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Majority of UK companies plan increased pay transparency

Pay transparency is on the up, despite no new legislation

Currently 16% of UK companies are disclosing individual pay ranges to employees, the majority (54%) are considering doing so in the future, according to a study from broking company WTW.

Over half (54%) of UK companies are disclosing job levels to their employees and two fifths (43%) are communicating how individual base pay is determined. 

The study also found 52% of companies are planning or considering a new public commitment about pay transparency.

Read more: Show us the money! Is the UK falling behind on pay transparency?

The news is part of a global shift in attitudes towards pay transparency, according Eva Jesmiatka, Europe lead on pay and career equity at WTW.

She said: “We’re seeing a real step change around the world in relation to pay transparency.

“We’re seeing that companies have made pay equity and transparency a top priority as part of their intent to operate as a responsible employer. 

“Boards of directors have taken responsibility for pay equity and transparency matters and are looking for organisations to define, monitor and report on their commitments.”  

Pay transparency is being driven by a combination of factors, such as company values and culture (55%), employee expectations (56%) and DEI agendas (56%). 

62% of UK companies have stated that regulatory requirements are a driving factor for increased pay transparency.

In April 2023, the EU approved a new pay transparency directive which will mean employees have the right to request information about their individual salary level and the average salary level, broken down by gender, for categories of employees doing the same work or work of equal value.  

It will also mean employers must inform candidates about the initial wage level or pay scale in the job announcement and employers will not be able to ask future employees about their pay history. 

These measures do not affect the UK, but legislation requires firms with 250 employees or more to report their gender pay gap data every year.

Read more: Should the UK follow the EU and introduce a pay transparency directive?

Toby Mildon, founder of diversity and inclusion firm Mildon Consultancy, told HR magazine that pay reporting legislation should go beyond gender,

He said: “The gender pay gap regulations are encouraging greater transparency and the overarching ambitions for many businesses of fostering inclusion are accelerating this trend. 

“I’d hope that if the UK did follow in the EU’s footsteps adopt a similar directive that it would go beyond gender. The gender pay issue is a critical concern, but what about moves to ensure ethnicity and disability reporting, for instance?”

Mildon added that greater pay transparency will be beneficial for both employers and employees: “The benefits are manifold: from fostering trust and attracting top talent to proactively addressing pay equity issues, which strengthens an organisation's commitment to diversity and inclusion.”