Pay Equality is Top Pay Challenge for European Employers

Research from SD Worx finds that 29% of organisations are actively working to improve pay equality, while four in 10 have no plans to tackle inequalities.

By Maggie Mancini

Over a third of European employers (36%) consider internal equity within the organisation to be their biggest pay challenge, according to research from SD Worx, an HR service provider. The study of more than 5,000 companies and 18,000 employees in 18 European countries finds that 29% are actively working to improve pay equality, and 31% say they have specific plans to do so in the future.  

On the other hand, four in 10 employers currently have no plans to tackle pay inequality. While internal inequality is the biggest challenge cited by European employers, pay transparency is the second largest challenge for employers (35%). Currently, 41% of employers do not yet have any specific improvements on the agenda in this regard. More than a quarter (28%) of European employers are actively increasing pay transparency, while a third (32%) have plans to do so.  

Nearly half (42%) believe their organisation strives for full pay transparency to make sure that all staff salaries are not shrouded in secrecy. The U.K. (58%), Spain (57%), and Romania (53%), in particular, are leading the way. However, about three in 10 employers (29%) are not aware of the legal rules surrounding pay transparency.  

Additionally, one-third of employers are seeing challenges in promoting the financial well-being of their staff and reducing financial stress. European employees indicate that a fixed pay increase (44%), variable pay increase (40%), and additional benefits such as health insurance, pension schemes, or paid daytime childcare (35%) are the most common initiatives to tackle this issue. The study also finds that 28% of employers see the pressure on wage costs as a challenge.  

Communication about their pay policy (26%) rounds out the top five challenges for employers. Three in 10 employers actively communicate or report on their remuneration policy. They do this primarily by having individual conversations with employees about their remuneration (32%) or through official internal communication channels (22%). However, 29% say they do not send out specific communications about their remuneration policy. As a result, 59% of European employees feel insufficiently informed about what their pay package entails. 

Meanwhile, 21% of European employers consider a strategic reward policy and the financial well-being of staff to be one of the most important HR challenges in the current period. This represents a slight decrease compared to three years ago (24%).