Global regulatory requirements prompting North American companies to comply with pay transparency, WTW survey finds

Rhea-AI Summary

WTW's 2024 Pay Transparency Survey reveals that most North American companies are increasing pay transparency due to global regulatory requirements. Key findings include:

- 74% communicate job levels, 58% share variable pay opportunities, and 65% explain base pay determination
- 75% share hiring rates/ranges with external candidates, 69% with internal candidates
- 86% of U.S. and 58% of Canadian companies communicate pay info across entire regions
- 73% cite regulatory requirements as the main driver for increased transparency

Employers anticipate more questions about compensation from employees (72%) and managers (71%), as well as increased pay negotiations (57%). To assess impact, 56% of companies are establishing metrics, focusing on employee retention (40%) and questions received (37%).

Increase in transparency sparks anticipation of more employee questions and salary negotiations

NEW YORK, Sept. 18, 2024 (GLOBE NEWSWIRE) -- The majority of North American organizations are communicating pay program information to 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, including increasing regulatory requirements around the globe such as the EU Pay Transparency Directive, are encouraging North American organizations to establish pay transparency strategies. These strategies include assessing their job and pay structures, evaluating their pay policies and practices, conducting pay gap and pay equity analytics, and preparing for increased pay communication and education among all stakeholders.

The survey found communicating job level (74%), variable pay opportunities (58%) and how individual base pay is determined (65%) is already typical across the region, with at least 55% of respondents doing so or planning to do so. Sharing individual employees’ pay ranges and how pay ranges are determined is also likely to become prevalent as pay transparency legislation continues to proliferate across the U.S., Canada and Europe.

When it comes to sharing pay ranges with job candidates, most organizations are already communicating the hiring rate/range for jobs to both their external candidates (75%) and internal candidates (69%). For organizations with operations in North America that are already communicating information, most (86% in the U.S. and 58% in Canada) are communicating pay rates or pay ranges across the entire country or region regardless of the state or provincial regulations.

According to the survey, regulatory requirements are the most common driver (73%) of increased communication about pay programs. Other commonly cited factors include confidence in their company values and culture (47%) and employee expectations (46%).

“Employers are seeing an increase in regulatory requirements around the globe, which has forced many to act fast and comply with a consistent minimum standard, regardless of location,” said Mariann Madden, North America Pay Equity co-leader, WTW. “As a result, we’re seeing employers across North America increase the visibility of pay information as well as provide clarity to employees about their pay. Now is a good time for organizations to review their job and reward structures. A clear, consistent and well-documented pay transparency strategy will ensure accurate pay information is shared with both job candidates and employees.”

While progress in pay transparency is being made, employers still fear repercussions. Most employers expect more questions about compensation from employees (72%) and managers (71%). Employers also anticipate more requests for pay negotiations (57%) and off-cycle pay changes for existing employees (43%).

The survey reveals, however, that employees’ questions most often focus on how an individual’s pay aligns with the organization’s pay programs, which includes pay positioning (80%), pay management (72%), visibility (56%) and compensation program terminology (44%).

Regardless of the legislative landscape, over half of North American employers (56%) are establishing metrics to assess the impact of their pay transparency strategy. Employers are evaluating employee retention (40%), questions received from employees (37%) and managers (37%), and the change in gender pay gap (36%).

“There has been a step-change in pay transparency as more organizations choose to be open about their pay structures and practices,” said Lindsay Wiggins, North America Pay Equity co-leader, WTW. “We see that employers are still wary of their employees’ reactions. The increase in transparency raises questions and comparisons between job postings for prospective employees and how they stack up with internal salaries and has the potential to surface many of the inequities that have resulted from a recent emphasis on hiring people higher in the range and salary compression for existing employees. By strengthening pay policies and HR/manager guidance to support pay decisions upon hire, for a promotion and during the annual review cycles, employers can reduce the risk of pay inequity.”

About the survey

WTW’s 2024 Pay Transparency Survey was conducted in June 2024. In North America, 527 respondents completed the survey. Globally, 1,674 respondents completed the survey.

About WTW

At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

Media contacts:

Ileana Feoli
ileana.feoli@wtwco.com

Stacy Bronstein:
stacy.bronstein@wtwco.com

FAQ

What percentage of North American companies are communicating job level information according to WTW's 2024 Pay Transparency Survey?

According to WTW's 2024 Pay Transparency Survey, 74% of North American companies are communicating job level information to their employees.

How many companies are sharing hiring rates or ranges with external candidates for WTW stock (NASDAQ: WTW)?

The WTW survey found that 75% of organizations are communicating hiring rates or ranges to external job candidates.

What is the main driver for increased pay transparency communication in North American companies, according to the WTW survey?

The WTW survey reveals that regulatory requirements are the most common driver (73%) for increased communication about pay programs in North American companies.

What percentage of employers expect more questions about compensation from employees due to increased pay transparency?

According to the WTW survey, 72% of employers expect more questions about compensation from employees due to increased pay transparency.

How many North American employers are establishing metrics to assess the impact of their pay transparency strategy?

The WTW survey shows that 56% of North American employers are establishing metrics to assess the impact of their pay transparency strategy.