PAY TRANSPARENCY – What Employers Should Be Preparing For.

PAY TRANSPARENCY – What Employers Should Be Preparing For.

Pay transparency is changing the way employers approach recruitment, salary setting and conversations about remuneration.

The EU Pay Transparency Directive is designed to strengthen equal pay for equal work, or work of equal value and introduce greater transparency for both candidates and employees.

For employers, this is about much more than simply putting a salary on a job advertisement. It means being able to demonstrate that recruitment and pay decisions are based on clear, objective and gender-neutral criteria.

FIVE KEY RECRUITMENT ACTIONS FOR EMPLOYERS

1. Establish the salary or salary range before recruitment begins
Employers should establish a genuine and defensible salary or salary range for a position at the outset of the recruitment process.

Candidates are to receive information about the initial pay or pay range sufficiently early to allow an informed and transparent discussion about remuneration.

Clark Tip:
Agree the salary range with your Clark recruiter when briefing us on a vacancy. This allows us to position the opportunity accurately in the market from the beginning.

2. Review how your salary ranges are determined
Pay transparency is not simply about publishing a figure.
Employers should be able to explain how salaries and salary ranges are determined using objective, gender-neutral criteria.

Depending on the role and organisation, relevant factors might include:
•Skills and qualifications
• Relevant experience
• Level of responsibility
• Complexity of the position
• Working conditions
• Performance or competency requirements
• Other objectively relevant criteria

3. Move away from asking candidates about salary history
One of the significant changes under the EU Pay Transparency Directive is the prohibition on employers asking applicants about their pay history.

Recruitment conversations should instead focus on:
The value of the role + relevant experience + skills + responsibilities + the employer’s remuneration structure. This is intended to reduce the risk of historical pay inequalities following candidates throughout their careers.

4. Review job advertisements and recruitment processes
Employers should review their recruitment processes to ensure they are fair, transparent and gender neutral.

This includes reviewing:
Job Titles | Job Descriptions | Selection Criteria | Interview Questions | Salary Discussions | Offer Processes.

5. Prepare your hiring managers
Pay transparency will make consistency increasingly important.

Managers should understand:
• The approved salary range for a vacancy
• How that range has been established
• What criteria determines where a candidate may sit within the range
• What can and cannot appropriately be asked during recruitment
• How salary decisions should be documented and explained