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? 

All sectors Private sector Public sector Voluntary sector
Job adverts have a salary amount 26% 19% 48% 52%
Job adverts have a salary range 21% 17% 35% 21%
Job adverts either have a salary amount or range depending on the role 16% 18% 11% 14%
Job adverts don’t have salary information 33% 42% 5% 11%
Don't know 4% 4% 1% 1%

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? 

All sectors Privatesector Public sector Voluntary sector
Are pay transparent 42% 34% 73% 52%
Plan to be pay transparent within 12 months 7% 8% 3% 9%
Not pay transparent and have no plans to be within 12 months 40% 47% 11% 34%
Don't know 11% 11% 13% 5%

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? 

All sectors Private sector Public sector Voluntary sector
Fosters a sense of fairness among employees 45% 45% 37% 67%
Promotes trust between management and staff 43% 44% 33% 64%
Increases ability to attract and retain staff 37% 40% 27% 44%
Increases employee engagement and satisfaction 37% 41% 24% 41%
Demonstrates a commitment to social responsibility 35% 31% 37% 51%
Reduces pay gaps/disparities 34% 31% 36% 51%
Streamlines recruitment processes 26% 27% 23% 27%
Saves time and resources on pay negotiations 26% 27% 23% 27%
Assists employees in career and development planning 26% 25% 25% 34%
Enhances external business reputation 20% 23% 11% 21%
Other 5% 2% 13% 2%
Don't know 4% 2% 8% 3%
No specific reasons why the organisation is pay transparent 8% 6% 12% 6%
Net:Any 88% 91% 80% 91%

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.

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.

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