The Government’s Equal Pay and Pay Discrimination consultation
So this really caught my attention, it has been talked about for a number of years after being rolled out in the US and recently in Europe. In general it seems like a good thing but after speaking to HR and inhouse Talent Executives, its triggering some internal panic!
While the headline goal is simple (force pay ranges onto job ads to close pay gaps), the operational ripple effect inside businesses is going to be massive.
The main issue seems to be current benchmarking especially across SMEs, it can be messy internally and without this cleaned up first it would create a firestorm advertising specific salaries
Why HR is dreading the “Firestorm”
Legacy employees vs. new-hire pay gaps. In almost every sector, market inflation means new hires have been coming in on higher packages than loyal, long-tenured staff doing the exact same role.
The moment a company posts a job advert for a Mid-Level Engineer at £65k–£75k, every current Mid-Level Engineer earning £55k is going to knock on HR’s door.
To avoid triggering internal revolt, companies try publishing ultra-broad bands (e.g., £40,000 – £85,000). However, in the US the lawmakers quickly caught onto this and started requiring “good faith” narrow range, something the UK consultation is looking into.
Fixing internal compression (raising legacy staff up to market rates) requires huge benchmarking projects, this is fine for larger companies but for SMEs this is going to be painful in the short term.
Compensation & reward consultants will boom
SMEs rarely have dedicated Reward Directors, Companies will have to pay for external consultants to clean up job banding and conduct equal pay audits before ads go live.
Companies will lean harder on retained search
For sensitive, high-earning, or bespoke roles, companies will lean much harder on retained search. By keeping recruitment off public job boards and routing candidates through confidential search processes, businesses buy time to handle negotiations privately.
What US lessons teach us
Stateside data shows that after the initial 12–18 months of operational benchmarking chaos, the market adapts with:
Shorter salary negotiations: Candidates apply only to roles that meet their base requirements, drastically cutting down wasted interview rounds.
Better internal compensation intelligence
Employer brand enhancement. The initial interview experience is perceived by candidates as being more transparent and honest.
The real game changer
The real game changer would be banning salary history conversations like in the US and some of the EU, That stops historical pay discrimination from following women and minorities from job to job.
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