Pay transparency is a hot topic. Many states in the US for example, now require employers to publish salary information in their job adverts. In the EU, member states are required to implement the Pay Transparency Directive, and Ireland recently introduced gender pay gap reporting. In the UK, the government is conducting a pilot where employers publish salary information in job adverts. There’s even a new book on pay transparency.
To explore the extent of pay transparency that already exists, and why employers have or haven’t adopted it, we asked some questions in the CIPD’s Labour Market Outlook – Autumn 2023.
Letting potential employees know what’s on offer
Our survey found 63% of workplaces already advertise their job roles with salary information. The most common approach was to publish an amount, followed by either a range or an amount depending upon the role being advertised.
However, Table 1 reveals that public (94%) and voluntary (87%) sector employers were more likely to say their job adverts contained pay information than those in the private sector (53%).
Within the private sector itself, there was further variation. Sectors least likely to publish salary details in job adverts were:
- construction (40%)
- business services (43%)
- finance (44%).
Table 1: Do job adverts contain salary information?
Source: CIPD Labour Market Outlook – Autumn 2023
N=2,004
Letting existing employees know what’s on offer
When it came to being pay transparent with existing staff, there was almost an even split among those who were (42%) and weren’t (40%). This included giving information about:
- pay levels
- pay rises
- bonuses
- pay structures
- pay progression.
The even split isn’t borne out by sector as Table 2 shows. Private sector firms are again less likely to be pay transparent.
Table 2: Are employers transparent about their pay arrangements?
Source: CIPD Labour Market Outlook – Autumn 2023
N=2,004
Within the private sector, industries most likely to be less transparent about their current pay arrangements are:
- business services (26%)
- transport and storage (28%)
- finance (31%).
Why employers are transparent or not about pay
Table 3 shows why organisations are either transparent with existing staff about pay or have plans to be so. The most popular explanations were that it helps foster a sense of fairness among employees, and that it promotes trust between management and staff. Though in the public sector, respondents were more likely to say that they either did not know or there were no specific reasons. This could indicate the transparency policy had been in place for so long that the original drivers have been long forgotten.
Table 3: Why are employers pay transparent?
Source: CIPD Labour Market Outlook – Autumn 2023
N=988
The most common reasons for why employers weren’t transparent about pay were fears that being so could:
- demotivate employees whose pay is below the average (29%)
- create unrealistic pay expectations (29%)
- cause a staff backlash (28%).
There are increasing expectations from employees, investors, customers and politicians for greater openness about pay. Given this, we expect more firms will drop their anxieties about revealing all and review the steps they must take to become more transparent – for example, addressing legacy issues or defining what’s meant by pay. Otherwise, if they’re not transparent, people might assume they reward like Scrooge.
Topics A-Z
Browse our A–Z catalogue of information, guidance and resources covering all aspects of people practice.
Bullying
and harassment
Discover our practice guidance and recommendations to tackle bullying and harassment in the workplace.
About the author
Charles Cotton, Senior Performance and Reward Adviser
Charles has recently led research into the business case for pensions, how front line managers make and communicate reward decisions, and managing reward risks, as well as the creation of a good practice guide on the annual pay review process. He is also responsible for the CIPD’s public policy work in the area of reward and is a Chartered Fellow of the CIPD.
Explore the CIPD’s point of view on low pay and financial wellbeing, including recommendations for employers and actions for the UK Government
Learn about the UK law surrounding workplace pensions and how to choose new schemes or review existing pension arrangements
Peter Cheese, the CIPD's chief executive, looks at the challenges and opportunities faced by today’s business leaders and the strategic priorities needed to drive future success
We outline the key pieces of legislation set to come into force in the UK and explain their implications for employers and employees
We examine people’s desired hours and how this compares to the hours they actually work
Employers’ reactions to pension proposal highlight concerns over cost, while the CIPD calls for focus on raising pension awareness among staff, the need for higher contributions and better understanding of value for money