The role of salary transparency in reducing workplace inequality

The global conversation around pay in the workplace has shifted significantly in recent years, with salary transparency becoming a central topic in job markets across the Asia Pacific. What was once considered off-limits or even taboo is now increasingly seen as a step toward building fairness and equity in the workplace.

This isn’t a passing trend. Employers and employees alike recognise that open conversations about salary can help address inequalities and create a more level playing field for everyone.

While the specific regulations and cultural attitudes towards pay transparency vary from country to country, the overall movement towards greater openness is gaining momentum throughout the region.

What is salary transparency?

Salary transparency refers to the practice of openly sharing information about pay. This can range from listing salary ranges in job ads to providing detailed pay scales across an organisation. It encompasses various levels of openness, from sharing basic salary ranges in job postings to full transparency where all employees' compensation details are accessible internally. This approach represents a significant shift from traditional practices where compensation discussions were often considered taboo.

Benefits of salary transparency

Against this backdrop of changing attitudes, salary transparency offers several key benefits while working toward crucial workplace goals:

1. Enables organisations to craft competitive compensation packages that attract top talent
2. Helps build a positive employer reputation
3. Fosters a sense of trust and open communication among employees
4. Saves time and resources for both job seekers and employers
5. Leads to more effective candidate filtering
6. Empowers employees to negotiate fair wages
7. Helps reduce pay disparities based on gender, race, or other factors
8. Increases employee satisfaction and retention
9. Streamlines the hiring process
10. Leads to more focused and productive salary discussions

Current market practices in Vietnam

Vietnam has seen a notable increase in salary transparency over the past two years, driven by market dynamics and evolving candidate expectations. “This trend can be attributed to a combination of market shifts and evolving candidate expectations,” explains Maya Nguyen, Partner at Page Executive.

The push toward transparency comes as Vietnam’s labour market experiences significant fluctuations, with sectors adjusting their hiring strategies to adapt to economic changes. Employers are increasingly using salary disclosure as a strategic tool to attract relevant talent, particularly in response to challenges with application quality. By proactively disclosing salary details, employers are able to reduce mismatches early in the recruitment process, a strategy that has proven to be effective in the current market dynamics.

The approach to salary transparency varies by position level. Michael Page consultants typically recommend including salary information for roles below the C-Suite to attract a broader range of qualified candidates. However, for Director and C-suite positions, a different strategy applies.

“We usually recommend keeping the compensation open. This is due to the complexity of executive packages, which typically include performance-based bonuses, equity options, and other elements that are challenging to quantify with a single base figure,” explains Nguyen.

This strategic approach to salary disclosure is particularly relevant in high-demand sectors like technology and senior management, where the talent pool continues to shrink. Clear salary communication helps set expectations and prevents potential misalignment, ensuring that companies engage only with candidates whose expectations align with their budget.

Salary transparency, beyond its practical benefits, has emerged as a powerful tool for employer branding in Vietnam. Companies that openly communicate compensation are often perceived as more transparent and candidate-friendly, which serves as a significant differentiator in Vietnam’s competitive job market. This positive perception can help companies attract top talent and foster a positive employer brand.

As Vietnam’s talent market continues to evolve rapidly, approaches to salary transparency are regularly reviewed to ensure they effectively reflect both candidate expectations and client requirements.

Addressing gender pay gaps

The gender pay gap is the difference in average earnings between men and women in the workforce. It is typically expressed as a percentage of men’s earnings and can be influenced by several factors, including occupational segregation, caregiving responsibilities, and educational background.

The current state of gender pay equity

According to Vietnam Talent Trends 2024 Report, many employees have mixed feelings about their employer’s efforts to address pay equity, highlighting the need for ongoing attention.

Some 23% of women are satisfied with their employers’ efforts to close the gender pay gap; 31% are dissatisfied, and 46% are neutral. The survey also revealed a significant disparity in DE&I priorities between men and women.

‘Closing the gender pay gap’ was ranked as women’s second most important DE&I initiative but only a sixth priority by men. It’s crucial to understand that the gender pay gap is not a simple matter of unequal pay for equal work, which is illegal in many countries.

How pay transparency tackles pay disparities

The gender pay gap is a complex issue, deeply intertwined with broader structural inequalities in the labour market. These include bias in hiring, promotion, and compensation decisions, and the underrepresentation of women in senior, higher-paying positions.

Promoting salary transparency helps level the playing field by:

• Empowering women and other underrepresented groups to negotiate fair wages
• Providing clear pay structures, enabling employees to advocate for themselves
• Reducing the likelihood of accepting less than deserved due to lack of information

Empowering employees through transparent pay

The practical implementation of salary transparency creates tangible opportunities for employee empowerment. When organisations provide clear access to compensation information, employees can:

• Make more informed career decisions
• Better understand their market value
• Develop clearer career progression paths
• Take a more active role in their compensation discussions

Effective implementation typically involves:

1. Providing clear salary bands and progression criteria
2. Offering regular market benchmarking updates
3. Creating structured processes for compensation reviews
4. Ensuring consistent communication about pay policies

When organisations successfully implement transparent pay practices, the impact extends beyond individual employees. Teams experience:

• More productive compensation discussions
• Increased trust in leadership decisions
• Greater understanding of career development opportunities
• Improved collaboration and reduced pay-related tensions

From a recruitment perspective, clear salary information helps candidates make informed decisions earlier in the hiring process, leading to more efficient and focused discussions about career opportunities and professional growth. While the benefits of transparent pay practices are clear, organisations often face implementation challenges that require careful consideration and strategic planning.

Action steps for employers and employees

Embracing salary transparency isn’t just about compliance – it is about fostering trust, fairness, and engagement in your organisation. Here's how both employers and employees can take meaningful steps towards greater pay transparency:

For Employers

1. Conduct a pay equity audit:

• Use data analytics to identify and address unexplained pay gaps.

2. Develop a clear compensation philosophy and structure:

• Clearly define how pay is determined, including factors like skills, experience, and performance.
• Communicate this structure to all employees to ensure understanding and buy-in.

3. Train managers on discussing pay transparently:

• Equip leaders with the skills to have open, constructive conversations about compensation.
• Include training on handling difficult questions and addressing pay discrepancies.

4. Gradually increase transparency:

• Start by including salary ranges in job postings.
• Progress to sharing pay bands for internal roles and eventually consider full pay transparency.
• Case study: Buffer’s full pay transparency policy has led to increased trust and an increase in job applications.

For Employees

1. Research industry standards:

• Use resources like Glassdoor and salary guides to understand market rates for your role and experience level.

According to our 2024 Candidate Pulse survey, job applicants in Vietnam primarily rely on these top three sources for the latest salary information, in order of preference: first, salary reports; second, recruitment agencies; and third, social media and online community sources like Reddit and LinkedIn.

2. Initiate conversations about pay transparency:

• Respectfully ask your HR department or manager about the company’s stance on pay transparency.
• Suggest anonymous salary surveys or the creation of pay bands as initial steps.

3. Advocate for clear communication:

• Request regular updates on the company’s compensation philosophy and practices.
• Encourage leadership to share how pay decisions are made, even if specific numbers aren’t disclosed.

4. Support colleagues in discussions about fair pay:

• Share industry salary information with peers (where legally and ethically appropriate).
• Advocate for equal pay for equal work across all demographics.
• Commit to taking at least one step towards greater salary transparency in the next 30 days. Whether you’re an employer or an employee, your actions can contribute to a more equitable and transparent workplace.

Challenges of Implementing salary transparency

While salary transparency brings numerous benefits, it also presents challenges for employers. Transparent pay structures can lead to internal dissatisfaction if employees perceive wage discrepancies, potentially impacting morale and engagement.

On top of that, sharing salary ranges publicly may spark wage competition among companies, making it challenging for businesses to retain top talent without continually adjusting compensation levels. Implementing transparency requires thoughtful planning to maintain fair compensation and clear communication to ensure employees understand how pay decisions align with experience and performance.

The future of salary transparency in Vietnam

As Vietnam's workforce continues evolving and aligning with global standards, the push for pay transparency will likely grow. This shift addresses pay equity and positions companies as progressive and employee-focused, which is increasingly important in today’s competitive job market.

Emerging trends on salary transparency

As the landscape of work continues to evolve, we can anticipate several key trends in salary transparency:

AI-driven fairness: The increased use of generative AI and data analytics will play a pivotal role in identifying and addressing pay disparities, ensuring fairer compensation practices.

Transparency as a competitive edge: More companies will recognise the benefits of transparent pay practices as a means to attract and retain top talent, fostering a positive employer brand.

Regulatory push: There is a growing likelihood of stricter legislation mandating greater pay transparency, particularly for larger corporations, reflecting a societal shift towards greater fairness in the workplace.

Moving towards a fairer workplace

Salary transparency is a powerful tool in the quest for workplace equality. By embracing this approach as part of retention strategies, organisations can promote accountability, build trust, and empower employees to advocate for fair pay.

As recruitment professionals, we have a unique opportunity to champion these changes, supporting employers and employees in creating more equitable workplaces.

Explore our job listings and the annual salary guides to stay informed about current salary trends and benchmarks. By fostering transparency in pay information, we can contribute to Vietnam’s fairer and more inclusive job market.

Explore salary insights

To get a comprehensive view of salaries and market benchmarks across various industries and roles in Vietnam, download the full 2024 Salary Guide, which features the average salary of roles in Vietnam's dynamic job market, or use our Salary Comparison Tool to see how your compensation compares to industry standards.

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