How salary transparency is linked to pay equity
At Other Box, we always talk about how transparency is key—especially when talking about money. It's not just about sharing numbers; it's about building trust and empowering the Other Box community to make informed decisions about their careers. So, since we launched Other Box Jobs in 2018 (formerly known as TOBjobs), we only featured job listings that included salary transparency, ensuring everyone was clear and could confidently take the next step in their career journey.
This week, we're exploring salary transparency. Then next we'll explore the benefits and insights of embracing this important practice.
"Salary transparency" is a phrase we hear a lot these days. But what does it mean, and why is it important?
In short, salary transparency is the practice of openly publishing salary information. From displaying wage ranges in job adverts to having a clear salary structure for employees, salary transparency drives trust promotes equity, and shapes business culture. Plus, it helps with employee engagement, retention, and talent attraction.
Salary transparency aims to develop a transparent and equitable compensation structure for all employees.
The benefits of salary transparency:
Enabling equity and fairness
Salary transparency helps to combat pay discrimination and the pay gap. Companies that openly share wage ranges and compensation criteria can help ensure that all employees are compensated fairly, regardless of gender, colour, or other potentially discriminatory considerations.Building trust and openness
Trust between employees and employers is paramount. Salary transparency can help nurture this trust. When employees clearly understand how their pay is calculated and see that it is in line with or competitive against their peers, they trust their leadership and company more. In turn, employee morale and loyalty improve, too.Attracting the right talent
Attracting top talent is an ongoing challenge in a competitive job market. Transparent wage ranges listed in job adverts can attract candidates. It also saves time during the interview process, as those with compensation expectations that don't align can step away from the process. Lauren Spearman documented her job search journey in 2023 and continues to use her platform to call out bad job listings and spotlight the good ones. A lack of salary transparency always puts listings in her bad book.
How salary transparency is linked to pay equity
Salary transparency and pay equity are two sides of the same coin. Pay equity ensures that employees are fairly compensated based on their labour and capabilities. Salary transparency helps here, as it allows employees to clarify how much they earn compared to other employees.
Salary transparency is vital to attracting, retaining, and engaging employees if you want to be a responsible employer. Being confident about your pay equity (and pay equality!) is critical to satisfying the wave of new pay transparency standards in the United Kingdom and elsewhere.
Is pay equity the same as equal pay?
Not quite. Though related, the two are slightly different. Pay equality is about employees receiving equal pay for equal work, regardless of gender, race, or other protected characteristics.
Pay equity, on the other hand, is about fair compensation and considers systemic and societal issues that can affect equal compensation. It's rooted in diversity and inclusion and aims to remove pay disparities caused by biases and barriers. For instance, a pay equity issue could be that, as per research, women are often less likely to negotiate for pay raises, leading to lower wages than men.
Salary transparency as a step towards pay equity
As working habits evolve, the role of company culture becomes increasingly significant. A fair and equitable workplace with a people-first approach is more vital than ever. A commitment to pay transparency makes employers more appealing to potential hires and significantly enhances trust within the organisation.
Pay transparency legislation
Pay transparency regulations are sweeping the globe. The EU's Pay Transparency Directive came into force in 2023, meaning that employers in the EU must disclose salaries on job adverts. If a company employs over 100 staff, it must publish gender pay gap statistics. While the UK is not a member state of the EU, as remote work continues to thrive, companies that do not match or share the same level of transparency will risk losing talent to those that do.
While national legislation in the UK prohibits private and public sector employees against pay discrimination under the Equality Act of 2010 (Gender Pay Gap Information) Regulations 2017, there are no pay transparency laws here…yet! So you might as well get ahead of it because it's only a matter of time.
Salary transparency isn't just a trendy buzzword. It's an essential step in creating a fair, equal, and trusting workplace. Companies that effectively communicate their compensation rules and ensure that all employees understand and trust the process can reap significant rewards for employee happiness, retention, and overall company reputation.
You can check out our jobs board here if you’re looking for a new job opportunity. Or, if you’re an employer looking to improve your salary transparency practices, stay tuned for a blog post on methods to achieve just that.
Contact us here if you need support reviewing your hiring and recruitment process or ensuring your job descriptions are inclusive.
