19.05.2022

Pay secrecy is driving workplace inequality

New research by Glassdoor, the worldwide leader on insights about jobs and companies, has found that UK employees are in the dark when it comes to money and pay secrecy is driving inequality in the workplace.

Salary remains a taboo subject with just 15% of workers saying their company discloses pay ranges internally among employees. Glassdoor lifts the lid on pay secrecy by sharing salary information left anonymously by millions of employees worldwide.

With widespread labour shortages across the UK, pay transparency is a powerful weapon for the many companies struggling to hire. New Glassdoor research found 2 in 5 workers (41%) have NOT applied to jobs where the salary is unknown. Furthermore, as employers battle to retain talent amidst the Great Resignation, workers cited transparent pay structures as the primary indicator of a company’s long-term potential for employment.

“Every company should be embracing salary transparency. It is only by removing pay secrecy that employers can address potential pay gaps and ensure equal pay for equal work,” comments Christian Sutherland-Wong, Glassdoor Chief Executive Officer. “Glassdoor’s vision is radical transparency in the workplace. Pay transparency empowers job seekers and employees to understand better what fair pay looks like for their experience and skills. Top talent wants to work for companies that embrace pay transparency, and employers who evolve will have a competitive edge in a tight labour market. Now is the time to take action and actively share pay information.”

FROM THE JOB LISTING TO THE WATERCOOLER, SALARY IS TABOO

For nearly two-thirds of employees (64 percent), salary is the #1 factor when switching to a new job, but 1 in 5 (20 percent) workers have no idea of their earning potential. With rocketing inflation impacting daily life, finding employment to support the increased cost of living is a concern for 1 in 4 (22 percent) UK workers - rising to 32 percent amongst Black workers specifically.

However, 2 in 5 (41 percent) employees did NOT know the salary of their most recent job before applying. This figure increases to 52 percent for workers in Yorkshire and Humber and 66 percent for those in Northern Ireland.

One in 2 (50 percent) workers believe salary secrecy has limited their career options. Amongst Gen Z workers (aged 18-24), this statistic jumps to 60 percent, and the problem is even more acute for Black employees (69 percent).

CHALLENGING HIRING CONDITIONS MADE EASIER WITH TRANSPARENCY

Three-quarters (75 percent) of UK workers would be more likely to apply for a position that includes a salary range on the job listing.

Pay transparency helps people make informed career decisions and improves the candidate experience by setting clear expectations early in the hiring process. It also makes the process more efficient for employers and the talent acquisition team.

But while the salary on offer should be made clear, 62 percent of employees believe that companies should not ask job candidates for their current or past compensation in the negotiation process. This figure increases to 78 percent amongst Black workers and 73 percent for Asian employees.

EQUAL PAY FOR EQUAL WORK

Once in their role, UK workers appear to adhere to a culture of pay secrecy. Just 1 in 4 (25 percent) feel comfortable discussing their pay with their boss and only a quarter (25 percent) of employees have shared their salary with a co-worker. However, 62% of UK workers would be willing to share their salary anonymously.

Salary secrecy is driving pay inequality in the workplace, and the research found that significant action is needed to address pay gaps. Half of workers (50%) think their employer should be doing more to close pay gaps and over a quarter (27 percent) of employees suspect that pay inequality exists in their company.

GLASSDOOR TOOLS FOR JOB SEEKERS, EMPLOYEES & EMPLOYERS

To help address the disparity, Glassdoor offers a variety of resources for employers, job seekers and employees. Employers can reference Glassdoor's pay transparency report as a template for how to share their own pay information with both current employees and job seekers. Glassdoor also provides base pay ranges for all open jobs at the company –an easy-to-implement effort that has helped increase applicants’ quantity and quality. For employees and job seekers, Glassdoor provides millions of salaries at companies across a wide range of industries that can be sorted by location and years of experience, too. Anyone can anonymously share their salary through Glassdoor’s salary features and tools. At the same time, Fishbowl by Glassdoor encourages anonymous questions and candid conversations about pay, total compensation, salary negotiation and more among industry peers.

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