Most companies not fully there yet on pay transparency

Organizations are under increasing pressure by regulators and workers alike to be more transparent around pay. Yet, just one in five companies globally “consider themselves ready for pay transparency,” according to a new Aon survey.

Seven in 10 of the 1,400 professionals Aon surveyed said their organizations’ readiness around pay transparency—the practice of disclosing employee compensation information—has improved over the past year. In fact, 69% said their companies publish salary ranges while recruiting and 21% said they do this on every job posting.

But organizations know they have more work to do. For instance, just a quarter of North American survey respondents said their organizations were fully ready for pay transparency. Most (59%) respondents said their companies were “getting ready,” while another 16% said they weren’t ready. Respondents in other regions felt even less prepared. Nearly half (48%) of those in the Asia-Pacific region said their companies weren’t ready at all for pay transparency.

“Pay transparency is no longer a buzzword. It's a baseline expectation from employees and a regulatory imperative across an increasing number of jurisdictions,” Lisa Stevens, chief administrative officer at Aon, said in a statement. “Yet our data shows a concerning lack of progress. Organizations that fail to act face risks not only in compliance, but in their ability to attract, retain and engage talent.”

Organizations felt the most pressure on pay transparency from regulators, followed by the need to be more attractive to employees, according to the survey. “Alignment to organization values” was the third-biggest driver of pay transparency.

Square up. Pay equity monitoring appears to be one area with plenty of room for improvement. Just over a quarter of respondents (and 30% in North America) said their orgs conducted a pay equity analysis within the last 12 to 18 months.

The most common methods of correcting pay equity gaps, according to the survey, are additional year-end reviews (28%), a fund to correct discrepancies (24%), and checking at recruitment (22%).