It’s time for the UK to champion salary transparency

In Britain it’s still common for private sector job adverts to describe a salary as ‘competitive’ or ‘at market rate’. But those terms mean very little if you don’t know what the market rate is, writes Niamh O Regan

Salary transparency can help reduce gender and ethnicity pay gaps, but the UK isn’t yet seizing that opportunity (AFP/Getty)

How much are your colleagues paid? How much could you earn in your next job? If you’re in Britain, you probably don’t know those things. And that’s a missed opportunity.

Salary transparency can help reduce gender and ethnicity pay gaps, but the UK isn’t yet seizing that opportunity.

New York City Council recently approved legislation that requires the inclusion of salary information on job postings, in an active step to fight gender and ethnicity pay gaps. The new rules state that from 1 November this year, every company in New York with more than four employees will need to disclose the minimum and maximum salaries that are on offer for any vacant position, including promotions or transfers. The state of Colorado introduced a similar policy last year.

Across the US, pay transparency laws are expanding more and more, with 10 states now having banned asking candidates about their salary history (and using it as a basis for deciding the new salary).

The British picture is very different. Here, it’s still common for private sector job adverts to describe a salary as “competitive” or “at market rate”. Those terms mean very little if you don’t know what the market rate is – and you probably don’t, because no one advertises it.

Knowing what you can expect to be paid for a role is hardly an outrageous demand, but in the UK, that expectation is only routinely met in the public sector. With the salary transparency laws coming in the US your final salary may still “depend on experience” but at least you will know the minimum you are guaranteed to receive. Not asking about salary history also means historic underpayments do not follow you around, perpetually effecting what your next salary will be.

The impact of legislation in the US is not yet clear, as the rules are still relatively new. However, thanks to a number of American companies who took up the baton for salary transparency early on, there is anecdotal evidence of the positive effects of transparency.

Buffer, Whole Foods, SumAll, GitLab, and Whereby all have different salary transparency policies, some going as far as publishing individual salaries internally and externally. They have reported that workers’ increased trust has led to an increase in productivity, greater collaboration and a hiring process that attracts more applications, of better quality. It has also helped them to reduce their gender pay gap.

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The UK government launched a voluntary salary transparency pilot in March, where participating employers will include salary information on their job ads and will not ask about salary history. I welcome this effort to help reduce the gender pay gap, but it will really only count if it actually leads somewhere long term. Ministers have not announced what they plan to do after the pilot, and they have not indicated if they have any plans to actually legislate for salary transparency.

There is appetite for increased transparency in the UK. At base level, applicants – particularly women and ethnic minority candidates – are often put off even applying for roles where job adverts don’t include a salary , which could significantly reduce an employer’s talent pool. And women and minorities have a right to know if they are being paid less than male and white counterparts.

It’s not just Americans embracing transparency. The EU is also considering its own disclosure rules. By refusing to talk about pay, Britain risks falling behind.

Niamh O Regan is a researcher at the Social Market Foundation thinktank, with previous roles in higher education and research on nuclear issues