At a time when pay transparency feels more important than ever, Innecto’s team of consultants is focusing on how building the right frameworks and structures plays a fundamental role in supporting Pay Transparency and Pay Equity. In the first two of our four-part series our Director of Business Innovation and Senior Principal Consultant, Sarah Lardner, outlined the ramifications of the EU Pay Transparency Directive and examined what Pay Transparency means to employers in the UK. Now, we look at the steps companies can take to prepare and transition towards transparency.
If carefully planned for and successfully implemented, Pay Transparency can address and tackle actual pay disparity and support the transition towards a fairer and more equal environment leading to a more inclusive workplace. However, it can only be achieved if the right groundwork has been done, and structures exist.
Laying strong Foundations
- Employers need to carefully assess their current situation and be brave enough to challenge themselves to look beyond their current set-up
- HR should talk with leadership to gauge the company’s willingness to question current practices around pay decisions and job evaluation methods
- Some companies may need external help doing this – we are currently helping a large global airline transition through this process
- As part of this ‘opening up’ process, you should empower managers and employees to provide feedback on current practices around pay decisions, recruitment and retention.
- Use this information to gauge how important a greater sense of openness and actual pay transparency would be for employees at each level of the business.
Once this important preliminary work is done, we work through five key steps on the road to Pay Transparency.
- Job Evaluation, Pay Grading and Setting
- Employer has a grading system such as job evaluation to determine roles at similar levels
- This framework is linked to a pay structure
- Staff understand how roles are evaluated
- Company publishes statutory pay gap and provides broad guidance on how pay is determined
We can use our bespoke job levelling tool Evaluate to help >>
- Pay Frameworks and basic employer knowledge
- Employer has a basic pay framework outlining details on pay bands and points
- Details are published, for example in job adverts
- Staff have a limited understanding of how their pay is determined and how they can progress
- Salary Benchmarking - data-led market comparison
- Employer can benchmark salaries against relevant external market data
- Carries out equal pay analysis
- Can justify any differences in pay and take action to address variances
We can use our bespoke tool PayLab to help >>
- Communication around career progression
- Employer communicates clear career progression pathway to staff
- Employees therefore understand how pay is determined and their options for progression within the company
- Pay structures are used to provide flexibility, underpinned by robust market data
- Achieving Pay Equity – Clear Education and Articulation
- Employer provides pro-active education to managers and employees on how pay is determined
- Pay progression and pay review processes are transparent for the whole organisation
- Culturally, the organisation moves towards transparent conversations around pay and overall equity
We can use our bespoke Pay Review tool Advance to help >>
If you are unsure where your journey might start and end, Innecto can help navigate that journey. Starting with our Transparency Readiness Assessment we will help identify your current position and internal appetite to identify the steps required. Please get in touch with Sarah.Lardner@innecto.com for information about an assessment and action plan.
Coming soon: in part 4 of our Pay Transparency series we look in greater detail at the processes and related digital platforms aiding us in the process towards Pay Transparency.
