Pay Transparency - The War Continues to Rage

Benefits of Pay Transparency - More Applicants!

Interestingly, job adverts including vital salary information have reached a seven-year low as employers intentionally ignore transparency ethics. Adzuna, a UK job search engine company, analysed 80 million UK job roles advertised between 2016 and April 2023 to highlight regions, companies and sectors that are most or least transparent about pay. Their analysis shows that there are six times more applicants for jobs advertised with salaries. It appears that the most secretive sectors are scientific, quality assurance, creative and design and retail. Energy, oil and gas sectors have seen the most significant fall in transparency, followed by trade and construction industries and administration. Job vacancies have been reduced by almost 20 per cent across the UK; it's believed that the tighter labour market has encouraged employers to rein in salary disclosures by using this shift in power. London is cited as having the worst ethnicity pay gap and gender pay gap suggesting a lack of transparency and equality. 

Andrew Hunter, the co-founder of Adzuna, said, "Compared to last year, the power in the jobs market has shifted back to companies, and we are seeing fewer job adverts disclosing the salary as employers find it easier to fill positions. As well as making the job hunting process less stressful and less time consuming for jobseekers, salary transparency is a crucial step towards eliminating pay gaps in the jobs market”.

Is Pay Disclosure Effective?

Jennifer Gant, a lecturer in law at the University of Derby in the UK, explained, “The underlying problem with requiring strict or narrow salary ranges is that it limits flexibility in terms of negotiation”. 

Pay transparency can help address the issues surrounding women and minority workers' pay. On the other hand, America is seeing more and more cities and states introducing laws to force companies to be more transparent, including New York and California, in late 2022. These laws are designed to eliminate pay, gender and racial gaps by preventing unconscious bias and intentional discrimination. However, with a lack of current data illustrating the new laws' impact, there is no evidence that these new laws will remedy pay gaps and inequity. Many of the state laws have plenty of loopholes, particularly when it comes to 'good faith' that companies determine the salary ranges based on their own data or estimates and, therefore, can be easily exploited. Since the New York pay range laws came into effect, workers have observed pay disparities of more than US$100,000 on posted listings. Research from ResumeLab showed that four out of five individuals would only apply for jobs if they had pay information. 

Tom Spiggle, an employment lawyer based in Virginia, explained, “Employers posting wide salary ranges does little to help prospective employees know how to negotiate an appropriate salary,” and is hopeful that “courts and regulatory bodies will eventually weigh in as contested cases move through the system”. He continued, “It’s a great first step. As someone who represents employees, pay disparity cases can be difficult when employers claim that pay data is confidential”. 

Experts agree that whilst some elements of pay transparency are effective, they are only part of a broader solution to resolving inequity in the workplace. It's clear that companies must address structural inequities by conducting transparent pay audits and offering better policies such as parental leave. This is particularly important for women as they are paid substantially less than their male counterparts. While it might not be a perfect solution, it's a great start. 



Australia also reports that many applicants applying for roles would only apply for vacancies with salary information on Seek, Australia's largest job board. Experts say that the mood within the workforce over the last two years, combined with the expectations of younger workers, have put pressure on lawmakers to act.

It is much more than just disclosing pay

Pay transparency legislation will create accountability and remedy pay gaps in individual organisations. Currently, the picture is clear, women who work full-time in the US earn 17 per cent less than men, and in Australia, they earn 13.3 per cent less. Black, Hispanic and Indigenous women earn even less than white women. Research shows that women, especially those of colour or minorities, tend to ask for less money than white men. Other substantial pay gaps include workers with a disability or LGBTQ+. It's clear that many driving factors drive these gaps; for example, women's careers are more likely to be disrupted by childcare responsibilities and that they work in lower-paid sectors. Firms could easily counteract this if pay ranges are published in job advertisements to provide a clear indication of these scales across a firm's personnel and would provide evidence of an imbalance within the workforce. 

California Governor Gavin Newsom signed a new law last year that required any employer with over 15 employees to publish a pay scale alongside any job advertisement. The law also requires all companies that employ more than 100 people to submit an annual pay data report to the Californian Civil Rights Department to provide an overview of employees by race, ethnicity and sex and the median and mean hourly pay rate for each group. Other states and cities have already introduced or are passing legislation to highlight their pay practices. 

It is clear the argument for or against pay transparency will continue to rage, there is a push and pull between employees, corporations, law makers and social justice advocates.  Ultimately it seems enforcing pay transparency will win in the end, therefore it’s advisable for all organisations to get on the front foot now and start implementing processes to transition to full pay transparency sooner than later.