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New Talent Management – Compensation & Benefits

Pay transparency: More fairness in the world of work?!

New Talent Management – Compensation & Benefits

«How much do you earn?» That question was long considered taboo. But the younger generation is increasingly breaking its silence on the subject of salary. In this blog post, we examine how salary is perceived not just as a financial incentive, but also as a decisive factor for employees in times of skills shortages and new talent management. We take a look at the role of pay transparency in this context and its impact on employee retention, talent management, and the overall approach to securing skilled labour.

Pay transparency in Switzerland: From privacy to open dialogue

Salary is one of the most important incentives when it comes to people accepting or rejecting a job. For this reason, this blog post focuses on the aspect of remuneration and deals specifically with the current topic of pay transparency. There is no doubt that, in addition to salary, various other factors also play an important role, such as a good work-life balance.

The topic of pay transparency has become increasingly relevant In Switzerland in recent years. Salary disclosure has long been a sensitive topic in view of the fact that personal privacy is traditionally very important in Switzerland, as is discretion in financial matters. However, the younger generation is increasingly breaking its silence on the subject of salary.

The future prospects for pay transparency in Switzerland are promising. More and more companies are recognising the importance of fair pay and equality of opportunity and are actively promoting greater transparency. There is also a growing awareness of the issue in society, which is leading to increased demand for pay transparency. A new rule on pay transparency has recently been introduced EU-wide. All European companies have to declare the starting salary and/or at least the salary range for open positions from 2027. This also puts pressure on companies in Switzerland to act. Some are already pioneers, such as the Zurich transport company VBZ, which already communicates the salary range in its job advertisements.

Challenges, opportunities and risks of pay transparency

The implementation of pay transparency harbours challenges. It requires a rethink of corporate culture and a willingness to recognise and address existing inequalities. Efforts from the government, companies and society as a whole will also be required going forward in order to create a fairer wage landscape.

The opportunities and risks of pay transparency can vary widely depending on the company and its workforce. The pay systems of the future must therefore not only be more transparent, but also more employee-orientated and individualised. This is the only basis on which companies can secure a substantial competitive advantage in relation to employer branding, retention management and talent attraction. After all, remuneration is still the main attraction.

Specific recommendations

  1. Create clear guidelines: Pay transparency only delivers added value if the system behind it is transparent as well. You should define standardised criteria for setting salaries for all employees. This not only ensures fair and transparent remuneration, but also promotes employee satisfaction and trust in the company. Clear guidelines prevent possible inconsistencies and increase staff motivation.
  2. Create transparency: Give your employees a transparent insight into the salary bands so that they can make comparisons. This transparency creates a sense of fairness and motivates your employees, as it forms the basis for open communication. Employees can better assess their own performance and understand how their remuneration relates to that of others in the company.
  3. Use technology-supported analyses for maximum transparency and fairness: Tools such as SAP SuccessFactors Compensation support your HR in providing a reliable basis for objective salary-planning decisions. Salary data can be analysed and evaluated more efficiently by the use of such technologies. This not only leads to fairer decisions, but also enables salaries to be adjusted more precisely to individual performance and qualifications. The use of technology therefore makes a significant contribution to increasing efficiency in HR and supports the long-term satisfaction of employees.

Summary and key messages

Pay transparency helps to promote fairness and equality in the workplace. By communicating openly about salaries, companies can counteract discrimination and injustice. Transparency creates trust, motivates employees and enables fairer remuneration. Regardless of whether you decide for or against communicating salaries more transparently in your company, it is important to take a close look at the topic of pay transparency. Apart from anything else, because the new EU regulations will or could probably also apply to Switzerland within the next few years.

Look forward to the next blog

Having examined the challenges and opportunities associated with pay transparency and their impact on talent management, we will next focus on the further development of performance management. Our discussion will centre on the classic approach of management by objectives (MbO). In the next blog, we will shed light on the current challenges of this approach, present innovative solutions for the future, and provide concrete recommendations for companies in establishing a modern and effective performance management process.

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Michèle Inderbitzin

Michèle has been advising companies on SAP SuccessFactors Compensation for over 8 years. With extensive expertise in salary planning, bonus calculation and benefits, she is deeply rooted in this area. No requirement is too complex for her to successfully implement, both at a professional and technical level. 

Published: 14. March 2024

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