Dive Brief:
- Most U.S. employers are communicating pay program information to employees in a move that is especially driven by changing regulatory requirements, according to the results of a recent WTW survey.
- Of the 448 U.S. respondents, 6 in 10 disclosed job levels and 48% communicated how individual base pay is determined. Just over one-third of employers disclosed pay ranges, but 46% were planning or considering doing so in the future, WTW said. Regulatory requirements were the most commonly cited factor for transparency, ahead of values, culture, employee expectations and other policies.
- Creating visibility may lead to even more work, as 50% of respondents said they expected more questions from current employees as a result of communicating pay rates or ranges. Managerial training is one consideration; while managers were the most common channel for pay program information, only 38% of respondents said they were effective at training managers about pay.
Dive Insight:
In spite of the proliferation of pay transparency laws in recent years, the subject is not solely a matter of compliance for employers.
Employees largely value pay transparency and hope to work for employers that oblige, according to a Randstad survey published this month. The firm found that 70% of U.S. worker respondents were more likely to apply for a job for which pay or pay ranges were readily available. That included more than 80% of workers ages 18 to 24.
Current employees, too, are likely to bring pay to the forefront of in-house discussions in the near future. Recent data from Robert Half showed that about two-thirds of workers planned to ask for a raise before the end of 2023. Relatedly, Randstad’s survey found that 68% of workers would request a raise if they knew their co-workers in similar roles were making more than them.
Aside from worker sentiment, employers also may seek pay transparency to address equity concerns. January research by WorldatWork and Fidelity Investments found that 70% of organizations took steps to address pay equity in 2022.
More than one-third of employers in WTW’s survey said that they were communicating or had planned to communicate a public pay equity commitment. “Pay equity and transparency are closely linked,” Mariann Madden, WTW’s North America fair pay co-lead, said in the firm’s press release. “It will be very difficult to have confidence in one without the other in place.”
Transparency is just one piece of the pay equity puzzle, however, and multiple factors may account for gaps between employees.
