Transparency: key to unlocking pay inequality

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It is a very British thing – to be coy about disclosing what you earn. Why? Is it about status:  you might be earning less than your mates.  Is there embarrassment for high earners about being paid so much?  Or is it just ‘the way things are’ – with no rational explanation.

Lack of transparency may suit some employers who prefer not to have to justify pay differentials.  We have frequently been told by clients that they are actively prohibited from talking about pay with their colleagues despite legislation that is meant to allow people to ask that question. The employer’s defence to complete transparency is that it is a private matter between employer and employee or that data protection law prevents disclosure.  This does not wash.  There is a simple solution: the employer could make it clear in all contracts of employment that there will be pay transparency for all.

I have difficulty understanding the shock when I suggest pay transparency is key.  Isn’t it obvious that lack of transparency is bad for all:

  • Employees suspect (rightly or wrongly) that they are paid less than their colleagues and feel it is unfair. Why create that uncertainty?
  • It facilitates cronyism when workplace decisions, whether about pay, recruitment, promotion, are not transparent; so often I hear that the boss has decided to bring in his (and it is mainly his) colleagues from a previous job – how is that fair for existing employees;
  • It reinforces the glass ceiling in workforces dominated by men – and there are a fair few – as there is still a tendency to prefer ‘people like us’;
  • Most importantly, we will never achieve equal pay until there is pay transparency.

So what next?

  • The law needs to move towards pay transparency – that includes bonus transparency
  • Employers should sign up now to pay transparency
  • Men should be willing to disclose their pay: #heforshe is a great campaign led by Emma Watson
  • Women who suspect they are being paid less should be told about the pay of their peers.

In Norway everyone’s income is published by way of their tax reports which are a matter of public record. It is surely no coincidence  that Norway is one of the most equal societies (from a gender pay gap point of view) in the world.

Nearly 50 years after the Equal Pay Act 1970, it really is time we cracked this inequality.

Life's too short to litigate