27 Feb 2024
by Sarah Stone

The UK needs to catch up on pay transparency… and the tech sector could lead the way

Equal Opportunity - Reduce the disability employment gap and tackle workforce inequality.

Job adverts are usually packed full of crucial details as companies seek to bring on board the brightest and best in their sectors but in the UK, one key piece of information is becoming increasingly conspicuous by its absence: pay, the very thing that will often be the deciding factor in whether or not someone applies.

Tech candidates cite salary as the most significant factor for men and women, with 46 per cent prioritising it when deciding whether to apply for a role, according to IT recruitment firm Absolute Recruit.

Yet salaries remain shrouded in secrecy. One recent study found that only about 16 per cent of UK companies are currently disclosing individual pay ranges to employees, while a quick check of around 100 vacancies in social value-related positions that Samtaler carried out over the last six months found only a handful had clear pay scales for applicants.

When we started disclosing the salary from the outset for jobs at our company, we found the quality of applicants improved and the whole system was more streamlined.

A published wage for prospective candidates can help not just in terms of people dropping out of the process because they can’t take a pay cut, but can also indicate in the other direction for those who may not be ready for the seniority or expertise of the post on offer. It’s time for UK employers to catch up and ensure they are up front and transparent about salaries.

Losing the global race

The stakes are high but the timing has never been better. Across the globe regulations are being introduced compelling employers to publish information about pay rates. In the US, which is sometimes considered to be behind the curve when it comes to workers’ rights, pay transparency laws are spreading across the country with a wave of states, including New York, Washington and California, introducing laws and Congress debating Federal legislation.

While the UK is no longer in the EU, lawyers anticipate that the recently adopted EU Pay Transparency Directive will be highly influential for large UK-based EU employers who are likely to want to have a single approach that covers all their jurisdictions to ensure employees are all treated the same.

The new rules will require all companies operating in the EU to share information about salaries and take action if their gender pay gap exceeds 5 per cent, with fines for companies who fail to comply. Given that the technology sector currently has one of the biggest gender pay gaps, at 16 per cent (compared to the national average of 11.6 per cent) that should give companies cause for concern.

Social Value provides an opportunity for the UK Tech Sector to take the lead

In the UK, rules on publishing the gender pay gap in large companies have been in place since 2017, but there is currently nothing in relation to wage transparency more generally.

And where there’s an opportunity to catch up, there’s an opportunity to take the lead. The UK Government is currently conducting a pilot on pay transparency and with a General Election looming, the cost of living crisis putting salaries front and centre we should expect to hear more about it. The Labour Party is proposing more reporting requirements for employers, with ethnicity and disability pay gap reporting being made mandatory so it’s not unreasonable to expect to see this as one of their manifesto pledges.

Another thing to consider for UK employers is this: will a lack of pay transparency put them at a competitive disadvantage with EU and US firms when it comes to hiring and retaining the best talent? We work with big companies to develop programmes which help them create and deliver social value outcomes, which often means showing them how they can go over and above minimum legal requirements. Tackling workforce inequality is one of the key areas public sector procurers are looking to see suppliers take action and “introducing transparency to promotion, pay and reward processes” is one of the examples cited in the Social Value Model as a way the can do that.

Promoting pay transparency is an area where the tech sector could take the lead. Recent research by tech recruitment firm Robert Half found that more than half of UK tech hiring managers are planning to increase headcount for permanent roles in 2024, which means there are a lot of roles about to be advertised. With the UK’s technology industry flourishing, employers are facing a shortage of talent across areas including software development, data science and cyber security. It’s not just about attracting candidates; evidence also shows that pay transparency can significantly benefit minorities and traditionally underpaid groups by promoting fairness and helping rectify wage disparities across all demographics, not just gender.

The UK tech industry knows that diversity and inclusion is vital to the continued success of the sector with significant efforts being made to recruit and retain diverse workforces. Taking the lead and championing pay transparency is a natural extension of that work. Much of social value is about promoting transparency, which is something that tech professionals naturally embrace.

Indeed in the US, many tech employees are now taking pay transparency into their own hands with voluntary grassroots publishing of salaries and benefits being widely shared across spreadsheets and Google docs. It is likely, looking at the way the wind is blowing, that it will sooner or later be a legal requirement to publish pay scales in job adverts – therefore it makes sense now to get ahead of the game. But how exciting would it be if technology companies embraced and adopted this voluntarily?

What can you do about it?

Committing to salary transparency is very easily done – it essentially just involves will on the part of the employer. You can just start by publishing pay scales for roles.

A reputational boost

Despite so many employers being seemingly reluctant to do this, there are hardly any downsides to pay transparency. It helps attract better talent, is fairer to present and future employees, and also spares a number of potentially difficult and frustrating conversations in the interview room when it comes to the crunch subject of pay.

Above all, it’s reputation.

A clearly communicated pay structure will help a business show they are committed to equality, whether that’s in relation to gender, race, age or social class.

It’ll likely be law soon enough: employers may as well take the leap themselves first and reap the many benefits that will follow. And whether it’s law or not, in the world of recruitment the words “competitive salary” are no longer cutting it

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Heather Cover-Kus

Heather Cover-Kus

Head of Central Government Programme, techUK

Heather is Head of Central Government Programme at techUK, working to represent the supplier community of tech products and services to Central Government.

Prior to joining techUK in April 2022, Heather worked in the Economic Policy and Small States Section at the Commonwealth Secretariat.  She led the organisation’s FinTech programme and worked to create an enabling environment for developing countries to take advantage of the socio-economic benefits of FinTech.

Before moving to the UK, Heather worked at the Office of the Prime Minister of The Bahamas and the Central Bank of The Bahamas.

Heather holds a Graduate Diploma in Law from BPP, a Masters in Public Administration (MPA) from LSE, and a BA in Economics and Sociology from Macalester College.

[email protected]

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Ellie Huckle

Ellie Huckle

Programme Manager, Central Government, techUK

Ellie joined techUK in March 2018 as a Programme Assistant to the Public Sector team and now works as a Programme Manager for the Central Government Programme.

The programme represents the supplier community of technology products and services in Central Government – in summary working to make Government a more informed buyer, increasing supplier visibility in order to improve their chances of supplying to Government Departments, and fostering better engagement between the public sector and industry. To find out more about what we do, how we do this and how you can get involved – make sure to get in touch!

Prior to joining techUK, Ellie completed Sixth Form in June 2015 and went on to work in Waitrose, moved on swiftly to walking dogs and finally, got an office job working for a small local business in North London, where she lives with her family and their two Bengal cats Kai and Nova.

When she isn’t working Ellie likes to spend time with her family and friends, her cats, and enjoys volunteering for diabetes charities. She has a keen interest in writing, escaping with a good book and expanding her knowledge watching far too many quiz shows!

[email protected]
020 7331 2015

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Annie Collings

Annie Collings

Programme Manager, Cyber Security and Central Government, techUK

Annie joined techUK as the Programme Manager for Cyber Security and Central Government in September 2023.

Prior to joining techUK, Annie worked as an Account Manager at PLMR Healthcomms, a specialist healthcare agency providing public affairs support to a wide range of medical technology clients. Annie also spent time as an Intern in an MPs constituency office and as an Intern at the Association of Independent Professionals and the Self-Employed. 

Annie graduated from Nottingham Trent University, where she was an active member of the lacrosse society. 

[email protected]

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Ella Gago-Brookes

Team Assistant, Markets, techUK

Ella joined techUK in November 2023 as a Markets Team Assistant, supporting the Justice and Emergency Services, Central Government and Financial Services Programmes.  

Before joining the team, she was working at the Magistrates' Courts in legal administration and graduated from the University of Liverpool in 2022.  Ella attained an undergraduate degree in History and Politics, and a master's degree in International Relations and Security Studies, with a particular interest in studying asylum rights and gendered violence.  

In her spare time she enjoys going to the gym, watching true crime documentaries, travelling, and making her best attempts to become a better cook.  

[email protected]

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Sarah Stone

Sarah Stone

Director, Samtaler