Transparency (in compensation) was a big buzzword of 2022. Moving forward, this trend of more transparency from employers isn’t going anywhere in 2023 and beyond.
With Europe setting legislation behind the United States, it gives us the benefit of being able to learn & not repeat some mistakes made.
Keep reading to get the 3 key takeaways we can get from the transparency law rollouts from across the ocean…
What happened to the US and what can we prepare for in the EU?
Salary bands are more important than ever
One of the main goals behind pay transparency legislation is to give potential applicants insight into what they may be offered before applying for a position and allows them to make informed decisions about where they should apply.
However, if you haven’t already seen it on your feed or in the news. There are quite a few companies who are not strictly following guidelines.
And now? Companies who put in minimal effort to these regulations are being called out.
If you do the lazy way out by not creating realistic salary bands, you can expect some painful results.
- Ouch for not planning ahead and implementing salary bands for all your positions.
- Double ouch for losing out on great candidates.
- Triple ouch for your company branding and reputation.
We know that defining and keeping salary bands up-to-date are common HR challenges. But having them structured and up and running can definitely help plan and communicate about compensation.
At Figures, we’re aiming to continue building the best compensation platform to help you drive fair pay. And guess what? Managing Salary Bands directly in Figures in next on our list. Sign up to the waitlist to get early access.
Chaos is coming: rollout is NOT smooth or uniform
Did someone say legal headache? What about speculation? Delays, delays, delays…
What we saw was companies with multiple offices in multiple regions with different rules.
Prepare your team internally for being adaptable, ensure that everyone is on the same page, and provide support, it's going to be a wild ride.
Remember: even if the regulation seems lax, by not putting out your very best transparent ranges or salaries, you can hurt yourself in the long run.
It’s never too early to get your ducks in a row
Remember even though these regulations won’t officially come into place until 2024 (tentatively), that isn’t very much time to evaluate & restructure your entire compensation strategy.
BEFORE regulations come into place ensure that you have the following ready to go:
“The biggest warning I have is making sure you understand your pay practices and know how to explain them. This is one of those issues that’s not going away.” – Andrew Turnbull, partner at law firm Morrison Foerster
And where can you get that reliable data?
By using a compensation benchmarking platform.
What we saw in the US was a rush of companies running to strategize and better manage their compensation decisions using real-time market data.
Luckily we have just the tool for that, get in touch with our team today to learn how Figures can provide you with real-time market data to make informed compensation decisions.
What else is in the EU Pay Transparency Series?
- Does transparency really end the gender pay gap?
- Everything you need to know about the new EU Pay Transparency directive
Looking for more resources, tools and content?
That's why we created Figures, you don't need to be a compensation expert, we are. With our an all-in-one compensation platform updated in real-time, expert HR and People insights, we want to make your job more efficient and power more fair decisions.
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- Learn more about compensation and best practices on our blog
- Check out our product tutorials on YouTube
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