At a time when every penny counts and talent goes to the highest bidder, many organisations are struggling with retention.
Helping workers through the cost of living crisis:
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More action needed to address workers' money worries
Beqom’s recent research has revealed that workers often struggle to decipher their salaries independently and are seeking a clear explanation from their employer.
In a wake-up call to HR directors, more than half (57%) of the 1,000 workers surveyed who were thinking about changing jobs said they were looking for better pay transparency than is provided by their current employer.
Perhaps even more alarming is the finding that less than half (42%) of employees are fully aware of their total salary package.
Employers would be well advised to concentrate on improving their pay transparency and ensuring that every employee fully understands their take-home pay.
Lack of pay transparency makes employees feel they’re paid unfairly
More than a third (37%) of respondents said they don’t believe their company pays its employees fairly.
The pressing need for businesses to adopt a policy of pay transparency and make a conscious effort to explain why employees receive their current salary level is brought into sharp focus by additional findings from beqom’s research.
Employers need to respond proactively – our analysis shows that more than one-third (34%) of UK employees have had conversations with co-workers in the same role at their company and compared notes on their take-home pay, only to find that they aren’t paid the same amount.
Equally, nearly a fifth (18%) think their company pays employees unfairly because there is a perception of deliberate secrecy regarding the disclosure of pay and/or bonuses, while almost one in 10 (8%) believe their company pays employees unfairly because they feel they lack any insight into why they’re paid their current salary.
The benefits of a transparent approach to remuneration
Adopting a policy of pay transparency would allow HR directors to tackle all of these factors head-on.
Despite the widespread belief that people feel uncomfortable discussing their salary in a work context, our work shows that most would in fact be grateful for informed advice from their employer.
Although employees would prefer to discuss their take-home pay with their partner (90%) or a family member (80%), a large proportion would also like to receive a full explanation directly from their employer.
Beqom’s research found that three-quarters (75%) of those surveyed would be prepared to discuss their salary breakdown with their manager or team lead, underlining how receptive workers are to pay-related conversations in a work environment.
The benefits of pay transparency
It is vital that organisations are prepared to openly discuss pay with their employees to show that they are serious about pay transparency.
Workers who detect, or think they detect, a lack of pay transparency will become suspicious and are likely to think that they are being paid unfairly.
When employees perceive a pay gap, there is a 16% decrease in intent to stay.
That’s 50% worse than the typical impact of a pay freeze. Taking the time to walk their employees through their take-home pay and inviting questions allows employers to demonstrate a willingness to both reassure disenchanted groups and banish pay secrecy.
With no end in sight to the cost of living crisis, businesses need to be aware that their workforce will continue to look to them for support.
Employers who concentrate on establishing pay transparency within their organisations by ensuring that managers discuss salary levels directly with their workers will receive the benefits of such a proactive approach, including increased employee motivation and performance, and greater talent retention.
Tanya Jansen is co-founder at compensation management platform begom
