Driving Change: Key Insights from Mercer’s Pay Transparency Report
At the Women in Work (WiW) Summit, we unveiled two pivotal reports that underscore the growing importance of equity in today’s workforce: Mercer's report on pay transparency and the WiW Gender Equity Measure (GEM). These reports offer deep insights into the challenges and opportunities ahead, as companies strive to create more inclusive and future-ready workplaces.
Mercer’s Pay Transparency Report: Is the UK Ready?
With the EU’s Pay Transparency Directive taking effect, UK companies are increasingly feeling the pressure to address pay transparency. While UK law does not yet require full pay transparency, this directive—designed to ensure equal pay for equal work—will influence UK businesses and could potentially shape future legislation.
The directive, effective from June 6, 2023, must be implemented by EU member states by June 7, 2026. It introduces new obligations for employers, including disclosing salary ranges, responding to pay data requests, and publishing gender pay statistics. Although the UK is no longer part of the EU, these global standards are expected to drive market expectations and may inspire future UK policy changes, particularly if a Labour administration aligns with international trends.
Key Findings from Mercer’s Report
Mercer UK surveyed 100 UK organisations employing over 1.5 million people to better understand how businesses are responding to this growing demand for transparency.
Here are the top findings:
50% of UK organisations are either embracing pay transparency today or planning to do so within the next one to two years, acknowledging its increasing importance in attracting talent and driving employee satisfaction.
59% of organisations are sharing or planning to share pay ranges internally, and while only 13% currently disclose these ranges externally, nearly 48% plan to make them public in future job postings.
81% of organisations have already developed or are planning to develop a global strategy for pay transparency, aligning with worldwide DEI and business strategies.
46% of companies aim to improve employee satisfaction and perception of fairness around pay, viewing transparency as part of a broader push for responsible business practices tied to Environmental, Social, and Governance (ESG) goals.
Compliance is also a significant driver, with 52% citing it as a motivator, while 61% are focused on aligning their pay policies with talent and reward strategies, and 60% are focused on aligning these policies with company values and DEI commitments.
Lucy Brown, Mercer, at the Women in Work Summit 2024
The Responsible Employer: Beyond Compliance
Lucy Brown, Mercer UK’s DEI and Pay Equity Consulting Leader, emphasised that pay transparency is not just about ticking compliance boxes; it’s about staying competitive, demonstrating fairness, and building a culture of trust. Employers who go beyond basic compliance, adopting transparency as a strategic advantage, are better positioned to attract top talent and align with employee expectations, especially in today’s evolving global marketplace.
Generational Differences: What Gen Z Wants
The importance of pay transparency is growing, particularly for younger generations. Mercer’s 2024 Global Talent Trends survey reveals that 46% of candidates won’t even apply for jobs without posted salary ranges. Furthermore, 89% of Gen Z are comfortable discussing pay at work, compared to just 53% of Baby Boomers. This generational shift underscores the critical role of transparency in attracting and retaining talent today.
Pay transparency is quickly becoming more than just a compliance issue—it’s a competitive advantage. Employers must be prepared to meet the expectations of a more vocal and informed workforce, especially as transparency becomes a key factor in employee satisfaction and retention.
To delve further into the report you can access the full report, including a five-step action plan, here.
Why We Need the WiW Gender Equity Measure (GEM)
The second major report launched at the Summit was our WiW Gender Equity Measure (GEM). This report highlights the importance of gender equity as a core business priority. Gender equity isn’t just a moral issue—it’s a commercial advantage. In times of economic uncertainty, where DEI commitments may seem to be on the decline, companies should be doubling down on their efforts to close gender gaps.
Research shows that companies committed to gender equity outperform their peers. McKinsey & Company found that companies in the top quartile for gender diversity on their boards are 25% more likely to deliver above-average profitability. Similarly, Accenture UK & Ireland revealed that a culture of equality is not just a “nice-to-have” but a critical driver of innovation and growth.
The WiW GEM was developed to track and measure progress in gender equity across large UK companies. It benchmarks 400 companies in three key areas:
Equal representation on boards
Pay gaps (specifically gender pay gaps)
Transparent and supportive family policies
The GEM doesn’t rank companies by performance but highlights those making meaningful strides in creating equitable workplaces, showcasing them as examples for others to learn from.
Top Findings from the GEM
Of the 400 companies reviewed, 231 had a mean or median gender pay gap of under 15%, with 68 achieving an exceptional pay gap of less than 1%.
79% of companies had boards composed of at least 33% women, while almost 50% achieved over 40% female representation. 74 companies had boards with over 50% women.
Nearly half (47%) of the companies made their parental leave policies public, while 53% still lack transparency in this area.
Companies in every sector, from aerospace and defence to retail, achieved progress in at least one of the three GEM areas, proving that workplace equity is possible across all industries.
CEO gender is not a barrier to progress: 61% of male CEOs achieved two of the three GEM measures, and 82% of female CEOs accomplished the same, showing that leadership from both genders is driving progress.
These findings show that companies committed to gender equity are not only enhancing their ability to innovate but are also future-proofing their businesses against changing legislation and evolving employee expectations.
The Path Forward
The WiW GEM demonstrates that workplace equity is achievable. Our goal is to inspire more companies to join this movement, embrace transparency, and accelerate their progress on gender equity. By tracking and measuring progress, we can ensure that the dial keeps moving towards a fairer, more inclusive workplace for everyone.