North American companies are largely transparent about pay — thanks largely to regulators, WTW finds

Brief description of the dive:

• Most of the more than 500 North American employers surveyed by WTW introduce the principles of pay transparency This is partly due to tightening regulatory requirements around the world, according to a study released on Wednesday that will increase pay transparency in 2024.
• More than half of respondents had implemented measures such as providing information about job levels and variable pay opportunities, as well as disclosing how individual base pay is determined. Most organizations shared salary range information with both external and internal job candidates, although external candidates were more likely to receive this information.
• More than 70% of employers said regulatory requirements were driving their pay transparency programs, while 47% cited trust in company values ​​and culture and 46% employee expectations. Commonly cited risks to pay transparency included increased pay inquiries, requests for salary negotiations, and requests for off-cycle salary changes.

Diving Insight:

The WTW findings are the latest indication that pay policies are moving towards greater transparency. Earlier this year, a Payscale report found that 60% of surveyed employers publishing salary ranges in job advertisementscompared with 45% a year earlier. More than half in the same report also said they trained managers on pay communications.

It is not surprising that regulatory changes are driving this trend, as jurisdictions in 15 different states and the District of Columbia, require some form of salary disclosure by employers, from including salary or salary ranges in job advertisements to providing salary information if an employee asks for it. The regulations could have an impact on increasing transparency for employers even if the employer is not nearby in a state where the principle of transparency applies, according to a new report by the National Women’s Law Center.

Regulatory pressure has also been reflected in the collection of payroll data by government agencies, primarily in states such as California AND Illinois. Both states now require some companies to include pay information in reports to state law enforcement agencies. Such requirements could soon return at the federal level; the U.S. Equal Employment Opportunity Commission said in July it was reconsidering collecting salary data from employersover five years since he last did so.

“Now is a great time for organizations to review their work and compensation structures,” said Mariann Madden, co-leader of North American pay equity at WTW, in a company press release. “A clear, consistent, and well-documented pay transparency strategy will ensure accurate compensation information is shared with job candidates and employees alike.”

The WTW report noted that employee questions about pay often revolve around how an individual’s pay aligns with the organization’s compensation programs. Lindsay Wiggins, also co-leader of North America pay equity for the company, said in a press release that current employees may be particularly concerned about how their salaries compare to those offered to potential candidates. Wiggins said that can expose pay inequality.

The pay gap has proven persistent, even as employers, employee advocates and government officials increasingly focus on the issue. Last month, a report from The Josh Bersin Co. found that women in the U.S. still earn less than 15% less than men on average, meaning the gender pay gap in the country is It is unlikely to be closed before the end of the 2040s..