[North America] Pay transparency and communication around pay is improving

According to new research, the majority of North American organisations are now communicating pay programme information to their employees, HR Today reports.

The 2024 Pay Transparency Survey - by global advisory, broking, and solutions company WTW - revealed that several factors, including increasing regulatory requirements around the globe such as the EU Pay Transparency Directive, are encouraging North American organisations to establish pay transparency strategies. 

These strategies reportedly include assessing their job and pay structures, evaluating their pay policies and practices, conducting pay gap and pay equity analytics and preparing for increased pay communication and education among all stakeholders.  

The survey found that communicating job level (74 per cent), variable pay opportunities (58 per cent) and how individual base pay is determined (65 per cent) are already typical practices across the region, with at least 55 per cent of respondents doing so or planning to do so.

Sharing individual employee pay ranges and how pay ranges are determined are also set to become more widespread practices as the adoption of pay transparency legislation continues to increase across the US, Canada, and Europe.  

When it comes to sharing pay ranges with job candidates, a majority of organisations already reportedly communicate the hiring range for jobs to both their external candidates (75 per cent) and internal candidates (69 per cent).

Of the organisations with operations in North America that are already communicating information, most (86 per cent in the U.S. and 58 per cent in Canada) communicate pay rates or pay ranges across the entire country or region regardless of state or provincial regulations.  

The survey showed that regulatory requirements are the most common factor (73 per cent) behind increased communication about pay programmes. Other common factors included confidence in their company values and culture (47 per cent) and employee expectations (46 per cent). 

“Employers are seeing an increase in regulatory requirements around the globe, which has forced many to act fast and comply with a consistent minimum standard, regardless of location,” Mariann Madden - North America pay equity co-leader at WTW - said. “As a result, we’re seeing employers across North America increase the visibility of pay information as well as provide clarity to employees about their pay. Now is a good time for organizations to review their job and reward structures. A clear, consistent and well-documented pay transparency strategy will ensure accurate pay information is shared with both job candidates and employees.” 

WTW found that more than half of North American employers (56 per cent) are establishing metrics to assess the impact of their pay transparency strategy, regardless of legislation. Employers are evaluating employee retention (40 per cent), questions received from employees (37 per cent) and managers (37 per cent), and the change in gender pay gap (36 per cent). 

“There has been a step-change in pay transparency as more organizations choose to be open about their pay structures and practices,” Lindsay Wiggins - North America pay equity co-leader at WTW - said. “We see that employers are still wary of their employees’ reactions.

"The increase in transparency raises questions and comparisons between job postings for prospective employees and how they stack up with internal salaries and has the potential to surface many of the inequities that have resulted from a recent emphasis on hiring people higher in the range and salary compression for existing employees. By strengthening pay policies and HR/manager guidance to support pay decisions upon hire, for a promotion and during the annual review cycles, employers can reduce the risk of pay inequity.”

Source: HR Today

(Quotes via original reporting)

According to new research, the majority of North American organisations are now communicating pay programme information to their employees, HR Today reports.

The 2024 Pay Transparency Survey - by global advisory, broking, and solutions company WTW - revealed that several factors, including increasing regulatory requirements around the globe such as the EU Pay Transparency Directive, are encouraging North American organisations to establish pay transparency strategies. 

These strategies reportedly include assessing their job and pay structures, evaluating their pay policies and practices, conducting pay gap and pay equity analytics and preparing for increased pay communication and education among all stakeholders.  

The survey found that communicating job level (74 per cent), variable pay opportunities (58 per cent) and how individual base pay is determined (65 per cent) are already typical practices across the region, with at least 55 per cent of respondents doing so or planning to do so.

Sharing individual employee pay ranges and how pay ranges are determined are also set to become more widespread practices as the adoption of pay transparency legislation continues to increase across the US, Canada, and Europe.  

When it comes to sharing pay ranges with job candidates, a majority of organisations already reportedly communicate the hiring range for jobs to both their external candidates (75 per cent) and internal candidates (69 per cent).

Of the organisations with operations in North America that are already communicating information, most (86 per cent in the U.S. and 58 per cent in Canada) communicate pay rates or pay ranges across the entire country or region regardless of state or provincial regulations.  

The survey showed that regulatory requirements are the most common factor (73 per cent) behind increased communication about pay programmes. Other common factors included confidence in their company values and culture (47 per cent) and employee expectations (46 per cent). 

“Employers are seeing an increase in regulatory requirements around the globe, which has forced many to act fast and comply with a consistent minimum standard, regardless of location,” Mariann Madden - North America pay equity co-leader at WTW - said. “As a result, we’re seeing employers across North America increase the visibility of pay information as well as provide clarity to employees about their pay. Now is a good time for organizations to review their job and reward structures. A clear, consistent and well-documented pay transparency strategy will ensure accurate pay information is shared with both job candidates and employees.” 

WTW found that more than half of North American employers (56 per cent) are establishing metrics to assess the impact of their pay transparency strategy, regardless of legislation. Employers are evaluating employee retention (40 per cent), questions received from employees (37 per cent) and managers (37 per cent), and the change in gender pay gap (36 per cent). 

“There has been a step-change in pay transparency as more organizations choose to be open about their pay structures and practices,” Lindsay Wiggins - North America pay equity co-leader at WTW - said. “We see that employers are still wary of their employees’ reactions.

"The increase in transparency raises questions and comparisons between job postings for prospective employees and how they stack up with internal salaries and has the potential to surface many of the inequities that have resulted from a recent emphasis on hiring people higher in the range and salary compression for existing employees. By strengthening pay policies and HR/manager guidance to support pay decisions upon hire, for a promotion and during the annual review cycles, employers can reduce the risk of pay inequity.”

Source: HR Today

(Quotes via original reporting)