Expert shares input on how employers should react to trend, pay transparency rules
Employees are no longer afraid to discuss details around their salary with their colleagues, according to a recent Robert Half report.
More than half of professionals (52 per cent) have discussed salaries with colleagues, according to the report.
And this is far more common among younger workers. Nearly nine in 10 (86%) Gen Z workers and 59% of Millennials have done this. Meanwhile, only four in 10 Gen X workers and Baby Boomers (41%) have done this, finds the survey of 596 professionals across Canada.
“It's been a major shift in the workplace, including around the etiquette for this,” says Sandra Lavoy, Robert Half regional director, in talking with HRD. “Professionals have become much more open about this than in the past. And even now, the tight labor market has enabled many workers to have open discussions.”
Pay transparency legislations
And that’s not going to be the end of it, she says.
“There will be a lot more conversation around this,” pointing to recent legislations around pay transparency.
Nearly half (48%) of workers say lack of transparency about salary and benefits is their biggest frustration in the hiring process, according to another Robert Half study.
When it comes to cash considerations, 39% workers say their greatest frustration about job hunting is not being offered a pay package in line with expectations, and more than one-third (35 per cent) of hiring managers report an uptick in job candidates who ask to negotiate compensation packages. And compensation negotiations have spiked this year not just in Canada, according to another study.
British Columbia previously rolled out legislation around this, and the pay transparency rule took effect Nov. 1. Ontario has also proposed similar legislation.
Pay transparency could mean disclosing salaries in job adverts or fostering open conversations regarding pay rises with existing staff, according to a previous report.
“To mitigate concerns about this, companies should ensure they're offering market salaries,” says Lavoy.
If companies are not offering salaries at market rate, employers must adjust, she says.
“You'll need to have a retention strategy in place. Either [offer] remote work or you will lose people. If you're not paying market value in today's market, especially with this transparency happening…, give them more benefits or perks. They will take less, but something's going to have to be given to the employee.”
What if you overpay an employee?
What if, after looking at market rates, you find out that you’re overpaying an employee?
Reducing that worker’s salary is not the way to go, says Lavoy. Doing so would pull you into different legal issues, such as constructive dismissal when an employee quits.
Instead, employers can make adjustments to that worker’s compensation package, she says.
“You could say ‘By the way, we're going to do equalization of pay. You won't get an increase for the next two years because you're at the top of the grid. But here's what we can offer you for your excellent work’. Sometimes it's a one time stay bonus, hybrid work, maybe gym membership. That could happen.”
Canadian employers are getting a high mark when it comes to providing the benefits and perks that their workers want, according to a previous report from Robert Half.
Importance of compensation reviews
With all the pay transparency rules coming in, salaries may no longer be a complete secret to workers.
To ensure that employers are paying their workers right, they must make compensation reviews a part of their culture, says Lavoy.
“Businesses need to look and reassess compensation for employees at regular intervals, not just when somebody's about to resign. This should be part of your business model now, looking at compensation analysis and reviews.”
But if there will be cases where employers simply cannot afford to provide pay increases to workers who need to receive salary raises, extending perks and benefits to them could be a good remedy, says Lavoy.
“If budgets are constrained because interest rates are high and the cost of doing business is costing companies a lot more than [normal], which sometimes makes raises impossible, then offer better flexible work options, more paid time off.”
Eighty per cent of Canadian managers are now including salary ranges in job ads, according to a previous Robert Half survey.
