Employers Should Be More Transparent About Salary, Job Seekers Say

Get the Insider App

A personalized feed, summary mode, and ad-free experience.

Download the app

Close icon Two crossed lines that form an ‘X’. It indicates a way to close an interaction, or dismiss a notification.

  • Employers are being urged to stop using the word “competitive” on job ads, in regards to the salary.
  • Reed surveyed 2,000 workers — 78% would be less likely to apply for a role that didn’t list a salary. 
  • A culture of salary secrecy has been blamed as a factor behind gender and ethnicity pay gaps. 

Employers should avoid using the word “competitive” in job descriptions and be more transparent about salaries when advertising jobs if they want workers to apply, a survey shows. 

Reed, one of the UK’s largest recruitment companies, polled 2,008 working adults and 252 hiring managers for their views on salary transparency. The results showed that 78% of workers said they were less likely to apply for a role that didn’t include a salary. One fifth (22%) said they only applied for roles listing pay. 

A culture of salary secrecy has been blamed as a factor behind entrenched gender and ethnicity pay gaps on both sides of the Atlantic.

Campaigners say that giving job seekers access to more information can help people negotiate better pay. It could also help companies attract a wider pool of applications amid an ongoing labor shortage. 

Just under half of hiring managers (46%) surveyed by Reed said their organization had a salary transparency policy. And 62% didn’t believe salary secrecy affected applications negatively. 

Job seekers are generally in favor of greater transparency; 48% said that it negatively affects their perception of the hiring companies. Around a quarter (26%) said they were likely to be put off applying or firms who used the word “competitive” in place of a figure. 

“You wouldn’t shop in a supermarket that doesn’t list its prices, so why should we expect people to sift through job ads that don’t advertise salary?,” Simon Wingate, managing director of Reed.co.uk, said.

“It’s clear that job seekers want to apply for roles at businesses that are open about what they pay,” he added. 

An analysis of job adverts on its site shows those displaying salary amounts receive 27% more applications than those that don’t.

A lack of pay transparency can perpetuate gender pay gaps

The data comes in the same week that the UK government announced plans to tackle a lack of pay transparency in order to address the country’s gender pay gap — which saw men paid on average 15.4% more than women across full- and part-time roles.  

 The proposals, announced on International Women’s Day, include a pilot requiring participating companies to be more transparent about salaries with job adverts. 

They’ll also stop asking for information about a candidate’s previous salary, which studies show can keep people on lower wages. This can be particularly problematic for women and people of color who are historically underpaid compared with their male and white peers. 

According to the Fawcett Society, which campaigns for gender equality, 61% of women said it negatively impacted their confidence to negotiate their pay when they were asked about their previous earnings — 53% of men agreed. 

Giving people more information about their own and their colleague’s pay can help them negotiate better pay. 

“When pay transparency is there, when you know your wage, then individuals react and they ask for either higher wages or they change companies to get those higher wages” Almudena Sevilla, professor of economics and public policy at University College London and chair of the Royal Economic Society Women’s Committee, previously told Insider about her research from UK universities. 

In the US, Colorado, Nevada, Connecticut, California, Washington, and Maryland have all introduced some State pay transparency rules. Rhode Island will introduce legislation in January 2023.

From May 2022, businesses in New York City must include a minimum and maximum salary range on any job, promotion, or transfer opportunity. 

Source News