Half of employees have no problem with communicating openly about their pay package
April 25, 2023
Around half (46%) of European employees do not regard communicating openly and transparently about the content of their pay package as a problem. A quarter prefer to keep this to themselves and 30% do not really have an opinion on it. Croatians are the most candid (59%) about their pay slips and Danes the most reluctant (38%). This is shown by international research into remuneration by SD Worx, the leading European HR and Payroll Provider, covering 16,000 employees in sixteen countries.European companies will soon be subject to new legislation, which will involve employers offering more openness about pay packages, thus making it easier for employees to compare salaries – and also revealing any pay gap.
Transparent communication about remuneration and a personal package of benefits are increasingly high on the agenda for both employers and employees. The ongoing war for talent and the increasing focus on personalisation and well-being are leading to an increasingly flexible remuneration scheme. Employees are more often looking for a personalised and dynamic pay package that matches their financial expectations and their position in life, and that also contributes to a healthy work/life balance. Employers are increasingly responding to this. There is also an increasing demand for transparent and, above all, clear communication on this topic.
For example, half of the employers surveyed already communicate openly and transparently about the reward policy applied and any pay packages. Polish and English companies (61%) in particular implement a transparent policy. In contrast, 20% of surveyed employers claim to prefer to keep this information private, with the most striking figure in Norway (30%).
On the employee side, almost half (46%) have no problems communicating openly about their pay package. Just under four in ten employees (38%) effectively know what their closest colleague in a similar position earns. In Switzerland (43%) and Belgium (41%), employees are the least aware of what someone else’s salary is. There is not yet a culture of talking openly about pay.
Clarity versus complexity
The pay slip itself is also a problem for some people. On average, 64% of the respondents surveyed claim to understand their pay slip fully, while 14% do not always find it easy to do so. 27% prefer to keep a neutral stance. Locally, it is mainly French employees (23%) who do not always understand their pay slips. Employees, who have the least difficulty understanding their pay slips, are Finns (76%), closely followed by Norwegians (74%) and Swedes (70%).
Bruce Fecheyr-Lippens, Chief People Officer at SD Worx: "The complexity of the pay slip is often linked to the complexity of the local legislation. Our Payroll Proficiency Index shows that this has a major impact on the payroll process. The type of remuneration and the variations in available (fringe) benefits also differ depending on the type of company and sector, and this certainly does not make things easier. In our mysdworx app, we therefore present the pay package in a comprehensible manner, in addition to the classic pay slip with all the details. We also like the fact that employees are more and more offered the choice to put together parts of their own pay package, based on their own preferences. For example, companies are responding to the increased personalisation of the employee-employer relationship."
Expense allowance the most popular benefit
While some employees will opt for more leave days, others are more likely to opt for extra financial rewards.
The number of types and composition of fringe benefits also differs from country to country and company to company. For example, just under one in four (23%) employees claim to have the option of putting together their own benefits package within a certain budget. Divided by country, it is mainly Irish employees who have this opportunity (44%), followed by the United Kingdom (33%), Poland (30%) and Italy (27%).
The most used benefit is the general expense allowance: this is included in the pay package for 40% of the surveyed employees, followed by supplementary social security (38%) and leisure-related benefits (36%).
The benefits that are ultimately still included in the pay package vary from country to country. Finns, for example, are at the forefront when it comes to health and well-being benefits: 64% of Finnish employees receive them. Perhaps this explains why Finns, according to the World Happiness Report 2023, are the happiest people in the world for the sixth consecutive year. Belgium is the leader in terms of mobility benefits (57%).
The most coveted fringe benefit that we would like to add to the pay slip appears to be premiums, bonuses and commissions (79%). A third (34%) of employees claim to have this as part of their salary package.
But can we yet see the wood for the trees when expanding the pay package and do we yet know exactly what we shall receive at the end of the month? As it turns out, the situation in this regard does not seem so bad. On average, 61% know exactly what the pay package entails. Finnish employees score the highest (74%), followed by Croatian (73%), German and Irish employees (66%). What is striking is that a quarter of the French still do not fully know what their salary includes, 43% of them say they do know, while 32% have a neutral stance in this respect. In the Netherlands, too, 21% of employees do not know the full pay package, compared with 46% who do know.
"A comprehensive pay package is great, but it can sometimes become confusing. An employee benefit statement can help with this", concludes Bruce Fecheyr-Lippens. "This provides employees not only with a detailed overview of the personal reward package, but also clearly indicates the value of each component. The total value of such a personal package is also often greater than expected, so knowing the true value of their package leads to extra appreciation and motivation. This also benefits the loyalty between the employee and the employer."