Increased pay transparency may open doors to new challenges for workers and employers

47% of Australian workers believe increased pay transparency will lead to friction between colleagues

36% of Gen X workers are concerned it will lead to a negative corporate culture, compared to 30% of Millennials, 26% of Gen Z and 24% of Baby Boomers

84% of employers believe greater pay transparency will be positive for corporate culture and 65% say it will make salary negotiations easier

73% of employers believe regulation for greater transparency around salaries is long overdue

Sydney, 26 February 2024 – With the Workplace Gender Equality Agency (WGEA) publishing its gender pay gap report tomorrow, almost three-quarters (73%) of Australian employers recognise that regulation for higher transparency is long overdue according to new independent research by specialised recruiter Robert Half. Pay transparency can be a polarising topic with both employers and employees recognising the benefits as well as some challenges.

Workers hold concerns about pay transparency

Australian workers primarily recognise the benefits of salary transparency for their salary negotiations with two-thirds (66%) acknowledging more transparency will make salary negotiations easier. However, employees also raise concerns:

Almost half (47%) of workers believe increased pay transparency will lead to greater friction between colleagues.

More than a third of Gen X employees (36%) believe pay transparency will lead to a negative corporate culture, while 30% of Millennial, 26% of Gen Z and 24% of Baby Boomers feel the same.

Challenges of pay transparency for employers

Even though the majority of employers see the benefits of greater transparency in making salary negotiations easier (65%) and having a positive impact on their corporate culture (84%), many do hold a concern about how it could affect their attraction and retention strategy:

51% believe it may limit negotiating power, especially when looking to recruit particular skills or wanting to reward outperforming employees.

36% worry salary transparency could lead to losing employees.

“Pay transparency can be a contentious topic, yet our research shows that many employers and employees recognise the benefits while still having some concerns,” says Nicole Gorton, Director at Robert Half.

“Transparency around pay can provide employees with clarity when it comes to their salary expectations, both when applying for roles as well as seeking promotions and pay rises. Furthermore, understanding how remuneration is set can increase trust and employee morale as well as help promote a culture of fairness and equality.”

“However, workers have indicated in our research that comparing their salary to that of their colleagues and perceiving unfavourable differences can create a sense of disunity, which can negatively impact their workplace culture. Workers can also fear their ability to negotiate for a salary above market rates is limited if employers have a wider status quo that needs to be adhered to.”

“Employers generally regard pay transparency as an avenue for fostering openness and integrity within the workforce, contributing to a positive company culture. It can help them navigate pay rise requests more easily, identify possible refinements needed to the compensation structure and make their organisation more attractive to potential candidates.”

“Our research also indicates some employers hold concerns that pay transparency can reduce their negotiation power during hiring or promotion discussions, or lead to increased turnover rate, highlighting the importance of offering market salaries,” concluded Gorton.

Robert Half - pay transparency - Feb.pdf

Notes to editors

About the research

The study is developed by Robert Half and was conducted online in November 2023 by an independent research company, surveying 500 hiring managers (including 100 CFOs and 100 CIOs) and 1,000 office workers from companies across Australia. This survey is part of the international workplace survey, a questionnaire about job trends, talent management and trends in the workplace.   

About Robert Half

Robert Half is the global, specialised talent solutions provider that helps employers find their next great hire and jobseekers uncover their next opportunity. Robert Half offers both contract and permanent placement services, and is the parent company of Protiviti, a global consulting firm. Robert Half Australia has offices in Brisbane, Melbourne, Mount Waverley, Perth, and Sydney. More information on roberthalf.com.au.  

For more information

Courtney Fletcher

PR Manager Asia Pacific - Robert Half

Courtney.Fletcher@roberthalf.com.au

+61 421 209 304