Global regulatory requirements prompting North American companies to comply with pay transparency, WTW survey finds
19 September 2024 - 1:47AM
The majority of North American organizations are communicating pay
program information to their employees, according to a survey by
leading global advisory, broking and solutions company WTW (NASDAQ:
WTW). The 2024 Pay Transparency Survey found several factors,
including increasing regulatory requirements around the globe such
as the EU Pay Transparency Directive, are encouraging North
American organizations to establish pay transparency strategies.
These strategies 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 communicating job level (74%), variable pay
opportunities (58%) and how individual base pay is determined (65%)
is already typical across the region, with at least 55% of
respondents doing so or planning to do so. Sharing individual
employees’ pay ranges and how pay ranges are determined is also
likely to become prevalent as pay transparency legislation
continues to proliferate across the U.S., Canada and Europe.
When it comes to sharing pay ranges with job candidates, most
organizations are already communicating the hiring rate/range for
jobs to both their external candidates (75%) and internal
candidates (69%). For organizations with operations in North
America that are already communicating information, most (86% in
the U.S. and 58% in Canada) are communicating pay rates or pay
ranges across the entire country or region regardless of the state
or provincial regulations.
According to the survey, regulatory requirements are the most
common driver (73%) of increased communication about pay programs.
Other commonly cited factors include confidence in their company
values and culture (47%) and employee expectations (46%).
“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,” said
Mariann Madden, North America Pay Equity co-leader, WTW. “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.”
While progress in pay transparency is being made, employers
still fear repercussions. Most employers expect more questions
about compensation from employees (72%) and managers (71%).
Employers also anticipate more requests for pay negotiations (57%)
and off-cycle pay changes for existing employees (43%).
The survey reveals, however, that employees’ questions most
often focus on how an individual’s pay aligns with the
organization’s pay programs, which includes pay positioning (80%),
pay management (72%), visibility (56%) and compensation program
terminology (44%).
Regardless of the legislative landscape, over half of North
American employers (56%) are establishing metrics to assess the
impact of their pay transparency strategy. Employers are evaluating
employee retention (40%), questions received from employees (37%)
and managers (37%), and the change in gender pay gap (36%).
“There has been a step-change in pay transparency as more
organizations choose to be open about their pay structures and
practices,” said Lindsay Wiggins, North America Pay Equity
co-leader, WTW. “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.”
About the survey
WTW’s 2024 Pay Transparency Survey was conducted in June 2024.
In North America, 527 respondents completed the survey. Globally,
1,674 respondents completed the survey.
About WTW At WTW (NASDAQ: WTW), we provide
data-driven, insight-led solutions in the areas of people, risk and
capital. Leveraging the global view and local expertise of our
colleagues serving 140 countries and markets, we help organizations
sharpen their strategy, enhance organizational resilience, motivate
their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you. Learn more at wtwco.com.
Media contacts:Ileana
Feoliileana.feoli@wtwco.com
Stacy Bronstein: stacy.bronstein@wtwco.com
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