While there is no legislation in India that mandates pay transparency, the workplace landscape has undergone a transformation since the pandemic, particularly with the entry of Gen Z employees are embracing pay transparency.
Recent data from a global jobs portal, Indeed, highlights that 46 per cent of job postings in India now include employer-provided salary information. This represents a noteworthy increase of 64 per cent over the past year and 11 per cent over the past three years.
However, it's important to note that this trend has not been consistently upward, as there was a 3 per cent decline in March 2020 compared to the previous year, followed by a substantial 24 per cent decrease in March 2021 compared to 2020.
According to Sashi Kumar, the Head of Sales at Indeed India, as the population and number of employed individuals in India continue to rise, employers are adapting to the changing demographics by adopting new strategies to attract the latest generation of talent.
“High attrition rates and intense competition for skilled workers necessitate a shift towards pay transparency. Both job seekers and employers can benefit from this approach, as it can enhance the efficiency of the hiring process for both parties. Going forward we see the market being more conducive for pay transparency,” Kumar said.
Geographic and industry variations in salary transparency
Despite the overall increase in salary visibility in job postings, the numbers vary significantly based on different geographies and industries in India.
When comparing tier 1 cities to tier 2 and 3 cities, there is a clear disparity. Major cities like Delhi, Mumbai, and Bangalore witnessed the highest increase in job postings with salary details, with Delhi leading at 208 per cent, followed by Mumbai at 71 per cent and Bangalore at 63 per cent.
On the other hand, tier 2 and 3 cities like Nashik and Surat experienced a decline in job postings with pay details , with Nashik at -8 per cent and Surat at -2 per cent. Cities like Ahmedabad, Vadodara, and Mohali saw only marginal increases of 2 per cent, 15 per cent, and 18 per cent respectively.
The trend of pay transparency is also evident in remote job postings, which saw a substantial 76 per cent increase in the inclusion of salary information. This highlights the continued importance of remote work opportunities in the Indian job market, with more employers recognising the significance of transparency in attracting the right talent.
Over the past year, high-wage occupations such as finance, engineering, and mathematics have experienced the fastest growth in pay transparency. The finance industry witnessed the most significant increase, with a remarkable 122 per cent rise in salary transparency from 2022 to 2023. Engineering followed closely with a 107 per cent increase, while mathematics recorded a 100 per cent increase. Meanwhile, sectors like education, media, and marketing saw relatively lower growth in salary transparency, with increases of 16 per cent, 17 per cent, and 20 pee cent respectively.
Global focus on pay transparency
Pay transparency has become a global priority for many organisations as they aim to promote a positive work environment and narrow the gender pay gap.
In the US, over 40 per cent of job postings on Indeed now include salary information provided by the employer, a 137 per cent increase in the past three years, driven by transparency legislation and a tight labour market and the trend is continuing to rise.
High-wage jobs, which have historically provided less pay information upfront, have experienced the greatest increase in transparency in the past year.
Similarly, in Singapore, there has been an 82 per cent rise in salary details in job postings since March 2019.