Although the EU pay transparency regulations don’t yet come into force, I am conscious we will have a great deal to do to prepare. To get up to speed on the latest, I register for a masterclass webinar held by our advisers, Smarmy Consultants.
I am working from home that day and I wear my best cardigan as Smarmy are typically smartly dressed, I needn’t have bothered as participants are not on camera. Indeed, we are also all muted. I am a bit miffed about that as I was hoping for an interactive session. Luckily there is a chat function where we can add our questions at least. I already have a list.
After introductions, they start with a summary of the new legislation and definitions. I will admit it is a bit hard to stay engaged here, partly because I have mostly heard it before and partly because anything with the word ‘legislation’ in it is so soporific. However, Smarmy does make an interesting distinction between transparency and reporting; ‘transparency’ being what information we make available to current and prospective employees and ‘reporting’ what the governments need to know. In my head this had all been lumped together, but then regardless of the label we have got to do it.
Of course, we already do a certain amount of reporting on the gender pay gap for the UK and several other countries where required. As this is currently only on base pay, this is handled by my compensation colleagues and our HR services team. In future, we will need to report on many more aspects of pay including benefits. Gulp. For the most part our benefits are offered consistently across the board based on practice in the country but there are exceptions particularly where we have grown through acquisition and not been able to harmonise due to cost and/or local protections.
We will need to explain and perhaps even rectify those exceptions. Even where benefits are offered consistently, we will need to find a way to measure and allocate those amounts. Although we have talked about creating total reward statements including all elements of pay, we are nowhere near making that a reality. Indeed, we only focus on cash compensation, merely provide links to the benefits page. I guess sorting out the value of benefits on a consistent basis might help us to move towards more comprehensive statements. I am jumping ahead and need to concentrate on the webinar.
Pay legislation
Even on the compensation side, we have some significant thinking to do. The legislation will require us to explain and act on any gaps over 5%. If I think of our pay ranges, they are 20% either side of a midpoint so we will have many such gaps to explain. I ask a question about pay range design to see what Smarmy Consultants recommends. I will have to wait until the end to hear the response.
I had thought that we only had to worry about countries where we have more than 100 employees in a legal entity. In fact, we need to provide transparency to potential employees and all current employees will have the right to request information. That means even in the EU countries where we have only a handful on employees, we will need to set out some kind of documented pay structure. I ask Smarmy’s consultants if they think it will be better to publish pay ranges or starting salaries, assuming we get the choice. I also ask if there is an optimum pay range design. I know how often we hire someone based on their current salary plus a bit. That just is not going to cut it anymore. Indeed, we are not even allowed to ask what someone earns now. Sorting all this out is sounding like a lot of work. Sigh.
There is also a slide on pay progression and promotion. Smarmy Consultants does not give the answer, they just say we will need to be transparent about it. We have some lovely words on the website about career development opportunities, but I have seen how the high potential process works around here. Call me cynical, but I have noticed how people the Higher Beings (our executive management team) like get promoted, and those they do not like are likely to be made redundant. Not a policy we can publish but it is worth knowing if you want to keep your job. Again, I ask a question: what sort of career progression information should be provided? In other words, give me some useful advice that I can act on.
The webinar does give some food for thought but it has failed to give me any information I did not know already. My mind races. I do not really want to be responsible for the whole pay transparency project, but I cannot think of anyone else internally who could do it. Big Bad Boss stays well out of the detail, and my colleague Lazy Susan does not really do numbers, or indeed words very well. I have little faith in the HR services team because it can only follow instructions, rather ineptly.
Finally, we get to the Q&A section of the webinar. We participants are still muted, and the chat is not even displayed to see what questions have been captured. We spend a pointless 10 minutes talking about maternity and paternity pay. Worse, none of my questions are answered. I wonder if that is because they are only tackling pre-prepared questions or if my questions were too specific. After all, they do not want to give away secrets that can be sold.
They wrap up by plugging their services, telling us how to contact them if we need to speak to a consultant. Perhaps that is the answer: get approval for a consultant to lead the project. That way, I will only have to provide the detail on benefits. That is still a massive piece of work. I feel a sleepless night coming on.
Next time…Candid helps the talent team
