Dive Brief:
- Only 19% of U.S. companies have a pay transparency strategy in place, according to the results of Mercer’s 2024 Global Pay Transparency Survey Report, which were released Jan. 10.
- Despite that, 63% of U.S. organizations said they planned to share pay information internally and externally in a standardized way, and 56% said employees should have the same access to compensation data, regardless of where they work in the world, Mercer found.
- Of the more than 1,000 companies surveyed, over 300 of which are in the U.S., 77% identified compliance as a key driver for their strategy, and more than 50% cited improving employee satisfaction and aligning with company values as drivers of their policy.
Dive Insight:
Pay transparency is becoming increasingly important in the U.S., as more states, including New York, California and Colorado, pass legislation requiring employers to disclose pay or pay ranges.
Beyond that, 75% of U.S. employers said they think candidates expect pay transparency, and 54% believe current employees expect it, Mercer found.
“The data highlights a disconnect between the importance employers say they place on advancing these strategies, and how much progress has been made,” Gordon Frost, Mercer’s global rewards solution leader, said in a news release. “With fair pay the second-most important reason employees choose to stay with an organization, don’t wait to prioritize these efforts — because there is still a lot of work to be done.”
To address this, 65% of U.S. organizations plan to conduct pay equity studies, and 59% are adjusting their employee compensation models to align with external market rates, the report found.
But organizations also reported that the biggest hurdle for them is manager inability to explain compensation programs to workers; 37% of U.S. companies identified this as their biggest challenge, Mercer said.
“With manager enablement one of the biggest challenges our clients face in 2025, these employees will be critical to your pay transparency strategy’s success. Ensuring managers are equipped to deliver these messages to your workforce should be a key component of that rollout,” Tauseef Rahman, a partner in Mercer’s career practice, said in a statement.
Three in 4 companies said they aren’t ready for pay transparency laws, according to the results of a survey by Aon plc, a global professional services firm, released in December.
While the incoming Trump administration will likely try to weaken government agencies promoting pro-worker initiatives like pay transparency, state efforts will still have movement, Lulu Seikaly, senior employment counsel for Payscale, said regarding 2025 compensation trends.