Pay transparency – it’s about more than putting salaries on job ads
Pay transparency is much more than a compliance requirement. If done well, it can be a great advantage. Learn why and what may be you back.
Published: 18 February 2025 | Jane Vivier
It’s the hot topic in the HR world. Now set to be a requirement for companies operating under EU rules, “pay transparency” appears to be on every conference agenda and webinar calendar, sold as a solution to the gender pay gap, a way to bring greater fairness to organisations and a means to increase employee engagement. But there’s a lot more to it than that, says Jane Vivier.
In this article, I thought about showcasing organisations that do pay transparency well – give a “shout-out”, if you like, to companies that encapsulate all that is great about having an open and honest relationship with their employees. However, many hours of research didn’t turn up any examples of greatness. That’s more than worrying.
I believe that many organisations think pay transparency amounts to no more than publishing their mandated gender pay report and placing a salary range on its job adverts. But it’s so much more than that.
Transparency is so often touted as a solution for gender pay disparity. While I would never argue that closing the gender pay gap is a bad thing, could we also be seeking ways to bring about greater fairness, respect and openness for every employee, potential employee and customer?
Salaries on adverts are a great starting point – but it is just as important to ask what then happens after the contract is signed.
“Transparency is so often touted as a solution for gender pay disparity. While I would never argue that closing the gender pay gap is a bad thing, could we also be seeking ways to bring about greater fairness, respect and openness for every employee, potential employee and customer?”
It’s about more than the gender pay gap
Transparency should not simply improve the gender pay gap. The Office for National Statistics (ONS) analysis of the 2021 census data found that “[a]fter holding personal and work characteristics constant, to provide an adjusted pay gap based on like for like comparison, we find that UK-born White employees earn more on average than most ethnic minority employees”, with BAME employees earning around 6% less per hour than White employees. The study also found that those born outside the UK were likely to earn less.
The situation is similar for the disability gap, which is wider than it was a decade ago, currently sitting at close to 14%.
The majority of articles about pay transparency focus on pay gaps - specifically gender pay gaps – and explain how transparency will help close these. Yet these are based largely on the EU legislation on pay transparency which, post-Brexit, UK organisations don’t have to adhere to.
A changing world
The world, and the world of work, have changed significantly in just the past few years. Gone are the days when we lived to work, when employers held all the cards and when workers’ rights and mobility were restricted. People working today expect fairness and equity, they have access to so much information in the digital age that secrecy on the part of their employer seems unnatural and Machiavellian – the inference being that, if you aren’t open and transparent, it’s because there is something to hide.
Far too many workplaces retain their old-world hang-ups – policies are largely written to tell people how to act in particular situations, setting arbitrary time limits and standards that have remained unchanged for years. Information on pay, performance, career development and reward is often hidden, or made so complex that it doesn’t resonate with employees and is impossible to negotiate for anyone outside HR. The gulf between “management” and “workers” is still there when it comes to reward.
For me, pay transparency is about openness, trust – a mature and considered relationship between employer and employee, a mutual relationship in which workers provide skills and effort and receive reward for this. It’s an important part of the toolkit to attract and retain talent as well as enhancing an organisation’s reputation. Having clear and open compensation and reward strategies also allows line managers to manage their teams more effectively, to make strong commercial decisions and to ensure that they reward the right people in the right way. This has to be beneficial for all organisations.
What is holding employers back?
It’s clear that pay transparency can be a great advantage – not just to women, but to society more broadly. Why then are a lot of employers being less than open and engaging in their compensation plans?
When we have Glassdoor, Indeed, PayScale and a multitude of social media platforms, the answer cannot be that the information is so commercially sensitive that it cannot be published. The amount of pay data available today is substantial, as is the mass of information on benefits, culture and leadership.
“It’s clear that pay transparency can be a great advantage – not just to women, but to society more broadly.”
I suspect – and this is borne out by my experience – that most employers are deliberately vague about pay matters as:
- They want to pay as little as they can.
- Their internal frameworks and processes would not support the pay decisions that need to be made to attract new talent.
Sadly, there is little to be done about the first reason. But hopefully the information available to individuals will help them define their value when it comes to salary negotiations.
As for the second, that’s definitely an area where I can offer guidance. In the next article I will outline the elements of your employee deal that will help you negotiate a path through the compensation minefield, enabling you to have a framework that supports fairness, transparency and equity, and that allows you to move away from the world of “competitive salary” statements on job adverts.
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About the author
Jane Vivier
Freelance Reward Specialist
Jane is a multi-sector reward specialist who now works as a freelance consultant on reward projects ranging from developing pay and grading frameworks and benefits reviews to the coaching of those starting or developing their reward careers.
Never one to shy away from difficult conversations or unpopular opinions, she relishes the opportunity to make reward more understandable for both employees and her HR colleagues.