Singapore companies embrace pay transparency

Indeed senior economist discusses increased adoption of pay transparency in Singapore to attract and retain top-calibre talent.

Responding to the competitive talent landscape in Singapore, companies are recognising the importance of pay transparency as a tool to attract and retain top-calibre talent, according to a recent study by worldwide employment website, Indeed.

In an interview with the Singapore Business Review magazine, Callam Pickering, Indeed’s  senior economist for Asia Pacific, gave his insights on the contributing factors to the growing trend based on their study which spanned the past four years.

Indeed’s study revealed a significant increase in pay transparency in Singapore and Pickering cited how approximately 35% of job postings their site in Singapore feature pay information, compared to only 21% four years ago.

Pickering attributed this surge to the intensifying competition for talent and the pervasive skill and talent shortages witnessed during the pandemic recovery.

Employers are leveraging pay transparency as a means to attract a larger pool of candidates and stand out in a fiercely competitive labour market.

“It’s a pretty smart approach because as what we have seen on Indeed is that job postings with future pay information consistently receive more applications than those job postings that don’t,” Pickering noted.

As a benefit to the employers, this approach enables them to tap into a wider talent pool and select from a higher calibre of candidates.

The practice of pay transparency is most prevalent in sectors such as administration, sales, and marketing, where pay transparency rates hover around 40%.

“All of those sectors have have faced some pretty widespread skill and talent shortages; and employers have had to respond by changing their approach to recruitment,” Pickering explained.

On the other hand, industries such as engineering and technology tend to be less transparent, with pay information featured in only 10-20% of such job postings.

These industries have traditionally adhered to a culture of pay secrecy, which may explain the lower adoption rates. Despite facing similar talent challenges, engineering and tech sectors have not embraced pay transparency to the same extent as other industries.

Implementing pay transparency offers various advantages for organisations. From a recruitment perspective, job postings with pay information attract more applications and higher-quality candidates.

“In terms of benefits within an organisation, research shows that employees who are in a more transparent working environments tend to be happier, they’re more engaged, they also tend to be more loyal, and work,” Pickering asserted.

He underscored how these outcomes are particularly valuable for organisations struggling with staff retention.

Looking ahead, Pickering told the Singapore Business Review that he anticipates a modest increase in pay transparency in the near term. “And that’s because competition for talent does still remain quite fierce across most sectors of the Singapore economy,” he explained.

As for the long-term, the Indeed senior economist said the outlook is quite uncertain. Pickering himself is asking: “If the Singapore economy or Singapore labour market softens, will employers be so willing to be transparent when they no longer have to be when there isn’t as much competition for talent?”

He said the sustainability of the pay transparency trend will depend on the unique circumstances of the pandemic recovery and any future shifts in the labor market.
 

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