A survey by WTW has found 86 per cent of organisations in Europe say they’ve increased communication around pay programs because it’s part of their company values and culture. While other factors such as confidence in pay programmes (79 per cent) and employee expectations (77 per cent) have also driven companies to become more open around the topic of pay.
The company’s 2022 Pay Clarity Survey was conducted in August 2022 and involved 63 organisations across Europe. The survey found Increasing regulatory requirements and ESG agendas are also leading companies to become more transparent around pay, as 72 per cent of companies attribute the rise to regulations and 51 per cent due to ESG.
But many organisations are apprehensive to share more information around pay, as 59 per cent of companies fear possible employee reactions. In addition, more than a third of companies (38 per cent) have legal concerns about oversharing pay information, while almost a quarter (23 per cent) hold back due to administrative complexity.
Yet, organisations that have decided to disclose pay rates – in line with new US regulations – are seeing less negotiation (57 per cent) and fewer questions (50 per cent) on pay from prospective employees. However, more than half of companies (57 per cent) have noted that it is resulting in more questions from existing employees.
Most European companies are already communicating or plan to communicate job levels (87 per cent), variable pay opportunities (68 per cent) and how base pay is determined (59 per cent). This is predominantly communicated via management, while 64 per cent of companies are using webinars or HR portals (56 per cent) to share this information.
While, three in ten organisations across Europe (31 per cent) are currently disclosing the adjusted pay gap locally, with a similar percentage planning to do so in the future (31 per cent). Yet two thirds of companies (68 per cent) are only sharing data that is required by local regulation. And when it comes to global organisations, almost all (95 per cent) are planning to provide a narrative on their approach to managing pay equity.
Eva Jesmiatka, Europe Lead on Pay and Career Equity at WTW, said: “With North America announcing new regulations around disclosing pay range information to prospective employees and with European companies doing more to share their fair pay ambitions, it’s likely that openness around pay will only accelerate.
“Employees’ expectations are growing, they expect transparency and actions that align with the values that are being communicated, which is why openness around topics such as pay and career equity are becoming increasingly important.”
