Our 2023 Pay Transparency Survey reveals that employee reactions and concerns about manager effectiveness were two of the biggest factors holding back organisations from providing increased pay transparency.
Two-thirds of respondents believe increased communications will raise questions from employees and managers – a fair conclusion. New information and data will generate a reaction from your people based on connections they make between the data and their own personal circumstances. Even in a best-case scenario where pay is consistently determined by a set of objective criteria and all roles are paid within a competitive range, subjectivity can creep in. After all, how many of us believe we perform above and beyond the requirements of our role?
70% of organisations are planning to communicate pay ranges on an individual basis
But sidestepping seemingly difficult conversations on pay is no longer an option. Our survey findings suggest that, globally, more than 70% of organisations are planning to communicate pay ranges on an individual basis (if they aren’t already). The demand for pay transparency is accelerating due to evolving global legislation alongside talent, shareholder, and consumer expectations.
The question is not if, but how will you prepare for greater pay transparency.
Better, more transparent pay conversations start here:
The fact is you will have to put more pay program information in your employees’ hands. We recommend the following steps to ensure your leaders are prepared and you’ve thought through the questions and reactions employees will have when processing this new information.
The first thing to do is evaluate what’s in place currently wherever you operate, the extent to which it’s adopted in different local markets, changes you are looking to make, risks or issues associated with your ambitions, and how you'll measure success.
How is your pay story told? Are all aspects of reward understood? Is there a common language for how work is defined? Do you already communicate broad pay ranges? Does that differ across different businesses or legacy organisations? Are you making changes to pay in support of your ambitions for pay equity? Do you have ambitions to be fully transparent on pay?
Gather different perspectives - leadership, HR and managers - and deliver a full evaluation of where you’re starting from and what you need to move towards.
Listen to employee opinions about pay to learn whether there is trust, how pay is perceived to be managed, and how career growth is supported. It will help you practically plan where to focus your time and energy.
Consider physical barriers to conversations like where employees are located, their ability to access education/resources on pay and how your approach to communication might need to vary depending on their needs.
Think about cultural barriers to conversations on pay. Cultural norms about pay often transcend corporate values and culture – they can be generational, gendered, and even vary by norms across different countries and ethnic groups. For many organisations, this will transform the culture of pay and how it is approached and discussed. Getting that transition right will be a crucial part of the process and understanding barriers to that will be critical.
There are so many people involved in making pay equity and pay transparency a reality within an organisation. Aligning their roles from the outset will help you prepare to support them effectively.
Broadly, you need to identify stakeholders who are responsible for preparing the organisation (HRIS, local rewards teams, employee relations, leadership, finance, and other corporate functions) as well as stakeholders who are responsible for delivering pay processes or conversations (local leaders, HR business partners, managers, and so on). Identify your stakeholders, define their role, and agree on what support you’ll provide to them in that role.
According to our survey, managers are the most common channel for communicating pay program information across all organisations (and twice as many organisations rely on managers compared to total rewards statements). Despite this heavy reliance on managers, the survey also revealed organisations have not done enough to educate them on how to have these conversations.
Carefully prepare for different reactions employees might have including questions about their position within a salary range and what drives pay differences, pay between the lowest and highest paid roles in an organisation, or even broader conversations about pay like labour market salary inflation vs. consumer goods inflation.
Using the information you’ve gathered on your barriers, stakeholders, and talking points, select the most appropriate channels to support education and engagement on pay. Organisations are increasingly using technology to reduce their reliance on managers alone. A personalized employee experience platform that supports total rewards communications. can provide key talking points for managers and employees can access individual pay data at the touch of a button along with tailored messages (for example, reinforcing why an individual’s salary sits at a particular position in their salary range).
Note, if you’re planning to use technology to communicate individual pay data, factor that in from the beginning. Technology always takes longer than you think and, if you plan properly, won’t be a barrier to when you are ready to communicate.
Many organisations will need help from a partner from start to finish. Choosing an industry expert to work with on pay transparency, both the data analysis and communication, will ensure greater confidence around this changing landscape.
WTW has decades of experience guiding organisations on the best way to approach pay equity and transparency, planning and implementing pay communication strategies, and providing the right tools to complement the organization’s objectives. We cover these priorities through a series of workshops with clients. We gather stakeholders across rewards, HR, diversity equity and inclusion, environmental social and governance and wider leadership teams to ensure they can be confident on pay, and ready for transparency.
Talk to us today about where you are on the journey already, and how we might help you communicate with clarity and confidence on pay.