Increased transparency sparks anticipation of more employee questions and salary negotiations
LONDON, September 18, 2024 — The majority of European organisations are planning to put more pay information into the hands of 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 are leading European employers to increase transparency on pay for employees, with regulatory requirements being the most common driver (69%). Other commonly cited factors include: company values and culture (52%), and employee expectations (47%).
The survey found that providing employees with more detail on their job level, how their base pay is determined, and what their variable pay opportunities are it is likely to become increasingly prevalent. Seven in ten respondents say they are already communicating these or are considering doing so. It is also likely to become typical practice for employers to tell employees the pay range for their job and/ or indicate where they sit in the pay range, with at least six in ten respondents indicating they are already doing this or considering doing.
When it comes to job candidates, increased transparency is also on the agenda. According to the survey, two-thirds (65%) of European respondents are already providing or considering providing the pay rate or range for the job to all candidates in locations, whether or not required by local regulations.
While progress in pay transparency is being made, employers still fear repercussions. Most employers expect more questions about compensation from employees (75%) and managers (67%). Employers also anticipate more requests for pay negotiations (60%) and off-cycle pay changes for existing employees (46%).
The survey reveals, that in reality, most questions come from employees and focus on how an individual’s pay aligns with the organisation’s pay programmes, which includes pay positioning (80%), pay management (62%), visibility (46%) and compensation programme terminology (43%).
“A step-change in pay transparency is coming and it is to be welcomed. Being paid fairly is fundamentally important to employees. In our experience, greater transparency increases employees’ confidence in pay, despite employers’ concerns” said Tamsin Sridhara, Global Pay Equity leader, WTW. “However, employers must be prepared. They need to be confident that their rewards programmes are working as intended and they can explain clearly to employees where and how their pay may differ to others.”
WTW’s 2024 Pay Transparency Survey was conducted in June 2024. In Europe 771 respondents completed the survey. Globally, 1,674 respondents completed the survey.
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