Introducing The Compversation
The field of compensation is undergoing a massive upheaval — and we need to be prepared.
I’ve been working in this field for nearly 15 years. Having seen the world of compensation and benefits up close for all this time, it's clear to me that the upcoming changes will deeply impact the daily operations of HR departments.
Here’s the thing: in most companies, compensation remains a black box. And this lack of transparency often leads to inconsistencies. Inequalities, whether internal or compared to the market, are more likely to go unnoticed when compensation information is kept secret. But things are changing: the era of equity and transparency has arrived.
The problem? Businesses both small and large are struggling to adapt. My peers in compensation and benefits have a lot of questions, and are facing an increasing amount of uncertainty. The only way forward is to start talking about compensation. So, let’s talk.
From the era of secrecy to the era of transparency
The upheaval that compensation and benefits leaders are facing isn’t just a theoretical one — it’s enshrined in law. The movement began in the United States towards the end of 2022, when the state of California and the city of New York became the first to adopt local pay transparency laws. In Europe, the new Pay Transparency Directive was approved in 2023, and will come into effect across the EU by 2026.
These regulatory changes confirm that a paradigm shift is underway. The world is moving towards more transparency in all areas, not just compensation. That’s thanks to an explosion in data that has ushered in the era of the informed citizen. The general public now has access to the detailed information they need to monitor major economic, political, ecological, and health issues at both the national and global levels.
Today, not knowing is no longer acceptable. At the same time, societal inequalities — including between men and women — are getting harder and harder to justify. There’s no going back, and that’s a good thing.
Of course, these significant changes can be seen at the company level. Candidates, employees, and managers now openly ask questions about their pay — and no longer accept vague answers or platitudes in response. The culture of secrecy and confidentiality that has always surrounded compensation is breaking down before our very eyes.
Salary is no longer something that’s only discussed awkwardly and haltingly in the privacy of a manager’s office. These days, we talk about it openly. And if that makes leaders uncomfortable, so be it.
Enter: compensation and benefits
Compensation and benefits pros now find themselves thrust into the centre of this great debate. Quite the irony for a historically technical and confidential role, with little interaction with others.
Comp & Ben is one of the most analytical roles within the HR team. Those of us who chose this field did so because we’re comfortable with data and like working with numbers. We never wanted to be in the spotlight.
But today, everyone is looking at us. Leaders expect us to guide them through this massive paradigm shift. Recruiters turn to us to address challenges with employer branding in a world where the promise of a ‘competitive’ salary is no longer enough.
And HR teams need us to help justify perceived inequalities spotted by employees. Our role is evolving to include communication, information, and training. And effective change management will be needed to manage this transition.
The urgency is apparent: these changes to the world of compensation will happen, whether we like it or not. If we don’t prepare for what’s coming — or better yet, get ahead of it — we’ll be in trouble.
In this, all employers are in the same boat, from huge enterprises to tech scaleups. The data shows that, contrary to popular belief, young tech companies are no more egalitarian than large, traditional corporations.
Starting the conversation about compensation
Despite the difficulties on the horizon, let’s not forget what this revolution will mean for the society of tomorrow: a world of fairer compensation. If we work together, we’ll be able to adjust to these new requirements and welcome this new era.
However, as compensation and benefits leaders, we often feel isolated within our own organisations, unsure of what our peers in other companies are doing to adapt. What we truly need is a clear, transparent conversation where we can honestly address the issues we’re all facing — and ultimately have a positive impact on the world of compensation as a whole.
That’s why I’ve launched The Compversation, a newsletter that aims to unite our community around these common challenges.
Bonus
As part of this newsletter, I’ll share content about compensation and pay transparency that I’ve found interesting since the last edition Here’s what I’ve been reading lately:
Why do corporate pay practices feel broken? Because they are - Josh Bersin - Joshbersin.com
In May 2023, Josh Bersin took a deep dive into corporate compensation policies. His finding: a huge inconsistency between the urgency of the issue and the way it’s currently being handled.
According to Bersin, most large companies have not taken recent (and not-so-recent) social changes into account and continue to pay their people according to principles set in the 1930s. This article is an urgent call for more innovation in the field. I agree that innovation is much needed — indeed, creating a favorable environment for innovation is part of the reason I’m launching this newsletter.
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