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Dive Brief:
Most of the more than 500 North American employers surveyed by WTW have pay transparency policies in place thanks in part to increased regulatory requirements globally, according to the firm’s 2024 Pay Transparency Survey published Wednesday.
Of the respondents, more than half have implemented measures such as communicating job levels and variable pay opportunities as well as disclosing how individual base pay is determined. Most organizations shared pay range information with both external and internal job candidates, though external candidates were more likely to receive this information.
More than 70% of employers said regulatory requirements drove their pay transparency programs, while 47% cited confidence in their company values and culture and 46% cited employee expectations. Commonly cited pay transparency risks included increased compensation questions, pay negotiation requests and off-cycle pay change requests.
Dive Insight:
WTW’s findings are the latest indicators that pay policies have trended in the direction of greater transparency. Earlier this year, a Payscale report found that 60% of surveyed employers were publishing pay ranges in job advertisements, compared to 45% one year prior. Just over half in the same report also said that they were training managers on pay communications.
That regulatory changes have driven the trend is not surprising as jurisdictions in 15 different states and Washington, D.C., require some form of pay disclosure by employers, ranging from including pay or pay ranges in postings to providing pay information if an employee requests it. The laws may have the effect of increasing employer transparency even when an employer is not located in a state that has mandated transparency, a recent National Women’s Law Center report found.
Regulatory pressure has also come in the form of pay data collection by government agencies, primarily in states like California and Illinois. Both states now require certain businesses to include pay information in reports to state enforcement agencies. Such requirements also may soon return at the federal level; the U.S. Equal Employment Opportunity Commission said in July that it is once again considering collecting pay data from employers, more than five years since it last did so.
“Now is a good time for organizations to review their job and reward structures,” Mariann Madden, WTW’s North America pay equity co-leader, said in the firm’s press release. “A clear, consistent and well-documented pay transparency strategy will ensure accurate pay information is shared with both job candidates and employees.”
WTW’s report noted that employee questions around pay often concern how individual pay aligns with organizational pay programs. Lindsay Wiggins, also a North America pay equity co-leader for the firm, said in the press release that current employees may be specifically concerned about how their salaries stack up to those offered to prospective candidates. Wiggins said that this has the potential to reveal pay inequities.
Pay gaps have proven persistent despite increased focus on the issue from employers, employee advocates and government officials. Last month, a report by The Josh Bersin Co. found that U.S. women still earn less than 15% than men on average, meaning that the country’s gender pay gap is unlikely to close until the late 2040s.
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Publish date : 2024-09-20 09:50:00
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