Thousands of Gen Z workers in the U.K. are currently navigating job applications, often feeling frustrated by the lack of pay transparency in their current roles and with potential new employers. However, this situation may be poised for significant change.
Almost half of U.K. employers are planning to adopt the practice, common in the U.S., of including salary ranges in their job listings. According to a survey conducted by Mercer International Inc., about 48% of employers intend to implement salary transparency within the next two years, compared to the current 17%.
Historically, employers have been hesitant to adopt salary transparency, concerned that it might lead to dissatisfaction among current employees who could demand pay raises or develop conflicts with higher-paid colleagues. While several U.S. states have mandated the disclosure of salary ranges in job postings, the U.K. and much of Europe have been slower to enact similar regulations.
Faced with a tighter labor market, employers seem driven by the need to attract top talent and retain their existing workforce. Adobe’s Future Workforce Study from last year indicated that 85% of Gen Z workers were less inclined to apply for positions that did not list salary ranges. Additionally, Gen Z workers are more likely to openly discuss their pay with colleagues, a departure from the traditional salary modesty observed by older generations.
Lucy Brown, a DEI and pay equity consulting leader at Mercer, told Bloomberg that transparency seems beneficial for employers as well. Employees who feel fairly compensated are twice as likely to understand the rationale behind their pay, she noted.
The majority of employers surveyed by Mercer cited compliance issues as a key motivator, especially with the upcoming EU Pay Transparency Directive, which will enforce stricter laws on employers starting June 2026. This directive aims to reduce the gender pay gap, partly caused by opaque salary practices at the application stage. However, the U.K. currently lacks specific guidelines on salary transparency.
Moreover, more companies are planning to establish global frameworks to align salary transparency policies, suggesting that compliance requirements in one region may prompt employers to adopt more consistent practices globally to improve retention rates.
Contrary to concerns that pay transparency might lead to workforce division, studies indicate it could actually motivate employees to perform better, particularly those who realize they earn more than their peers. While switching jobs for a significant salary increase has become less common, with the median pay bump for job-hopping having decreased in recent years, the current lack of pay transparency continues to drive employees to seek new opportunities.
Mercer’s study from last year revealed that employees who left their jobs received an average pay increase of 16.4%, compared to a 5.6% raise for those who stayed. HR professionals view the desire to leave for higher pay as an issue of perceived fairness and hope that increased salary transparency will help address these concerns.