A wave of pay transparency regulations in different parts of the world are expected to go into effect over the next few years, but the majority of employers are unprepared to meet the new requirements.
Around 71% of organizations say their pay transparency readiness has improved over the past year, according to a survey of 1,4000 companies globally from professional services firm Aon. But only 19% of organizations consider themselves ready for pay transparency. Around 26% say they’ve conducted a pay equity analysis in the past 12-18 months, and just 9% have confidence that their managers fully understand pay policies and can discuss compensation effectively.
“Clear, consistent communication and manager training are critical to transparency efforts,” Kelly Voss, head of rewards and career advisory for North America at Aon wrote in a statement accompanying the report. “Without them, even well-intentioned strategies can fall short.”
Pay transparency has slowly been catching on in the U.S. Since the start of this year, Illinois, New Jersey, Vermont, Minnesota, and Massachusetts have joined other states like Colorado, California, New York, and Maryland in mandating pay range disclosures in job postings, among other salary-related provisions, according to ADP. And while North American survey respondents posted the highest percentage of companies who believed they were ready for pay transparency—25%—around 59% of companies said they were still “getting ready,” and 16% said they were not ready.
