Pay Transparency Laws and Their Effect on Hiring

Where are we now? The UK legal picture on pay transparency

Strictly speaking, the UK does not currently have a general pay transparency law that forces employers to post salary ranges on job adverts or bans questions about salary history.

However, there are three big legal and policy forces pushing employers towards greater openness:

1. Gender pay gap reporting

   • Employers with 250+ employees must publish annual gender pay gap figures, showing the difference in average pay between men and women.

   • Under the Employment Rights Bill, larger employers will also have to publish action plans to address their gender pay gap, making pay structures and progression routes more visible.

2. The UK Pay Transparency Pilot – and its “pause”

   • In 2022, government launched a pilot encouraging employers to include salary details in job adverts and avoid asking for salary history – precisely the kind of measures now common in many other countries.

   • In May 2024, ministers announced the pilot would be paused while they reviewed international evidence on the impact of pay transparency.

   • In practice, many employers took part, and some have kept those practices because candidates responded so positively.

3. Broader equality reporting on the horizon

   • The government is already moving towards wider pay-gap reporting (for example on ethnicity and disability for larger employers), and there’s pressure to strengthen enforcement and whistle-blower protections.

So while the UK hasn’t legislated “salary in every job ad” yet, the regulatory wind is blowing towards more transparency, not less.

Why UK recruiters can’t ignore the EU Pay Transparency Directive

You might think: “We’re in the UK; EU rules don’t apply anymore.” Not quite.

The EU Pay Transparency Directive requires EU member states to bring in national laws by 7 June 2026 that:

• Require employers to disclose salary levels or ranges to candidates – either directly in the job advert or before the first interview.

• Ban questions about salary history during recruitment.

• Give employees stronger rights to access pay information and challenge unjustified pay gaps.

If you’re a UK employer:

• With entities or staff in the EU, or

• Hiring remotely into EU countries, or

• Working with EU-based clients as an agency,

…you’ll need to align with these local transparency rules anyway. Multi-national employers are already preparing globally consistent approaches to job architecture, pay ranges and recruitment messaging so they don’t run multiple systems.

For UK recruiters this means: even without domestic legislation, your clients will increasingly expect transparent practices that work across EU and UK hiring.

How pay transparency is changing candidate behaviour

The biggest shift isn’t legal – it’s candidate expectations.

Several studies and market surveys show that salary transparency directly affects whether people even bother applying:

• A UK-focused survey cited by D&I Leaders found four in five jobseekers are less likely to apply if a job advert doesn’t show salary.

• Job posts with a salary range can generate around 44% more candidates than those without.

• SHRM research (US-based but directionally relevant) reports that 70% of organisations that list pay ranges see more applicants, and 65% feel more competitive in attracting talent.

• Academic work on pay transparency shows that applicants see transparent employers as fairer and more attractive, which boosts intention to apply.

Behavioural data backs this up too: research on transparency reforms in Europe found that roles advertising pay receive more clicks and applications, and that wages for new hires tend to rise where transparency is mandated.

Put simply: “competitive salary” is no longer competitive.

Candidates – especially Gen Z and younger millennials – interpret the absence of a salary range as a red flag: either pay is poor, equity is patchy, or the employer is behind the times.

Direct impacts on hiring in the UK recruitment market

a) Application volume and quality

For both agencies and in-house teams, posting salary ranges tends to:

• Increase application volume, particularly from under-represented groups who may be more risk-averse about wasting time on badly paid roles.

• Improve match quality, because candidates self-select based on realistic pay expectations rather than guessing from job title alone.

Result: better shortlists, fewer ghosted offers, and less time wasted in early screening.

b) Speed of hire and process efficiency

Clear salary bands:

• Reduce back-and-forth negotiation and “expectation mismatch” late in the process.

• Make it easier for recruiters to pre-qualify candidates on both skills and salary.

• Reduce candidate drop-out once they discover the package.

All of that shortens time-to-hire and frees consultant and TA time that would otherwise be spent firefighting offer-stage surprises.

c) Diversity, equity and inclusion

Pay transparency is increasingly seen as a DEI lever:

• By making ranges public and limiting salary-history questions, you reduce the chance that historic under-payment (often affecting women, ethnic minorities and disabled candidates) simply follows them from job to job.

• In combination with gender pay gap reporting and future ethnicity/disability pay disclosure, employers are under growing pressure to show that starting salaries and progression opportunities are equitable.

Recruiters who can evidence transparent, fair salary structures will have a stronger story when pitching roles to diverse talent.

d) Employer brand and client perception

Salary-transparent employers are increasingly seen as:

• More trustworthy,

• More modern, and

• More aligned with candidates’ values around fairness and openness.

For agencies, this becomes a BD angle:

• Clients who refuse to disclose salary are harder to recruit for, and the market is starting to notice.

• Being able to say, “We’ll only work with transparent salary bands because that’s what drives results” can be a differentiator – and an efficiency play.

Practical steps for UK recruiters right now

You don’t need to wait for a UK-wide law to start behaving as if one exists. In fact, if you do wait, you’ll likely be on the back foot when it arrives.

Here’s a pragmatic roadmap.

1) Move to salary ranges in every job advert

Wherever you control the advert (LinkedIn, job boards, your own careers site):

• Include a realistic salary range (base plus, where relevant, bonus/commission bands).

• Avoid overly broad ranges that look like box-ticking (“£25k–£60k depending on experience”).

• Use clear language on progression (“Typical OTE in year 2: £X–£Y with defined milestones”).

When clients push back, you can legitimately argue that:

• Transparency increases applications by a sizeable margin and builds trust – it’s not just “nice to have”; it’s commercially sensible.

  2) Phase out salary-history questions

  Even without UK law, the EU Directive and many global markets now ban asking about current or past pay.

  For UK hiring:

  • Replace “What are you currently on?” with “What range would you need to consider this move?”

  • Train recruiters to handle pushback from hiring managers who are used to anchoring offers on previous salary.

  This aligns you with emerging global norms and reduces legal/reputational risk for international clients.

  3) Align with internal pay and DEI work

  Recruiters can’t do this alone. Work with HR and reward teams to:

  • Build or refine job families and pay bands so your ranges are grounded in reality, not guesswork.

  • Check that starting salaries don’t consistently differ by gender or ethnicity at the same level.

  • Make sure your hiring practices don’t undermine your published gender pay gap or future ethnicity/disability pay data.

  When the numbers and the story line up, your EVP is far more credible.

  4) Upskill recruiters to talk confidently about pay

  Many recruiters still feel uncomfortable talking about salary up-front. That needs to change.

  Invest in training on:

  • How to explain salary ranges and progression transparently.

  • How to manage candidates who want the very top of the band.

  • How to manage clients who want “flexibility” but are underpaying versus market data.

  Those skills will soon be as essential as objection-handling or competency-based interviewing.

  5) Use data to prove the ROI of transparency

  If you want to shift sceptical clients and internal stakeholders, track and compare:

  • Application volume and quality with vs without visible salary.

  • Drop-out rate at offer stage.

  • Time-to-shortlist and time-to-hire.

  • Diversity of shortlists over time.

  Link improvements back to salary transparency in your reporting to give this credibility – especially helpful for recruitment agencies building a case to standardise transparent adverts.

 

The bottom line: pay transparency is coming, with or without UK law

The UK may be slower than some jurisdictions to legislate on pay transparency. The government has paused its own pilot while it “learns from other countries”.

But for recruiters on the ground, the writing is already on the wall:

• Candidates increasingly won’t engage with roles that hide salary.

• Regulators are tightening up around gender, ethnicity and disability pay gaps.

• EU rules are raising the bar for any employer hiring across borders.

• Employer brands that embrace transparency early are winning trust and talent.

For UK agencies and talent acquisition teams, the smartest move is to treat pay transparency not as a compliance headache, but as a competitive advantage: a way to attract better candidates, hire faster and build a more equitable, future-proof workforce.

If you’d like, I can now help you turn this into:

• A recruiter-facing guide (“How to sell pay transparency to clients”), or

• A client-facing explainer you can send to hiring managers to justify putting salary in their adverts.