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Picture the scene. It’s lunchtime and a group of co-workers are sitting with each other in the office canteen. Maybe they’re talking about the latest reality TV programme, how close it is to someone’s wedding or even chatting about the weather. You can guarantee they won’t be discussing how much they earn – can you imagine if they did?
Unequal pay is one of the main factors to impact inequality in the workplace. But looking further afield, what if you suspect that the company you work for pays a lot less than its competitors? Believing there is a pay discrepancy will only ever result in disgruntled employees who feel no loyalty.
Salary Transparency – good or bad idea
The biggest benefit for companies who decide to go transparent is that they gain trust. Employees who understand that they are treated equally will also trust their fellow co-workers, it will lead to high retention, a good mix of diversity and drive a positive and healthy workplace culture.
Companies who share this information may also run the risk of some employees feeling jealous. ‘Why should I work as hard as they do, they earn more than me?’ When in reality the other person gets paid more because they have responsibilities that not everyone is aware of.
With that negative in mind, it may be more fitting for businesses to explain exactly how pay is determined without having to reveal any figures.
Fact of the day: For those living in Sweden, Finland or Norway salary transparency is normal. In these countries anyone can find out someone else’s salary by calling the tax authority.
Salary benchmarking gives an accurate, impartial idea of pay, benefits and rewards taking into consideration the company’s sector. This information is then used to allow the leadership team to make informed remuneration decisions.
Benchmarking goes further than just looking at the salary, it considers other factors including bonuses, pension and incentive strategies. People aren’t solely attracted by the take-home pay anymore – they want a complete package.
Successful, effective salary benchmarking can help retain staff as it reduces the risk of losing employees to competitor businesses who pay more for doing the same role.
Stamping out the Gender Pay Gap
According to the Office of National Statistics men earned just over 18% more than women in April 2018 across the UK. The same findings in 1997 revealed that men were earning 27.5% more than women for that year. Business are heading in the right direction but it’s fair to say that there is still work to be done to improve this.
Under a new legal requirement, UK companies employing more than 250 staff have to publish their gender pay gap, it is voluntary for those employing less than this figure. The first set of figures were submitted in April 2018. Eventually all of this data will be available on a government database ‘Search Gender Pay Gap Data’ – that’ll make interesting reading!
Recruitment, Salary & Incentives
We’ve said it so many times before, but it is so true – today’s workplace is extremely competitive, and companies need to stay one step ahead to attract and retain talented staff.
Let’s look at some possible ways to appear open and honest with your workforce to encourage fairness and equality; most of them start with your incentive strategy:
If you want more information on any of the issues raised in our blog please get in touch by calling us on 0161 941 2426.
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