Aon unveils progress and challenges in pay equity and transparency
Aon unveils progress and challenges in pay equity and transparency | Insurance Business Asia
Insurance News
Aon unveils progress and challenges in pay equity and transparency
Revealed – key trends and the road ahead for Asian companies
Insurance News
By
Roxanne Libatique
Global professional services titan Aon plc has shared insights from its latest 2023-24 Asia Pay Equity Survey, casting light on the evolving landscape of pay equity and transparency within the Asian market.
This annual analysis seeks to unravel the complexities and challenges businesses encounter as they navigate the waters of pay equity and transparency, providing a critical look at the driving forces behind these changes.
Asian corporations align with western counterparts regarding pay transparency
In a notable shift, Asian corporations are progressively aligning with their Western counterparts in emphasising pay transparency, a move spurred by the anticipation of regulatory evolutions similar to those in North America and Europe.
Despite the absence of strict regulatory frameworks in Asia – excluding Japan and Australia – where 79% of the survey’s participants deem pay transparency as crucial, there’s a palpable expectation for new legislation in key economies such as Mainland China, India, Singapore, and Hong Kong.
Factors pushing Asian corporations to adopt pay transparency
The survey identified regulatory compliance as the top catalyst for adopting pay transparency for 72% of the firms, with DEIB initiatives and benchmarking against peer practices also playing significant roles. However, a mere 25% of organisations have taken steps to openly discuss pay matters with their workforce, opting for a more guarded approach.
The analysis suggested a faster uptake of transparency practices among publicly-listed entities, with 86% implementing measures of pay transparency, as opposed to 74% of their privately-held counterparts.
Peter Zhang, partner and head of Talent Solutions for Aon in Asia Pacific, highlighted the proactive stance of certain organisations ahead of impending regulations.
“Globally, pay transparency regulations and directives are being introduced with the aim of closing the pay gap more quickly – through legislation, rigour and enforcement. Although it is still nascent, trends in pay transparency show that regulations will catch up in the region and most organisations may have to disclose some information about pay transparency,” he said. “Forward-looking organisations in Asia are therefore not waiting for regulations to catch up but taking a proactive approach to pay transparency. While embarking on this journey, they are deciding on the degree and extent of pay transparency based on drivers such as their DEIB policy, peer practices, local market requirements and practices of their global headquarters.”
Focusing on pay equity, the survey found that 62% of companies are scrutinising their pay structures to ensure equity, with a strategic approach to implementation reported by 65% of these firms. The commitment to conducting pay equity analyses is notably higher among public companies compared to private firms. Key factors influencing pay equity considerations include job family, performance ratings, and experience levels.
Barriers stopping organisations from adopting pay transparency
Despite the strategic importance of pay equity analyses, dissemination of findings to broader stakeholder groups remains limited, with a significant focus on senior management.
Organisations cite budget allocation, insufficient knowledge of industry standards, and inherent managerial biases as the primary obstacles to executing pay equity initiatives.
Maggie You, partner and head of people advisory and people analytics, Talent Solutions for Aon in Asia Pacific, advocated for these analyses to be underpinned by a well-defined job architecture and analytical job evaluation methodologies.
“Developing a pay equity implementation strategy based on a thorough pay equity analysis helps organisations identify any discrepancies. However, it is essential to note that the foundation of such an analysis is based on a robust job architecture built on analytical job evaluation methodology,” she said.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
