Show us the money! Is the UK falling behind on pay transparency?

With the Times reporting that over half of UK job adverts do not display salary or pay brackets, could the push for pay transparency be over?

Research conducted by Adzuna showed only 51% of job adverts displayed salary information in April 2023, down from 61% the previous year, suggesting that the UK could be falling behind.

Clearly advertising the salary or salary range for a role can be attractive to jobseekers and may result in more applications, as it allows them to make an informed decision about whether the vacancy is competitive with their current job.

It can also reflect well on the company, as it demonstrates a confidence in the salary on offer and their business as a whole.

Alternatively, not advertising the salary in the job description suggests to potential candidates that the salary might not be competitive within the industry – with most job seekers believing that businesses would be happy to advertise a good salary as a benefit.

However, displaying a salary on a job advert may not be as straightforward as it seems.

Businesses need to be aware of a number of pitfalls, including the possibility that current employees may see a similar role to theirs being advertised at a higher rate of pay, which may cause resentment among the workforce.

It might also risk confusion, as employees may not be aware of the background requirements such as skills, years of experience, and level of responsibility; all factors that influence pay.

Without this background knowledge, employees may jump to conclusions about their own salary, potentially creating a hostile workplace environment.

It is also important to note when stating a salary range, candidates will generally expect to be paid near the top end of the bracket regardless of their qualifications or experience.

They may feel duped if they are then offered the bottom end of the range, which may sour the relationship between the business and the new employee from the outset, or even lead the employee to reject the job offer altogether.

The most important step employers need to take when considering a pay transparency policy in their workplace is to conduct an audit of current pay levels to ensure there aren’t any inconsistencies or the potential for unfairness.

Marked differences in pay packets could lead to employees making claims under the Equality Act 2010, which prohibits pay secrecy clauses that actively try to prevent employees from discussing pay information when they are seeking to uncover differences that may be linked to a protected characteristic, which could in turn lead to a claim of discrimination.

It is also important that employers are not drawn into negotiations with individual employees that may cause them to fall foul of the Equality Act.

For example, studies show that men are more likely to negotiate a higher salary than women, so agreeing to negotiations without considering current salaries within the wider team is risky and may well create ticking timebomb.

Although it is unlikely the UK will be making pay transparency a legal requirement in the immediate future, it is not completely off the table.

Employers should also remember that salaries are just a part of the package, both in terms of remuneration and the wider employee benefits. Employees may well take a lower salary if the benefits are good, and the employer offers flexible or agile working.

However, for most job seekers, transparency around pay is highly attractive, and if done correctly, can lead to high levels of applications from skilled workers.

Matt McDonald – HR Magazine