Employers Making Progress on Pay Transparency

Driven by new requirements and regulations—as well as growing calls from employees—most North American organizations have put pay transparency strategies in place.

That’s according to the WTW 2024 Pay Transparency Survey, which found that those strategies include assessing job and pay structures, evaluating pay policies and practices, conducting pay gap and pay equity analytics, and preparing for increased pay communication and education among all stakeholders.

Most employers said they have implemented measures for communicating topics related to job levels (cited by 74% of companies), how individual base pay is determined (65%), and variable pay opportunities (58%).

The report found that employers are also sharing pay ranges with job candidates, with the majority of organizations communicating the hiring rate or range for jobs to both their external candidates (75%) and their internal candidates (69%). For organizations with operations in North America that are already communicating this pay information, most (86% in the U.S. and 58% in Canada) are doing so across the entire country or region regardless of the state or provincial regulations, WTW found.

Regulatory requirements are the main factor driving employers to make changes regarding pay transparency (cited by 70% of WTW respondents), and for good reason: Numerous states now have laws requiring some kind of pay transparency, such as including pay ranges in job postings. Meanwhile, WTW found, 47% of employers cited company values and culture, and 46% cited employee expectations as reasons for being more transparent about pay.

“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 at 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.”

WTW’s findings are the latest to find movement among employers regarding pay transparency and pay equity.

Payscale earlier this year found that the majority of organizations (60%) are publishing pay ranges in job postings in 2024, compared to 45% in 2023. 

Meanwhile, nearly three-quarters of employers (70%) said they have analyzed their compensation strategies and shared existing gender pay gap statistics with employees and/or external stakeholders, according to a recent report from compensation firm beqom.

That has led to a number of problems being uncovered, according to beqom’s survey of 875 salary and compensation decision-makers in the U.S. and the U.K., including wage discrimination (cited by 64% of respondents), promotion disparities (57%), below-market salary ranges (54%), pay compression (53%), and gender pay gaps (48%). In response to some of the pay problems most companies uncovered, they have reported taking steps to close existing wage gaps and foster transparency, the beqom report found.

More Work to Be Done

Not having a pay transparency and pay equity strategy in place can prove to be problematic, experts said.

“Companies without a pay equity strategy are exposed to significant risks, including legal repercussions, challenges in attracting and retaining talent, and a weakened employer value proposition,” Jeremy Feinstein, managing director at Empsight, a New York City-based human resource consulting firm specializing in compensation, told SHRM earlier this year.

Although many organizations have made progress in the past couple of years, there is still work to be done.

“Now is a good time for organizations to review their job and reward structures,” Madden said. “A clear, consistent, and well-documented pay transparency strategy will ensure accurate pay information is shared with both job candidates and employees.”