Salary transparency rules could expose the 'loyalty penalty' for existing workers, IRIS Software Group study suggests

• 37% of early-career employees say experienced junior staff should be paid more where the gap with new starters has become too small.
• 36% want existing salaries reviewed before a new role is advertised, compared with 24% of HR leaders whose organisations plan to do so.
• Fewer than half (43%) of employers are fully prepared for the proposed rules, while one in nine say they are not prepared.

LONDON, Oct. 27, 2026 /PRNewswire/ -- Government plans to make salaries more transparent could expose a "loyalty penalty" for existing workers, with 37% saying experienced junior employees should be paid more where their salaries have become too close to those offered to new starters if new rules come into force.

New research from HR and payroll software specialist IRIS Software Group, whose software is used to pay one in six UK employees, found that 36% of employees who have been in full-time work for between two and five years also want clearer pay differences between new starters and more experienced employees.

A further 36% say employers should review the salaries of existing staff doing the same or similar jobs before advertising a vacancy with salary information.

The findings come as the Government consults on proposals requiring employers across England, Scotland and Wales to publish salary information in job adverts, or provide it in writing before interview where there is no advert.

But many employers may not yet be ready for the scrutiny greater transparency could bring. While 89% of senior HR leaders polled by IRIS describe their organisation as at least mostly prepared for possible salary-publishing rules, fewer than half (43%) say their pay bands and ranges are ready to publish. One in nine (11%) say their organisation is not prepared.

Stephanie Kelly, Chief People Officer at IRIS Software Group, said: "Salary transparency sounds like a recruitment issue, but its biggest impact could be on the people who already work for organisations.

"If an employee with several years' experience sees their employer advertising for a new starter with less experience on almost the same salary, they are naturally going to question what their experience and additional responsibility are worth.

"Publishing the salary is the straightforward part. Employers will also need to be able to explain why people are paid what they are, and stand behind those decisions."

The research also points to a gap between what employees expect greater transparency to mean and what employers currently plan to do.

Four in ten (39%) employees want employers to explain how experience, performance and responsibility affect pay, compared with just 25% of senior HR leaders whose organisations plan to explain how starting salaries and progression are determined.

More than a third (36%) want existing salaries in the same or similar roles reviewed before a vacancy is advertised, but only 24% of HR leaders say their organisation plans to carry out such a review.

And while a third (33%) of employees want the opportunity to request a pay review, just 21% of HR leaders say their organisation intends to offer one.

Greater visibility of workforce data could therefore become increasingly important as employers prepare for the proposed rules. More than one in five (22%) senior HR leaders say their current HR systems and workforce data are not capable of comparing advertised new-starter salaries with the pay of existing employees.

Stephanie Kelly added: "Employers shouldn't wait until a salary appears in a job advert to discover that it raises difficult questions internally.

"Having the right workforce data gives employers the visibility to understand how new-starter salaries compare with existing pay, identify where gaps have narrowed and decide whether action is needed.

"For employers, having a clear view of pay across recruitment, HR and payroll could help identify where new-starter salaries are closing in on those of more experienced employees, and where existing pay structures may need further scrutiny."

The Government's consultation closes on 27 October.

Notes to editors

The research was conducted by Censuswide on behalf of IRIS Software Group among 511 UK senior HR professionals and 500 UK employees who have been in full-time work for between two and five years. Data was collected between 30 July and 5 August 2026.

About IRIS Software Group

IRIS Software Group provides intelligent software for accounting, HR, payroll and education. Supporting organisations where the work has to work, IRIS helps customers run essential, compliance-grade systems with confidence. Trusted by over 800,000 organisations across 135 countries, IRIS is backed by nearly 50 years of innovation and deep domain expertise together with data and AI to help customers work smarter, spot what matters, reduce risk and move forward with confidence to grow.

For people and payroll teams, IRIS helps organisations support employees from hire to retire, pay people compliantly, accurately and on time, and build stronger businesses. Its software and flexible services connect HR, payroll, recruitment, talent and workforce information, helping teams reduce risk, improve employee experience and turn workforce data into clearer insight for better business decisions.