Nick Allwood, Co-Founder and Director at RedGreen Partners gives his views on the soon to to be passed Government initiative on Pay Transparency.
A job seeker is applying for a mortgage, and the conversation goes something like this:
Mortgage Lender: ‘What’s your salary?’
Job Seeker: ‘It’s highly competitive’
Mortgage Lender: ‘Can you be a bit more precise?’
Job Seeker: ‘I was on your careers site earlier and that seemed to be the guide you used to advertise your salaries.’
Mortgage Lender: ‘I’m sorry to hear that, but we need an actual figure.’
Job Seeker: ‘Exactly!’
Whether that age old anecdote is true or not, it looks like it will be one relegated to the past as the UK Government seek to make salary publication mandatory with their ‘Say What You Pay’ initiative.
As we await confirmation of timings and enforcement arrangements the proposals will represent a significant change in how direct employers approach recruitment and reward.
It’s clear that greater salary transparency should create a fairer and more efficient recruitment market for everybody.
Those most affected demographic groups in society that are susceptible to pay inequality now have a usable guideline that will help.
Every candidate will be able to assess whether an opportunity meets their expectations before applying, potentially reducing unsuitable applications and late-stage withdrawals. Certainly increasing efficiency.
Openness should also help narrow pay gaps by limiting the influence of previous salary history and improving consistency when offers are made.
As a long-standing advocate for pay transparency it’s difficult to argue the say what you pay initiative will have a negative impact. It won’t if it’s implemented correctly. However, it will bring complexity to those organisations not familiar with job architecture and pay transparency in their organisations.
There will most likely be Employee Relations issues when published salaries are questioned by existing employees, heaping more workload on already struggling ER teams.
Pay compression may be a result of what is paid to less experienced versus more experienced employees to avoid dispute.
Conversely, some organisations may take advantage of broader salary ranges offering an unachievable ‘top end’ salary to entice candidates.
There’s always the issue of commercial sensitivity where competitors may use published salaries to understand an organisation’s pay strategy and allow them to target key employees based on knowing their salary.
For a HR recruitment consultancy like RedGreen Partners and our competitors it shouldn’t change much in terms of how we advertise our roles as pay transparency is one of the distinct advantages of using us.
Our role as a Partner can only become more consultative. Alongside sourcing candidates, we should be expected to provide reliable market intelligence, challenge unrealistic salary ranges and help our partners understand how their offer compares with competing employers.
I’d expect we’ll also see an uplift in the demand for candidates in the Total Reward area as companies look to improve their approach to compensation and benefits alongside job architecture and pay gap reporting.
Greater transparency should be positive if it leads to clearer, fairer and more efficient recruitment. However, publishing a salary will not, on its own, resolve wider questions about pay equity, progression or market competitiveness.
To discuss how competitive your salary might be amongst your peers or competitors get in touch to arrange a discussion at nick.allwood@redgreenpartners.co.uk.