More than one in three (34%) South African business leaders believe pay transparency will become standard practice in as little as three years, according to new research by global talent solutions partner, Robert Walters.
While 70% believe internal pay disputes will be their biggest challenge if it is passed into law.
With South Africa’s Fair Pay Bill opening for public comment last week, many local employers are now considering how pay transparency could shape their workforce strategies.
Pay transparency is the practice of sharing information about total compensation either in a job advertisement or during negotiation discussions, as well as the logic behind how pay decisions are made.
Phill Brown, global head of market intelligence at Robert Walters, says: “South African businesses are competing for skilled professionals on a global stage. In a number of markets, including the US, Australia and soon the EU, there is more openness around salary, and it is starting to shape how jobseekers assess opportunities at home.
“Many organisations worry that pay transparency will be costly, particularly where pay structures have evolved unevenly over time.
“In reality, the bigger challenge is often not having visibility. When leaders get a clear picture of how pay is set across the business, conversations quickly move from concern to action, with a far sharper focus on where change is genuinely required.”
The concern for leaders
Despite nearly 40% of businesses saying they already include salary ranges in job adverts or are seriously considering it, one in five leaders are concerned about losing flexibility in hiring offers and competitors gaining insight into pay structures.
“There is a perception that publishing salary ranges limits flexibility. In practice, what tends to happen is that salary ranges set clearer expectations from the outset. It can reduce back-and-forth later in the process and support more confident, informed hiring decisions for both employers and jobseekers,” says Brown.
Employees support pay ranges in job adverts
When asked if they would support employers being required to include pay ranges in job advertisements, 90% of professionals say they strongly support it, while nearly 70% agree this makes prospective employers look more appealing.
Additionally, nearly 50% of professionals say they would feel more positive about their employer if pay was fully transparent internally.
“This shows how closely pay transparency and employee value proposition are connected,” Brown says. “If candidates can’t understand how you pay and why, they are less likely to be persuaded to join your business.
“The strongest message you can have is that you have a clear approach to how reward works at your organisation.”
According to the recently-launched Robert Walters Pay Transparency guide, equipping managers with the right language and open communication are the top two ways to manage the cultural shift that can arise.
“Pay transparency is not a simple policy issue but part of a wider shift in how employers communicate value. Businesses should consider modernising reward in a way that supports trust and gives leaders a data-backed foundation for pay decisions,” Brown concludes.