken. On average, women earned 90p for every £1 made by a man in 2021. 

In Ireland, the Gender Pay Gap Information Act 2021 will require employers to report on the gender pay differentials in their organisations across both salary and bonuses. Like the UK, this applies only to companies with more than 250 employees. A date for the legislation to come into force is yet to be announced. The gender pay gap in Ireland is currently 14.3%.

Ethnicity Pay Gap Reporting (UK)

The ethnicity pay gap between white and ethnic minority employees in the UK is reported yearly by the ONS. Although the gap has narrowed to its smallest level since 2012, most minority ethnic workers earn less than their white counterparts. The gap is larger for women than men, and also varies by region - the largest gap is in London (23.8%) and the smallest in Wales (1.4%).

There is no legal requirement for UK businesses to disclose their ethnicity pay data, but around 19% do so voluntarily.

Pay transparency Pilot Scheme (UK)

In March 2022, the UK government launched a pilot scheme to help improve employment opportunities and close pay gaps. Employers participating in the initiative will publish salary details and stop asking about salary history during the recruitment process. 

Glassdoor research found that 3 in 5 (62%) workers in the UK think that candidates should not be asked about their current or past salary in an interview. This figure increases to 73% amongst Asian workers and 75% for Black workers.

Tips for Talking About Pay

In and out of work, discussing your salary can feel uncomfortable. Just 1 in 4 workers feel able to talk to their boss about their compensation, and only a quarter (25%) has shared their salary with a coworker.

So what can companies do to open up this conversation?

  • Include the pay range in job adverts: Job hunters want salary information. Include details on your job listing and tell candidates the salary band at the onset of the interview process. Not being upfront can waste the time of the hiring manager and candidate. 
  • Create an open culture to talk about pay: Publish pay ranges internally and ensure employees are clear on pay structures and timelines in the company - additionally, train managers to talk about compensation.

And what about employees and job hunters?

  • Do your homework. Two in 5 (41%) workers did not know the salary of the last job they applied to. Tools such as Glassdoor’s salary checker can help employees better understand their worth and be ready to negotiate.
  • Know your worth: Understanding the value of your skills will help you achieve the salary you want.
  • Share your salary with a coworker. Only a quarter (25%) of UK employees say they have shared their pay with a colleague. Help break the stigma of discussing salaries by being the first to offer up your pay range.
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