Salary Transparency: The ongoing debate

Could displaying a salary on job advertisements attract more applications from the right candidates, or is it just going to cause less meaningful, purely salary-driven applicants?

Does salary transparency mean more applicants?

On the 8th March 2022, the UK government announced a pay transparency scheme, set to last between six to 12 months would be launched. This voluntary scheme encourages organisations to sign up and display salaries in all of their job ads.

Whether this information should be mandatory or not has been an ongoing debate. There is a growing global movement to not only normalise salary transparency, but also to make it the law.

Around the world, increased pressure for employers to be open about salaries  has resulted in legislation such as the New York City pay transparency law, which requires New York City employers to post the minimum and maximum pay range for any job within the city from 15th May 2022 with the aim to reduce discrimination.

The UK is also beginning to follow suit, as the pay transparency pilot scheme was announced during International Women’s Day 2022, with the aim to tackle the gender pay gap and break down barriers for women.

Previous research from LinkedIn has shown that 72% of people want to hear about salary range during their first message with hiring managers or recruiters. Meanwhile, the IT job board, CWJobs discovered that more than half of tech workers (57%) would avoid applying for a role which described pay as ‘competitive’.

Should salary transparency be law?

Pros of salary transparency include the fact it can save time for both businesses recruiting and candidates applying. If businesses are open and transparent with salaries, then it allows them to attract the right candidates, as well as allowing candidates to discover the right roles for them, without any time being wasted for either party. Salary transparency can also help to expose discrimination, helping to allow this issue to be tackled.

Some hiring teams have criticised this by stating that although listing the salary can reduce time during the hiring process, it can also increase the rate of less meaningful applications by applicants who are purely salary driven and don’t have any passion or interest in the company or role.

It has also been argued that full salary transparency doesn’t work as people with the same job role might have different salaries for reasons, including time with the company, time in the industry, work performance, specialities or additional training. Therefore, being transparent with salaries is not necessarily helpful when there might be underlying factors on why the pay is different. But could providing a salary bracket be a way to ‘meet in the middle’, by proving a form of salary transparency while also recognising that other factors might effect salary?

Despite the law that requires qualifying businesses to report their gender pay gap, there are currently no laws in the UK that enforce businesses to disclose the salary details of their employees, or to advertise state the salary in job descriptions when recruiting. The introduction of the pilot scheme suggests there may be a future legislation change.

Advice from T2M

Steve, Managing Director at T2M Resourcing, says: 

“There are obvious benefits to advertising jobs with salary and benefits information, not least to ensure that you attract appropriate candidates within the right salary band which can save the prospective employer and the applicants time by ensuring that all parties are aligned. However, there are also a number of potential issues, particularly in the current market where more flexibility is being given by prospective employers to ensure that they can be competitive when attracting top talent. Many employers are (understandably) cautious about including salaries when using their company name & logo. Salaries paid in one function (e.g. finance) might be higher than other functions within an organisation due to historical (and external market factors), so openly advertising salaries could cause employer relations problems. There can also be issues where a company might need to increase the level of expertise and capability within a department (increasing pay accordingly) so therefore need to do this discreetly to not create issues with existing employees. Fair and equal packages for employees doing similar roles is of course a sensible (and ethical) objective, but can take organisations time to make the necessary adjustments. At T2M we are always happy to guide and advise companies on appropriate market pay ranges for hiring needs.”

Have your say

Could displaying a salary on job advertisements attract more applications from the right candidates, or is it just going to increase the rate of less meaningful applications because they’re simply looking at the salary? Do you think that having salary information displayed on job descriptions should be mandatory?