Talking about money at work has never been easy, especially during hiring. Most job ads on LinkedIn or other portals describe the role in detail: the responsibilities, the skills required, and even the company culture. But one important detail is almost always missing, the salary.
For job seekers, this lack of clarity often creates more questions than answers. Take, for instance, when recruiters say, “We can offer a 40% hike on your current salary.” This is not real transparency; it is just a way of setting a reference point without revealing the actual range. It shows that the company has a budget in mind but prefers to keep it hidden. As a result, many strong candidates may walk away, expecting more openness from the employer.
This matters because salary is rarely a side concern, it is one of the biggest factors in deciding whether to apply for or accept a role. Research backs this up.
A recent survey by Monster highlights this clearly. Some 44% of Gen Z graduates say they would walk away from an application, even by ghosting the recruiter, if the salary range was not shared during the process.
This is where pay transparency comes in. At its core, it is about openness and fairness. It means giving employees, job seekers, and sometimes even the public clear access to salary information. Yet, despite the growing demand, Indian workplaces continue to hold back. The question is, why? And why does transparency matter now more than ever for today’s workforce?
What Pay Transparency Really Means
Pay transparency is essentially about how openly employers share salary information with their employees and job applicants. This can take different forms, such as including pay ranges in job postings, making salary structures accessible within the organisation, or providing details when requested by applicants.
This practice comes with many benefits, such as:
- Builds trust between employees and employers: Openness about pay helps employees feel valued and confident in the organization.
- Promotes fairness: Transparent pay practices ensure everyone understands how salaries are determined.
- Improves workplace morale and employee satisfaction: Clear pay information reduces uncertainty and increases employee satisfaction.
- Reduces pay gaps and inequality: Transparency helps identify and correct disparities in compensation.
- Attracts and retains top talent: Candidates and employees are more likely to join and stay with organizations that are open about pay.
- Screens out unwilling candidates: Clear pay expectations help potential hires self-select, saving time for both parties.
However, sharing salary details upfront also brings some challenges.
- Many organisations worry it could create tension among employees if they feel they are being paid less than their colleagues. This can affect morale, reduce productivity, and harm workplace culture.
- Another concern is competition. Rival companies could use this information to attract employees with better offers. At the same time, high-performing employees may choose to leave for jobs that pay more, even if the role itself is almost the same.
The State of Pay Transparency in India
Around the world, many countries have already taken big steps toward pay transparency. In the United States, new state-level laws now require employers to share salary ranges, giving job seekers more power in pay discussions. But these rules are not the same everywhere, which makes it difficult for global companies to follow them consistently.
Some companies started pay transparency even before laws required it. Starbucks and Glitch are good examples. Starbucks stopped asking candidates about past salaries and began telling them pay ranges when they asked, according to LinkedIn.
Europe is also moving in this direction. Its Pay Transparency Directive, set to take effect in June 2026, will make transparency and enforcement mandatory. The directive aims at narrowing the gender pay gap and will require organizations to publish the percentage difference in pay between men and women, as well as the ratio between the highest-paid employee and the company’s average salary.
India, meanwhile, has no legal mandate requiring employers to share salary details with applicants or employees for specific roles. But the conversation around pay transparency is gaining traction.
According to Indeed, the share of job postings in India that included salary information crossed 50% in early 2025—up from just 26% in March 2022 and 47% by the end of 2023.
Practical steps towards pay transparency
Pay transparency is more than just publishing numbers. It’s about building trust and creating fair systems. Here are some practical ways companies can get started with this practice:
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- Review and Standardize Pay Structures: Start with a compensation audit to see if pay is fair across the organization. Use the findings to identify gaps and set clear salary ranges for each role and level, so employees understand how their pay is decided. Along with this, create a clear compensation philosophy that explains how your company compares with the job market and where it wants to position its pay.
- Communicate the “Why” Behind Pay: Transparency works best when employees understand the reasoning. Explain clearly how salary bands are determined, whether through data, formulas, or set criteria. Share the factors that influence pay, such as experience, extra responsibilities, performance, and achievements. This builds trust and helps employees feel they are being treated fairly. Many compensation management software tools can also help create fair and competitive pay systems.
- Train Managers to Talk About Pay: Managers should fully understand the compensation philosophy and process. Provide them with materials such as FAQs and communication toolkits so they can answer employee questions confidently.
- Have structured pay bands: Structured pay bands make salary transparency easier by showing the range of pay for each role or level. Employees can see what is considered fair for their position without knowing anyone else’s exact salary. This reduces confusion and perceptions of bias, helps managers explain pay decisions consistently, and ensures alignment with market standards and internal fairness.
- Close Gaps Proactively: Regularly monitor data to spot and address pay disparities, especially around gender, tenure, or role level.
Introducing pay transparency by sharing salary ranges can help build trust and strengthen your employer brand. At the same time, it’s important to talk to your employees first, as some, especially those who have been with the company for a long time might feel unsure about this change. With careful planning and open communication, pay transparency can be a positive step for both the company and its employees.
