Are you ready for transparency?
Klar Packages are standardized modules for common reward processes. They are based on best-practice methods, refined time and time again to deliver reliable results at lower cost and implementation time.
Klar have developed a set of services in package form to prepare your company for pay transparency. They are plug-and-play solutions that help you navigate in this new environment, assisting you with the required reviews and reporting as well as providing expert opinions.
Pay transparency readiness
We make a full review of your policies and practices to identify areas requiring your attention. The full review consists of these parts, which also can be purchased individually:
Equal pay review
- An accurate measure of the pay equality in your organisation
- We adjust pay gap for all factors affecting pay but not related to gender
- We apply multiple regression models to determine if difference is a random variance or caused by bias
Job level review
- We review your job levels
- We review your compensation structure and how this links to company pay policies and practices
- We review for fairness according to policy
Market pay review
- We benchmark your reward packages for competitiveness
- We assess your Pay Transparency maturity
- We identify focus areas beyond formal requirements
- Areas where challenges can be expected
- Areas that can be optimized for better engagement
- We deliver an overall evaluation of your Pay Transparency readiness
- We deliver suggestions for improvements and a brief proposal for the way forward in bullet point form
Expanded Pay transparency readiness
We provide additional assistance should you need it. The standard package is based on a structured data set and access to market data, but we can assist you procuring and structuring the salary data needed for your analysis.
Also, some companies may need more complex analysis than covered in the basic analysis, such as:
- Companies with fewer than 50 employees
- Companies with many divisions and/or locations in more than one country
Pay transparency reporting
We can assist you with all reviews and reports necessary for your pay transparency policies, either when you need it or as an ongoing service, monitoring your compliance and other KPI’s.
The final details of the directive have yet to made into law. Key elements are expected to include the following.
- Pay transparency for job-seekers
- Employers will have to provide information about the initial pay level or its range in the job vacancy notice or before the job interview
- Employers will not be allowed to ask prospective workers about their pay history
- Right to information for employees
- Employees will have the right to request detailed information from their employer on average pay levels. This right will exist irrespective of the size of the company
- Reporting on gender pay
- Employers with at least 100 employees will have to publish information on the pay gap between female and male workers
- Joint pay assessment
- When an unjustified gender pay gap of at least 5% is revealed, employers will have to carry out a pay assessment in cooperation with workers’ representatives
- Burden of proof on employer
- It will be for the employer, not the worker, to prove that there is no discrimination in relation to pay
- Sanctions for non-compliance
- Sanctions are yet to be put in place by the member states. We can expect them to be effective
The main effect of the directive is indirect: the steps you need to take to before you make your pay policies public. These steps will all increase fairness, reduce bias and build trust with your people. They will know you as a fair and transparent employer, who rewards better than the competitors for their contribution to the organization. All effects that are of benefit to you as an employer.
They will also bring about a focusing of all your reward disciplines. Your pay policies will be increasingly challenged internally for fairness and justification, forcing you to focus on your structure and your benchmarking. This will reduce bias, improving clarity of goals and strengthen your market alignment, all classic reward virtues.
Last, but not least, the direct benefit of transparency is that not only your own people, but also everybody else, will know that you are a fair employer, that rewards your people well and have nothing to hide. Fairness and openness is one of the most sought after values when people choose a new employer.
Prepare for new dilemmas. The publicizing of pay policies leads to increased scrutiny of the way the policies are practiced. Expect to be challenged by both individuals and groups. Both merited and unmerited challenges have the potential to become public problems. With the increased publicity they can have harmful effects, even beyond your brand as employer.
Watch out for pay level compression. Outlier salaries will be challenged, leading to a gradual narrowing of the salary bands. Remember that there can be perfectly valid reasons for even very high differences in pay. Make sure you reward your high contributors rightfully according to your pay policy and their value to your company.
Expect to be challenged. Benefits could become outsized when people negotiate for alternative, individualized compensation. Salary adjustments becomes a draining process when the department heads are not prepared properly to meet the challenges to the pay structure.
Prepare for documentation. The formal requirements in the directive alone puts several levels of mandated reporting into law. Beyond the mandatory reporting, you will also need to document the rationale for your decisions, and how your pay levels will be affected.