June 8, 2023

Boosting Talent Acquisition and Retention with Pay Transparency

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With the wave of digital transformation and progression sweeping across the world, people become more observant and realise their priorities; employees and candidates are now more demanding about pay transparency than a few years ago. It is no longer acceptable for companies to disclose only sparse salary information to employees or candidates because pay transparency has become vital in creating a thriving and high-retention workplace. In fact, according to a survey conducted by PWC Global, Hopes and Fears 2022, 60% of employees say that pay transparency is essential as it affects their overall economic flow. 

Hence, companies will need to learn how to navigate salary transparency conversations effectively so that they will be able to attract candidates and retain current employees. 

Embrace Pay Transparency to Attract Talent

Candidates believe that there should be a law mandating employers to include salary ranges on job listings, which benefits both employers and job seekers. By practising pay transparency, employers will appear more attractive to job-seeking candidates and will be able to stay competitive. In addition to that, pay transparency will be able to help employers to address pay gap issues by discussing in detail with candidates about their pay compensation and how it progresses moving forward if candidates do join the company. 

Also, a survey conducted by Gartner revealed that 50% of employees didn’t apply for a role because the job listing didn’t include a salary range. So to increase the chances of attracting candidates to apply for roles, employers should include a salary range in their job listings, to let candidates know the salary range they should expect and the amount they can negotiate during their interview. 

Benefits of Pay Transparency

One of the benefits of practising pay transparency is pay equity. When employers are more transparent about how they will compensate the applying candidates, they’re more accountable for practising fair pay practices. Besides pay equity, there also several other benefits such as:

Attracting New Talent

According to Resume Builder, 85% of candidates will likely apply for a role in a company when the job listing includes a salary range. This is because candidates want to know if the salary range employers are offering is aligned with the expectations and responsibilities that come with the role they are applying for. This is to avoid disappointment and waste both parties' time and resources. 

Boost Productivity

An attractive compensation package is one of the major reasons for candidates to apply. Being transparent about the compensation package candidates will receive for their role early on during the recruitment process will help to screen out candidates that find the compensation package doesn’t align with their expectations. This will help recruiters to focus on more viable candidates that will increase the company’s efficiency and productivity.

Better Candidate Experience

An interview session that is transparent about salary range will increase a candidate's positive interview perception by 30%. This will improve a candidate’s view of a company and keep them engaged in the recruitment process. 

Increase Retention and Engagement

According to a survey made by Gartner, employees who perceive their pay as inequitable have a 15% lower intent to stay with their current employer. Providing transparent pay experience to both candidates and current employees will help employers to retain their talent and engage them effectively.

Drawbacks of Pay Transparency

Much like everything else in this world, there are also caveats to pay transparency stance despite the benefits it can provide. A current and recent survey shows that only 12% of companies around the world are willing to take the pay transparency stance. This is because pay transparency is a very narrow path for employers to navigate through and there are a lot of challenges to tackle, such as:

Workplace envy or resentment

When there is pay visibility provided, there is a risk to invoke jealousy or resentment to spread among a company’s employees. To avoid this, a company-wide announcement and meeting must be conducted to provide an explanation and justification for the pay decisions that were made.  This will help employees to understand why the pay decisions were made as such, thus hopefully suppressing workplace envy or resentment from continuing to spread among employees. 

Candidate Pool Reduction Due to Less Competitive Pay

When employers include a salary range that is less competitive in their job listings, may experience candidates having less interest. Resulting in fewer applications and less response rate.

Preparing Your Company For Pay Transparency

Since pay transparency comes with its own set of caveats, employers should consider preparing themselves before adopting a pay transparency stance so they can effectively tackle any issues that surface once they once have adopted pay transparency. 

Consider The Ideal Level of Pay Transparency

There is no one-size-fits-all approach when it comes to pay transparency. However, the most important thing to consider is a company’s culture and any applicable law to design pay transparency that is suitable for a company’s environment and culture. For example, measure and analyse the situation by handing out incognito surveys to gauge the suitable and comfortable amount of pay transparency level. Then design the pay transparency policy based on survey results. 

Structure and Align on a Compensation Philosophy

To effectively apply a pay transparency policy, a company needs to have a well-structured and well-aligned compensation philosophy. For example, a company needs to take into account what counts as compensation, because different companies have different understandings of what counts as compensation; some may schedule flexible and good salary range advancement, etc. And the best way to present a company’s compensation is by using a total reward statement where employees will be able to read and see a list of rewards included in the compensation that they’re entitled to. 

Pay Range Update

To continue effectively attracting new talent, companies will need to update their pay range. However, before a company updates their pay range, a company should run a pay analysis to compare the current updated pay range against its current pay range. This should allow companies to structure their pay update fairly. 

Help Company Managers and Leaders to Prepare

Adopting a pay transparency policy means there will be a lot of pay transparency conversations and questions with employees.  Companies’ managers and leaders need to be aware of what drives pay transparency demand so that they effectively address the questions during pay transparency conversations with employees and translate the conversation effectively into their reports.

Roll Out The Policy, Monitor and Adjust

Pay transparency policy has a lot of moving parts and is a complicated practice. So, it will require constant monitoring of matters such as; employees’ sentiment, pay equity, and offer acceptance rate. This way, companies can adjust and fine-tune their pay transparency policy as they progress forward.


The demand for pay transparency is increasing in today's digital age. Companies must recognize the importance of providing comprehensive salary information to both employees and candidates. Pay transparency not only helps create a thriving and high-retention workplace but also attracts top talent and maintains competitiveness. Including salary ranges in job listings is crucial to increase candidate interest and avoid wasting time and resources. Furthermore, pay transparency promotes pay equity and accountability for fair compensation practices. It also enhances the candidate experience, boosts productivity by attracting candidates genuinely interested in the compensation package, and improves retention and engagement among employees.

However, pay transparency does come with its drawbacks. Workplace envy and resentment can arise when salary information is openly shared, necessitating clear communication and justification of pay decisions to avoid negative effects on employee morale. Moreover, companies may face reduced interest from candidates if their salary ranges are less competitive. Companies need to prepare themselves before adopting a pay transparency stance, considering their organisational culture, applicable laws, and the ideal level of transparency. They should establish a well-structured compensation philosophy, update pay ranges effectively, and ensure that managers and leaders are equipped to address pay transparency conversations and questions. Regular monitoring and adjustment of the pay transparency policy are also necessary to address emerging challenges and maintain its effectiveness.

In conclusion, embracing pay transparency can lead to numerous benefits for companies, including attracting top talent, promoting pay equity, boosting productivity, enhancing the candidate experience, and increasing retention and engagement. While there are challenges and drawbacks associated with pay transparency, careful planning, implementation, and continuous monitoring can help organisations navigate this complex landscape successfully. By embracing pay transparency, companies can create a fair and transparent environment that fosters trust, attracts the right candidates, and supports long-term organisational success.

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