A recent WTW survey reveals that more than one-third of companies are disclosing pay ranges and more plan to do so, largely in response to state regulatory requirements enacted in recent years.
By Maggie Mancini
As state governments across the United States push for organizations to provide pay information to employees, WTW’s 2023 Pay Transparency Survey finds that most companies are following suit. While these regulatory requirements have pushed companies toward pay transparency, barriers remain as organizations fear increasing questions and concerns about their effectiveness at educating their workforce on the topic.
The survey finds that 58% of U.S. companies are disclosing job levels to their employees and 48% are communicating how individual base pay is determined and progresses. More than one-third (36%) of companies are disclosing individual pay ranges to employees, but an even larger number (46%) are planning to do so in the future.
“The time is now to get your house in order and do so by developing and actively managing the foundational job frameworks used to define and organize jobs with your organization,” urges Mariann Madden, North American fair pay co-lead of WTW. “Assess your pay structures and their ability to provide competitive pay opportunities but also serve as the basis for what will be shared in job postings.”
While 81% of companies have cited regulatory requirements as the main driver of increasing pay program communication, other commonly cited factors include company values and culture (55%), employee expectations (54%), and environmental, social, and governance and DEI (53%).
The survey finds that 38% of employers are publicly communicating—or planning to publicly communicate—commitments to pay equity. A smaller number have communicated their pay transparency commitment, though 44% of companies are planning or considering what they will share.
As more parts of the country anticipate disclosure of pay ranges, job levels, and other information, Madden says that providing education and resources to both leaders and employees is important.
“Don’t rely on your managers to be your only compensation educators for employees,” Madden says. “Employ different types of learning to allow employees to understand how their pay works and the increased information available to them.”
Though regulatory requirements are driving more companies to communicate pay information, mandates have been enacted in less than 10 states. For prospective employees, nearly two in five companies are communicating or planning to communicate pay ranges regardless of requirements.
Of the 91% of companies communicating or planning to communicate pay ranges, 65% are disclosing a hiring range for the job. Most organizations are using a consistent approach to what is shared and what pay range is disclosed.
The popularity of flexible and remote working options has contributed to this push for pay transparency. Many of the regulatory requirements include provisions mandating that companies offering roles that could be performed in their state or that report to people working in their state must also include pay ranges in job postings.
“This requirement has caused organizations to then include pay ranges for any remote job posting, regardless of the U.S. location or compliance obligations,” Madden says.
Half of employers believe communicating pay ranges will bring questions from employees. Manager effectiveness concerns are also top of mind for 47% of employers, the survey finds. Although managers are the most common channel for communicating pay program information, only 38% of organizations report being effective at educating managers about this topic.
When working to eliminate barriers to improving pay transparency, Madden recommends that companies be confident in their ability to provide and deliver consistent and fair pay to prospective employees.
“You can leverage your job and pay structures to develop education and training for everyone in your organization,” Madden explains. “Often, organizations focus on leadership education, but our survey found that managers are the most common method used for communicating pay. So, it is imperative that this key group of stakeholders isn’t left behind and feel supported in their conversations with employees.”