How do I Implement Pay Transparency Effectively in a Small Organisation?

EU Pay Transparency legislation is coming into effect this year and for many HR teams this will be a big exercise in change management. The focus now is on how to operationalise it smoothly.

At SkillsTrust, we work with small and mid-sized employers  (typically with 250–1,000 employees) to implement pay transparency simply. We have compiled over 5,000 hours of learning on the nuances that pay transparency presents in smaller organisations to create a comprehensive case study on how to do it well.

Our case study follows Joanne, a HR Manager at BluePrint Dynamics and the Project Lead for their pay transparency project. Blueprint Dynamics is a successful engineering consulting firm that is HQ’d in Ireland with 500 employees. They have grown organically over the past 15 years without a lot of formal structure around pay. They currently do not have job levels, job families or formal salary bands in place.

Joanne’s reality is as follows:

• Her HR team is small and juggling competing priorities and there is no in-house Rewards team

• Pay and job data sit across multiple systems

• Job titles are inconsistent; historical decisions vary by manager

• There is no documented pay philosophy or framework, although there are rules of thumb that are applied

• Employee expectations around transparency have risen in recent years

To avoid this project getting out of hand quickly, Joanne outlines 5 key decisions she has to make to deliver results:

• Which stakeholders to include and when?

• How to limit the scope of the audit so it is manageable?

• Which pay data sources to use?

• How to approach job architecture given constraints?

• How to decide if a pay gap is objectively justified or not?

To see how Joanne answered these 5 questions and delivered her first dry run pay gap audit, download the full case study here.

While Blueprint Dynamics is a fictional company, Joanne’s reality is not a figment of imagination. Lots of small and mid-sized organisations are grappling with getting visibility of category-level pay gaps ahead of the June 7th deadline. Pay transparency projects can become unwieldy very quickly. Data is messy and getting buy-in from stakeholders can be challenging.

As an appendix to our case study, we have put together the two next actions you can take today to get your pay transparency project up and running.

1. Form the Right Project Team

A big driver of a successful pay transparency project is having the right people engaged. The data required for this analysis lives in different systems (HRIS & Payroll), so having a representative from all teams is crucial. Additionally, leadership will need to sign off on the results of the pay gap audit, so making them aware that this work is ongoing and updating them when necessary is really important.

If you’re unsure when to engage with your leadership team and which other stakeholders need to be involved, read our pay transparency readiness roadmap article for practical guidance.

1. Deciding whether to run in-house, hire a consultant or buy software

The age old question, whether to tackle this project in-house or with external help. The key is to decide which is best for your business. Ask yourself the following questions to see what solution might suit you best:

1. How complex is our organisational profile? (Headcount, role count, legal entities, locations covered)

2. Is there a Job Architecture in place to support the analysis?

3. If not, do we have up-to-date Job Descriptions in place for our roles?

4. How clean is our pay data and how easy is it to access?

5. What level of data literacy and analytics skills do we have in-house?

6. What’s our time/monetary budget for this project?

7. Do we know what kind of governance structure we need/want to manage this year-over-year?

If you are comfortable with data analysis, have job architecture in place, a low number of roles (<50), a single entity and location and good access to data, then this project is most likely manageable in-house using tools like Excel/Google sheets.

However if your data is messy, you have no job architecture, and over 50 roles, then this could be a heavy lift to do in-house if you do not have a dedicated rewards professional on staff.

A consultant and/or software provider will make running your project much easier. There are lots of different providers on the market, so make sure to make a decision that best fits your business.

For more insights & guidance on implementing pay transparency in smaller organisations, subscribe to the Pay Transparency Playbook newsletter.

SkillsTrust is a HR technology company that supports small and medium sized businesses adopt pay transparency in a simple, fast and affordable way.