Why employers in Southeast Asia want pay transparency

Close to eight in 10 respondents believe it could make the company appear more attractive, while a similar number agree it can address the issue of pay gaps.

Pay transparency has increasingly become a big trend as companies tried to re-engage employers after the 'Great Resignation'. However, there is still much to be done around pay gaps and discriminatory pay.

According to research conducted by Milieu Insight, involving 5,000 respondents (including some who were decision-makers on hiring) across Southeast Asia, 60% believed that there are pay gaps in their countries. By market, the highest numbers of respondents who said so were in Thailand (72%) and Singapore (70%). The most common types of pay gaps, according to them, are based on age (57%), gender (54%), and nationality (42%).

How then, do individuals believe these gaps can be addressed? Per the findings, pay transparency is one way to tackle such gaps, with more than two-thirds of respondents agreeing that it would.

In that vein, many do believe in the need for a law mandating salary ranges on job listings, stating that it could benefit employers and job seekers alike. In particular, 76% believe that employers will benefit from it because “transparent practices like this can make the company appear more attractive”; while 71% strongly or somewhat agreed that it can help to address the issue of pay gaps. 

Job seekers, on the other hand, could benefit from pay transparency on job listings because it will provide clarity on how much they should be paid based on their experience or qualifications (76%), encourages competitive pay (56%), and helps to streamline the process of the job search – if the pay doesn’t satisfy, they don’t apply (54%), it was noted. Moreover, 50% of respondents said it helps close discriminatory wage gaps, and 39% like it as it takes away the need to research on pay.

With the above in mind, respondents did also point out some downsides to mandating pay transparency in job listings. For instance, 62% of employers believed that stating the salary ranges in job listings could unearth pay differences, which would lead to unhappiness among current employees.

At the same time, more than half (56%) said it could also spark a wage war among companies in the same industry and leave employers less room to negotiate pay (54%). Employers were equally worried about attracting candidates for the wrong reasons (51%) and losing the flexibility to design packages for new candidates that are outside of the new salary (49%).

Lead photo / Shutterstock
Infographics / Milieu Insight  

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