Thinking

How we’re making pay transparency a success and how you can too

Written by Niall Grant | July 18 2023

At Clarasys, radical transparency has always been a principle of how we approach things. Our employees are owners of the business and we trust them with the information that allows them to shape the future of the firm, and be in the driving seat of their careers. Diversity, equity & inclusion and pay are no exceptions to that rule. With the EU pay transparency directive recently signed into law, we thought we’d share how we’ve been making pay transparency successful for years(!) and how you can get started.

What does pay transparency look like for us?

We completed a company-wide drive to collect diversity data – and are strong believers in not having data for data’s sake. Therefore we publish the following insights to all employees

  • The demographic makeup of the company, split by level and locations
  • Gender pay gaps
  • Ethnicity pay gaps
  • Statistics on socioeconomic background, sexuality and disability status
  • Average time to promotion across all levels and demographics

However, data alone is not enough to give our employees (and prospective candidates) a full picture and help them drive their careers, therefore we provide them with:

  • Pay philosophy – including how we pay, how to prepare for pay review, how we measure and decide what pay is fair
  • Pay bandings – mean and median by level and years of experience, all benchmarked against the rest of the consulting industry
  • A comprehensive competency framework
  • Promotion criteria for every level

How do we make pay transparency a success?

Having the above tools for transparency has been great for our people. But how can you stop this surplus of data from causing chaos? We have learnt that to truly make pay transparency a success there are some important things that need to be true practically and culturally:

Practically:

  • Equip & support your managers to have pay conversations: Let’s face it, talking about pay is not always comfortable! Making sure that employees can have meaningful and informed conversations with those closest to them (their managers) is key. Providing your managers with the right information and tactics to manage pay conversations creates an honest and constructive environment.
  • Have an open door policy: Not everyone will be happy and not every pay decision will be right the first time. And that’s okay! Having an open door policy to engage in a two-way dialogue means that concerns don’t go unheard and misalignments can be rectified. Our managers ask once a quarter how their team feel about their pay.
  • Understand, communicate, act: Seeing the pay gaps, promotion rates and demographics can be an information overload. Before sharing:
    • Understand what the data is telling you: do a deep dive to make sure you understand why any pay discrepancies exist.
    • Communicate the data story effectively, to avoid misinformation or incorrect conclusions.
    • The data is there to give you confidence that employees are being fairly paid. Don’t be afraid to act on discrepancies that fall out of line with expectations.

Culturally:

  • Transparency through-and-through: Although it can feel like the be-all and end-all, pay is just one element of running a business. Being completely transparent on the business from overall health, to where you are currently investing, to how day-to-day decisions are being made, helps to contextualise pay for employees.
  • Trust: A core value of our business is trust, and we make sure that is embedded in all we do. Building a culture of trust is vital in making pay transparency successful. Build employees’ trust in the business by sharing all that you can, and trust that they will interpret objectively and engage with it accordingly. 
  • Feedback and evidence-based decision making:  Evidence, evidence, evidence! Evidence-based decision-making is the best way to build confidence that you are paying people fairly:
    • Put an emphasis on employees collating feedback throughout the year on their performance as a foundation for pay increases or promotions.
    • Equally important to this, make sure that all employees are equipped to give fair, constructive and objective feedback that minimises biases they may have.
    • Have decision-makers review evidence regularly throughout the year in groups. Reducing the risk of bias in decision-making and having too much to review in one go.

How to get started

There is much more that goes into making pay transparency and sharing diversity data successful than sharing a dashboard – it doesn’t happen overnight but is worth the effort. If you’re getting started on your pay transparency journey here’s where you can focus:

  • Understand your data: Truly understand what your pay and diversity data is telling you, and use it to guide any changes you may want to make in the future.
  • Assess your company’s readiness: Every company culture is different and will respond differently to having pay transparency, assess whether you’re ready practically and culturally.
  • Review your decision-making processes for biases: The cornerstone of making pay transparency work is the trust employees have in fair decision-making. Invest the time in making sure your processes are evidence-based against objective criteria and principles.  

If your organisation is in need of support, please get in touch to find out more about how we can help.