In 2024, pay transparency in India has become an increasingly important aspect of the corporate landscape, reflecting a broader global trend towards greater openness in compensation structures.
The workplace has experienced a shift since the pandemic with GenZ coming into work, who are embracing pay transparency in India, and according to reports it’s on the rise.
Pay transparency refers to the practice of disclosing information about employee salaries, ensuring that individuals within an organization are aware of the compensation their colleagues receive for similar roles.
This transparency can contribute to a fairer and more equitable workplace, fostering trust and employee satisfaction.
Pay Transparency Law in India?
However, currently, no law mandates pay transparency in India but regulatory discussions revolve around existing frameworks like the Companies Act, 2013, and SEBI regulations, which mandate disclosure of executive remuneration.
The Equal Remuneration Act, 1976 addresses gender-based wage discrimination. Continuous changes or new laws may have been introduced since then, emphasizing the need to verify the latest information from official sources for any developments in pay transparency regulations in India.
Challenges persist, but the trend is expected to grow as a younger workforce demands equitable practices, fostering a culture of transparency in the Indian job market.
Why do companies often avoid disclosing salary budgets during hiring?
- Competitive Advantage
- More Power to Negotiate
- To Avoid Internal Conflicts
Though, companies are recognizing the importance of addressing wage gaps and ensuring that all employees, regardless of gender or background, receive fair compensation for their contributions. By making salary information more accessible, organizations aim to eliminate disparities and promote a culture of equality.
Pay transparency sees a rise in India 2023, ‘Indeed‘ Report
According to data, Pay transparency in India is on the rise. employers provided salary information in 46 percent of all job postings on Indeed in 2023, representing an 11 percent increase since 2019. However, the growth is uneven, with significant dips of up to 24 percent between 2020 and 2021.
The highest increase in pay transparency was witnessed in jobs related to Finance (122 percent) and Engineering (107 percent). At the other end of the spectrum, the lowest increase was witnessed in job postings in sectors like Education (16 percent) and Marketing (20 percent).
Employers in Tier 1 cities are more receptive to the idea of job transparency than their counterparts in Tier 2 and 3 cities. Delhi reported a 208 percent rise in job postings with salary information, followed by Mumbai (71 percent). Meanwhile, a decline in postings was reported in cities like Nashik and Surat.
How can companies improve Pay Transparency in India
To enhance pay transparency, companies can implement multifaceted strategies that promote openness, fairness, and employee understanding of compensation structures.
First, establish clear compensation policies, ensuring that salary determinants are communicated openly. Implement salary bands for different roles, illustrating the salary range and setting expectations. Regularly review and update compensation structures to stay competitive and aligned with industry standards.
Introduce self-service tools for employees to access and comprehend their compensation details. Conduct training sessions to educate both managers and employees on the intricacies of compensation decisions, emphasizing fairness and equity. Tie performance metrics explicitly to compensation, fostering a transparent link between employee contributions and rewards.
Encourage employees to participate in anonymous salary surveys to gauge industry benchmarks. Additionally, addresses diversity and inclusion issues in compensation, signaling a commitment to equitable pay practices. Promptly rectify any identified pay disparities, conducting audits and adjustments as necessary. Benchmark your company’s compensation practices against industry standards regularly to ensure competitiveness.
By adopting these measures, companies not only contribute to a culture of transparency but also empower employees with a clear understanding of their compensation, reinforcing trust and satisfaction within the organization.
