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Hiring Advice Attracting candidates Salary Transparency in the Workplace: Best Practices to Boost Recruitment and Retention
Salary Transparency in the Workplace: Best Practices to Boost Recruitment and Retention

Salary Transparency in the Workplace: Best Practices to Boost Recruitment and Retention

Are your job ads not meeting your hiring goals? Is your company having difficulty retaining top talent? Maybe it’s time to revisit your company’s recruitment strategies, particularly the salary transparency in the workplace. This policy significantly influences your organisation’s ability to attract and keep top talent. So, it pays to understand how you can apply its best practices to your current hiring process.

According to leadership and management journalist Sally Percy, pay transparency is a way for employers to build trust with employees, boosting engagement and productivity in the workplace. However, she also added that employers interpret the term in different ways. Some employers view it as a way to communicate their pay practices — how pay is determined — to current and potential employees. Others refer to it as full transparency on the salary and salary ranges throughout the company.

Benefits of salary transparency

There are many reasons why salary transparency matters in Malaysia, including:

1. Attracting and retaining top talent

When jobseekers know what the salary range is for a position, they are more likely to apply for the job.

In Malaysia alone, 49% of jobseekers want to know the salary before they apply. This key finding in our latest Unlocking the Future of Recruitment Report underscores the fact that compensation is one of the key considerations in a jobseeker’s decision to apply to a position or accept a job offer. Pay transparency, therefore, works hand-in-hand with salary benchmarking.

Salary transparency can also help to reduce turnover, as employees are less likely to leave a company if they know they are being paid fairly.

2. Building trust between employees and employers

When employees know that their salaries are fair and transparent, they are more likely to trust their employers. According to a Harvard Business Review (HBR) report on transparency in salary or wages, the policy encourages a positive work environment that builds trust.

When an employer can voluntarily provide any information related to salary and compensation, it is easier for current and potential employees to have confidence in the company.

In addition, the research stressed that employees, especially the younger ones, tend to leave the company within six months once they discover that the pay process is not transparent. In contrast, top talent is always looking for companies whose values align with theirs. As such, they tend to gravitate towards employers that are open about valuing and compensating their people fairly.

3. Eliminating workplace discrimination

Pay transparency policies allow employers to communicate their stand on relevant recruitment issues, such as the gender pay gap and discrimination in the workplace. This is crucial as more Malaysian companies adopt a more progressive work culture, building on the country’s remarkable progress toward gender equality in the corporate landscape.

According to a recent BusinessToday report, there is still a notable disparity in the hourly wages of male and female workers in several occupational fields. As such, salary transparency in the workplace can help boost the reputation of companies actively addressing this discrepancy.

4. Boosting the reputation of companies

Companies that are transparent about their salary practices are seen as being more fair and equitable. This can boost their reputation and attract more top talent.

Best practices for implementing salary transparency in the workplace

Is your company currently not practising salary transparency in the workplace? Here are some best practices to integrate into your current strategies for hiring and retaining top talent.

1. Research and analyse salary changes in the industry and specialisations relevant to your organisation.

Here’s where key insights from the 2023 Salary Guide come into the picture. The report includes some relevant salary data facts and changes per industry and specialisation, as well as latest pay changes in major cities.

In addition, salary insights by industry and specialisation compare salary differences between SMEs and Corporate employers. Use this key information to design your pay communications policy, especially when informing current employees about major salary or compensation-related decisions by the company. This step will help assure your employees that their pay was fairly decided relative to the current market.

2. Be ready to show how compensation per role is determined, and what employees can do to change it.

Once you make your company’s intention to practice pay transparency known, expect employees to want to understand how their compensation is determined. So, make sure that they have a clear understanding of this right off the bat. Include a breakdown of the compensation package per role in your job ads, and be prepared to answer any questions about it during candidate interviews.

As for your current employees, the next step is to discuss what they can do to influence their compensation.

3. Establish a clear and unbiased link between performance and reward.

Performance-based incentives, bonuses, and pay increases are all part of the HR playbook for attracting top candidates and rewarding top performers. However, management experts advise implementing an objective approach to this practice.

The HBR research stressed that an objective performance measurement or reward system is key to bringing in the benefits of salary transparency. Ensure you have performance metrics that clearly show how employee output leads to specific rewards. This quantified strategy also removes the possibility for managers to evaluate performance during employee appraisals subjectively.

4. Avoid offering or negotiating personalised or individual rewards.

Since fairness is one of the main goals of salary transparency, it’s important to avoid any situations where an employee may feel that their colleague is getting a “better” deal or reward. To do this, HR and leadership experts recommend restructuring your company’s reward systems.

For example, you can make different non-monetary rewards available to employees and let them choose what they want once they qualify. Alternatively, you can offer deals for upskilling employees to boost performance or perks to reward and retain loyal employees. Then, everyone will feel they were given an equal chance to obtain the rewards they want or need.

5. Train managers on effectively communicating the company’s compensation policy.

One of the pitfalls of any effort to practice salary transparency in the workplace is the management’s limited understanding of the company’s pay policy. This often leads to inadequate or ineffective communication of the processes or specifics of the system.

To complicate things further, employees may not have enough appropriate channels to voice their questions or concerns about pay structure, benefits, incentives, and the company’s pay transparency policy. As such, it’s crucial to provide employees with proper management training and learning resources to ensure a clear and definite salary transparency policy.


Salary transparency in the workplace is an important yet often overlooked employer recruitment strategy. Companies having difficulty attracting and retaining top talent may benefit from establishing or revisiting their pay transparency policy. There’s a growing number of Malaysians who want to know the salary details before they apply. Likewise, young talent tend to leave the company early when they discover that the pay process isn’t transparent.

Companies must integrate best pay transparency practices to work to address these challenges, foster a culture of trust, and boost their reputation. These involve researching the current salary market, showing employees how their compensation is determined, establishing a clear and quantified performance-reward link, avoiding personalised incentives, and proper management training on the company’s pay transparency policy.

Ready to apply these salary transparency tips to boost recruitment and retain top talents in your company? Make sure to download the 2023 Salary Guide to plan your hiring strategies and support your pay transparency policies. Register now on JobStreet to stay updated on the latest talent acquisition and management trends on the Employers Insights page. You also get instant access to over 5 million talents in Malaysia through Talent Search.

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