The case for pay transparency 

09 January 2023

Why sharing more is critical to an elevated employee experience

According to WorldatWork’s 2020 Pay Transparency Study, 67% of organizations in 2020 now view pay transparency as increasingly important. However, the report, which was conducted with underwriting support by Mercer, shows that only 14% of organizations are giving pay transparency more than a “moderate” level of attention.

This disconnect between acknowledgement and action provides an opportunity for organizations. Given the “new normal” of pay transparency in modern business, now is the time to go one step further and put your pay transparency story into action in a way that impacts employee experience.

The business case for pay transparency covers three distinct areas:

  • Legal compliance:

    Pay transparency is a legal compliance issue in an increasing number of states, and companies must remain aware of the law.
  • Employee experience:

    A culture of transparency drives better workforce outcomes.
  • Pay equity:

    Pay transparency, when coupled with robust analytics, can support fairer pay equity outcomes.
Yet, despite these clear advantages, pay transparency isn’t always culturally easy for companies. In fact, it can often be quite structurally difficult. In order to continue to attract and keep top talent — and remain compliant with increasing legislation in this area — companies must take the necessary steps to create organizational transparency through process and culture change.

Download this article to better understand:

  • The difference between pay equity and pay transparency
  • The expanded business case for pay transparency
  • Three typical barriers to pay transparency (and how to start overcoming them)
  • A roadmap for organizational pay transparency

Pay transparency during Covid-19

With COVID-19 shaping the interim norm for companies in 2020, many organizations have become more transparent about their pay practices in response to the global pandemic. Pay practice responses vary by company type and industry – for example, essential stores such as grocery stores have increased hourly wages, while some retailers whose storefronts have closed are implementing tiered pay cuts depending on job level. The table gives some examples of how companies immediately and transparently communicated pay actions.
About the author(s)
Tauseef Rahman

Partner, Career

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