Pay transparency at “Great Place to Work”
The mission of “Great Place to Work” (GPTW) is to make companies particularly attractive employers and to develop outstanding workplace cultures. In line with this commitment, the consultancy company has embraced pay transparency by openly communicating wages within the team. Find out how pay transparency was introduced at GPTW, what the key benefits are and receive tips for a more transparent pay culture.
What were the main reasons that led to the decision to implement pay transparency?
We have always spoken very openly with our employees about all aspects of our business, including the key financial figures. For us as a consulting company, salaries represent our biggest expenses, but previously they were always a black box. We wanted to change this. We also noticed that younger employees, in particular, were already talking to each other about their salaries, so there was already a certain degree of transparency.
Could you explain the specific steps and processes involved in introducing pay transparency?
First, we informed our employees about our decision to make salaries transparent. We granted everyone the right of veto. In the event of even only one person opposing the change, we would have either reconsidered the decision or initiated a discussion to explore alternative solutions. However, given our strong foundation of trust within the workplace culture, the whole team supported the idea.
What communication channels were employed to convey the shift towards salary transparency to employees, and what were their reactions?
During our all-hands meeting, we took a practical approach by displaying an Excel list containing names, workloads, and salaries. I had some concerns before this meeting. We knew that we pay fair salaries and can stand behind every salary. But making them transparent and opening them up for discussion represented a big step. However, there were only a few brief questions seeking clarification and after a few minutes the topic was already over.
What, in your opinion, are the key benefits of pay transparency?
The primary benefit of pay transparency is that salary is not really an issue anymore. Everyone knows how to compare to their colleagues and there is a clear process for adjustments. During the recruitment process, we talk openly about what we expect from potential hires and what a fair salary is.
Another major advantage is certainly fairness. Only if employees are aware of the wages can they judge if they are being paid fairly. This also allows them to discuss their wages with the employer as equals. Various studies have proven this positive effect, especially with regards to the gender pay gap. This is also beneficial for the company because no company wants to be perceived as an unfair employer.
Have you observed any changes in employee performance, retention, or recruitment due to the implementation of pay transparency?
In terms of performance, we haven’t identified a direct correlation with pay transparency; our team bonus, which benefits everyone, is more important here. However, transparency is certainly an additional motivator for employee retention. There is also a big impact when in recruitment: as we already disclose the salary in the job advertisement, only people who see themselves in this salary range apply. Furthermore, addressing salary discussions openly right from the beginning facilitates more straightforward conversations, avoiding the need to delicately broach the topic at the conclusion of the interview.
What were the biggest obstacles in implementing pay transparency?
Fortunately, we didn’t encounter significant challenges. For many companies, the major obstacle is a lack of fairness, which is usually due to the absence of a remuneration model. Every salary has a history, is negotiated individually and is often not fair. Establishing a transparent system requires considerable preparatory work under such circumstances.
How did you handle concerns about data protection and confidentiality when disclosing salary information?
As mentioned earlier, we initially asked employees whether they agreed to the internal publication of salaries. Today, pay transparency is part of our personnel regulations.
What advice would you give to other companies who are considering the introduction of pay transparency?
I would definitely take a gradual approach. First, a remuneration model ensuring fair pay is needed. The first step should be to make this model transparent. In conjunction with this, the salary bands for the individual functions can be made transparent. If there are still salaries that no longer correspond to the remuneration model and the salary bands, these salaries must be corrected. Only in the very last step does the complete transparency of individual salaries take place. In any case, employees must be involved in the considerations and the process from the beginning to reduce uncertainties and any resistance.
Do you believe that the concept of salary transparency will become widely adopted in Switzerland and other countries?
The trend is clearly moving in this direction. In the EU, the pay transparency initiative grants employees certain rights to information. In some countries, salaries must be disclosed in job ads. In Switzerland, too, more and more employers are voluntarily publishing the salary or salary range in job advertisements. The global landscape is evolving towards greater transparency, driven by the growing demand for openness from employees.
Patrick Mollet is co-owner and consultant at the consulting firm “Great Place to Work”. In his role, he has been investigating for over 10 years the question of what makes an attractive employer and how work culture is changing. He is primarily in contact with companies to get them excited about the topic of workplace culture.