15 January 2017

What you should know about Pay Transparency

Today’s blog article deals with pay transparency and what you should know about it. In many companies pay transparency is still a taboo subject and this has different reasons that are hidden in the nature of humankind. Many don’t want to have an open pay slip culture in which everyone knows what he or she earns. This in regards of potential conflicts; caused by this approach. As in many other countries also within Switzerland women earn less for the same work in comparison to their male colleagues in many business industries. The portal Lohntransparenz.ch predicts that women earn approx. 20% less on average. The estimated salaries are the input by users of this platform and are audited by a two-step analysis. For further detailed information please visit the website of Lohnanalyse.ch.

CHF Banknotes: Source, Pixabay.com

Pay transparency does not only affect the difference between women and men, but many other areas of work life. In a lot of organisations people do not speak in general about this topic and try to supersede it. In Switzerland the subject salary is almost as sacred as the banking secrecy, says Remo Schmid, PwC Partner and Head of the area of remuneration consulting in the French-speaking part in an article by Handelszeitung from 2011. That this is a highly sensitive topic shows what happened in Norway after the publication of the salaries in 2001. Practically over night the incomes of the low-wage earners increased by 5%, as everyone could see and compare if his or her salary was inline with the market rate. Interesting is also the fact that pay transparency in Sweden does already exist since 1766 and is publicly accessible. More information you can find in the article on the portal Compensation Cafe.

The number of organisations and companies, which support the concept of pay transparency within Switzerland are steadily increasing. For them it is important that it becomes a subject of public discussion. In the company Metron Traffic Planning a yearly meeting is held and everyone from CEO to the clerk can openly discuss the salary for the next year. A further example is the IT company Ergon Informatik, they are one of the pioneers in pay transparency and this has apparently a very positive impact on the employee satisfaction, as one can compare on Kununu or Glassdoor. One of the greatest pioneers in terms of pay transparency, because of its understanding to create a more equal world is the Alternative Bank Switzerland (ABS). In this bank the CEO earns “only” 3.5 times as much as an employee who works in the payment transaction unit. Additional information about pay transparency at the ABS you can find in an CNBC article.

Companies which really want to implement a fair salary system in Switzerland should consult a job evaluation specialist like ABAKABA. The thought out assessment of different activities gives companies a meaningful overview, according to the level of requirement and responsibility. An overall good Pro and Contra in terms of pay transparency is published on the portal of Peoplegeeks. Particularly in companies where salaries are not equally distributed, pay transparency can cause problems. But in most cases it leads to greater motivation and commitment within the companies after its introduction.