Put salaries on job adverts to close gender and ethnicity pay gap, companies told

A new pilot scheme launched by the government aims to improve pay transparency and close the gender and ethnicity pay gap

The chief executive of the Fawcett Society called it an ‘important first step’ (Getty Images/iStockphoto)

Companies will be urged to list salaries on job adverts as part of a new government pilot scheme aimed at levelling up employment opportunities for women and ethnic minorities.

The new initiative seeks to improve pay transparency in the job application process and attract more women to positions.

Evidence shows that declaring a salary range on a job advert and removing the requirement to disclose salary history provides a solid footing for women to negotiate pay on a fairer basis, according to the government.

Research by the Fawcett Society reveals that 58 per cent of women said they felt they had been offered a lower salary offer after being asked about their pay history than they would have if the question had not been asked during the application process.

It is hoped that such a move will play a significant role in reducing salary gaps and tackling pay inequality.

The pilot, which is expected to last between six to 12 months, requires companies to sign up to mandatory reporting of salary bands on job adverts.

If successful, the initiative could be rolled out more widely.

Baroness Stedman-Scott, a Tory peer and minister for women, said the initiative is aimed at “breaking down the stigma” of talking about money and “improving transparency”.

“The UK can only grasp its full potential by championing its brightest and best, and ensuring everyone, regardless of their background, has the opportunity to succeed,” she said.

“We believe that increased pay transparency will build on positive evidence of the role information can play when it comes to empowering women in the workplace.

“It is essential that we keep women at the forefront of the levelling up agenda as we recover from the pandemic and rebuild together.”

Jemima Olchawski, chief executive of the Fawcett Society, called it “an important first step”.

She said: “We are pleased that the government is encouraging employers to remove embedded bias from recruitment practices and supporting our call to End Salary History.

“Asking salary history questions keeps women on lower salaries and contributes to the UK’s gender pay gap – and can mean that past pay discrimination follows women and other groups throughout their career.

“Evidence from US states which have banned asking about past salary shows that is a simple, evidence-led way to improve pay equality for women, people of colour and disabled people.”

She added: “We hope more employers will answer this call, and sign Fawcett’s pledge, as part of other actions to tackle their pay gaps.”

The news comes weeks after MPs called on the government to introduce mandatory reporting of the pay gap between staff of different ethnicities.

The House of Commons Women and Equalities Committee (WEC) said that large companies should be required by law to publish data on employee salaries and that there was no excuse for failing to tackle racial inequality in UK workplaces.

Women of all ethnicities work for free for almost two months a year in comparison to the average man, research by the Trade Union Congress has found.

And a report by the Fawcett Society published in January found that progress on gender equality is moving at “glacial” speed, with women holding fewer than a third of all top UK jobs.