LONDON, October 12, 2023 – Pay transparency in the UK is increasing and is being driven by a combination of factors, such as company values and culture (55%), employee expectations (56%) and an environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) agenda (56%). That’s according to the latest Pay Transparency survey by WTW (NASDAQ:WTW), a leading global advisory and broking solutions company.
As most companies are planning to take a global approach to communicating pay information, the survey suggests that the UK might be indirectly impacted by increased legislation around the world, as 62% of UK companies have stated that regulatory requirements are a driving factor for increased pay transparency.
However, barriers to pay transparency remain as employers fear increasing questions and are concerned about their effectiveness in educating their workforce on this complex topic. In fact, almost half of UK organisations (45%) are concerned that their pay programs are not ready yet.
The survey found most UK organisations are communicating different components of their pay program information to employees. Over half (54%) are disclosing job levels to their employees and two-fifths (43%) are communicating how individual base pay is determined and progresses. Nearly one in six companies (16%) are disclosing individual pay ranges to employees, but an even larger number (54%) are planning or considering doing so in the future.
“We’re seeing a real step change around the world in relation to pay transparency. This can be vastly attributed to the increased level of legislation that has come into force globally, which is further expanding on an ongoing basis.” says Eva Jesmiatka, Europe Lead on Pay & Career Equity at WTW. “However, we’re also seeing that companies have made pay equity and transparency a top priority as part of their intent to operate as a responsible employer. Boards of Directors have taken responsibility for pay equity and transparency matters and are looking for organisations to define, monitor and report on their commitments.”
The survey found 44% of UK employers are already communicating or planning to publicly communicate a pay equity commitment. A smaller number have communicated their pay transparency commitment, however 52% of companies are planning or considering what they will share.
Although the UK will not be impacted by the EU Pay Transparency Directive, which will require companies in the EU to make pay rate information available to job applicants, UK applicants can expect to have more insights around pay rates for roles. In the UK, currently only 10% of companies communicate pay rate information to external candidates as part of the recruitment process, yet two thirds of companies (60%) are planning or considering communicating this information, indicating further progress to achieving pay transparency.
Over half (58%) of employers believe communicating pay rates or ranges will increase questions from current employees, while around half of those already communicating have reported seeing increased questions from these groups. Manager effectiveness concerns are also top of mind for employers (50%). Indeed, although managers are the most common channel for communicating pay program information (72%), only 38% of organisations report being effective at educating managers about this complex topic. Additionally, only 13% of companies feel they are effective at educating employees on pay.
“As employees or job seekers, long-established norms of how we talk about pay with our employers are about to be blown out of the water. We are working with companies across every industry sector to think about their roadmap to pay equity and transparency, the different stakeholder involved in pay decisions and the education they need, and the experience between a manager and an employee when holding more open, data-led conversations about pay.” said Tom Wooldridge, Employee Experience Director at WTW. “
“Organisations also need to get their house in order by developing and actively managing foundational job architecture and leveling frameworks and conduct equal pay, pay gap and pay driver analyses to uncover and address areas of risk. Understanding their current state will support businesses in their efforts to towards addressing the various legislative requirements but also in providing greater transparency into their talent and rewards programs and practices.”
“We’re also seeing that companies have made pay equity and transparency a top priority as part of their intent to operate as a responsible employer.”
Eva Jesmiatka | Europe Lead on Pay & Career Equity at WTW
WTW’s 2023 Pay Transparency Survey was conducted in July 2023. In the UK, a total of 205 respondents completed the survey. Globally, a total of 1313 respondents completed the survey.
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