Pay Equity and Pay Transparency Gaining Importance in Asia, Driven by Regulations and Company DEIB Policies, Aon Survey
Source: EQS
Pay Transparency is Gaining Importance Organisations across According to the survey, 72 percent of companies cite regulation and compliance as their primary driver for action on pay transparency, followed by 58 percent that attribute it to DEIB policies and 38 percent to peer practices. However, only 25 percent of organisations say they have proactively disclosed some aspects of their pay-related matters to employees, with many taking a cautious approach. Apart from regulatory requirements, this shift toward pay transparency is also being championed by business leaders who recognise the role of pay transparency in promoting diversity, equity and inclusion in the workplace. The survey further reveals that, compared to privately-held companies, publicly-listed companies are further ahead in implementing pay transparency practices, with 86 percent adopting some form and frequency of pay transparency compared with 74 percent of privately-held organisations. Pay Equity Practices Pay equity compares the pay between job holders doing substantially similar work, which has historically been unequal across gender, disability status, race, ethnicity groups and other employee cohorts. Led by upcoming regulatory requirements along with their own maturing DEIB policies, organisations are anticipating the need to remediate their compensation structures. The survey results show that 62 percent of organisations conduct a pay equity analysis, and, among them, 65 percent have an implementation strategy. The prevalence of such analyses is higher in publicly listed companies, with 75 percent reporting that they conduct such analyses, compared to a split of 50-50 for private organisations. In addition, 71 percent of the companies surveyed consider job family rating as the top factor for consideration during pay equity analyses; followed closely by performance rating at 69 percent and experience at 59 percent. Communicating the results of pay equity analyses to key stakeholders does not play a pivotal role in driving the implementation of pay equity strategy. According to the survey, more than 50 percent of the responding companies communicate results to top management, 29 percent to their employees, while 22 percent of companies report that they share this information with their board of directors. Despite the senior leadership being aware of this information, 38 percent of organisations say budget allocation is their top challenge for implementing pay equity, while 34 percent say a lack of knowledge of peer practices, and 25 percent say that unconscious bias in managers hinders implementing pay equity. "Typically, organisations with mature HR functions with evolved pay equity practices conduct a pay equity analysis annually. For many of these organisations, the study is done during or after the annual salary increment cycle. The frequency of conducting a pay equity analysis should depend on various other factors, including the gap identified after the initial analysis, remediation plans for gap reduction, budget allocation, perceived changes in employee demographics for example due to large-scale hiring plans, significant changes in the organisation due to M&A, and re-organisation," added You. About the survey Aon's 2023-24 Disclaimer The information contained in this document is solely for information purposes, for general guidance only and is not intended to address the circumstances of any particular individual or entity. Although Aon endeavours to provide accurate and timely information and uses sources that it considers reliable, the firm does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of any content of this document and can accept no liability for any loss incurred in any way by any person who may rely on it. There can be no guarantee that the information contained in this document will remain accurate as on the date it is received or that it will continue to be accurate in the future. No individual or entity should make decisions or act based solely on the information contained herein without appropriate professional advice and targeted research. Hashtag: #Aonplc The issuer is solely responsible for the content of this announcement. About Aon
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