Embracing Transparency_ Navigating the Impact of the EU Pay Transparency Directive with Figures Technology

1. Embracing Transparency: Navigating the Impact of the EU Pay Transparency Directive with Figures Technology A major new regulation is coming in 2024 that will significantly impact how organizations in the EU manage compensation and share salary information. The EU Pay Transparency Directive aims to promote gender pay equity and fair compensation practices. It will require companies to be more open about pay scales and share information with employees. Non-compliance can result in heavy fines. HR, compensation, and legal teams need to understand what this directive mandates and how to prepare. What is the EU Pay Transparency Directive? The EU Pay Transparency Directive goes into effect in August 2024. It aims to address longstanding issues like the gender pay gap by increasing transparency around how

2. individuals and groups are paid within an organization. Key elements of the directive include: ● Requiring companies to be proactive in disclosing information about pay scales and ranges to employees and prospective hires. Obligating employers to publicly share data on the average pay and pay gaps between genders that exist within their organizations. Granting employees the right to inquire about and receive information regarding the pay of coworkers performing similar roles. It is establishing processes and policies that promote fairness, equity, and non-discrimination in compensation decisions. Outlining significant financial penalties for non-compliance with the new transparency standards. ● ● ● ● Preparing for Compliance To avoid penalties and establish fair and equitable compensation practices, organizations need to take major steps to prepare for these new regulations over the next year: ● Review and update salary band structures to incorporate market pay data and ensure internal equity. ● Establish processes for regularly benchmarking pay scales against industry standards. ● Provide secure, digitized tools for sharing salary data with relevant stakeholders. ● Train managers on discussing compensation openly and addressing potential pay disparities. ● Collect and report accurate metrics on pay gaps to identify areas needing remediation. ● Consult legal counsel to integrate compliance practices into existing HR policies and culture. Technology can streamline the work of remaining transparent while building robust, defensible compensation practices. Solutions like Figures automate band creation, centralized data, and reporting functions. Early adoption better positions organizations for the changes ahead in 2024. Figures: Streamlining EU Pay Transparency Compliance

3. Automatic job evaluations - The solution can automatically evaluate and score jobs to place them in the appropriate pay bands based on factors like skills, experience, responsibility levels etc. This removes manual and subjective assessments. Centralized pay scale repository - It acts as a centralized source of truth for all organizational pay scales. Managers and HR can access accurate, up-to-date scales to make compensation decisions. Customized pay bands - Bands can be customized to the organizational structure, industry norms and market pay rates. The system regularly benchmarks and adjusts scales on predefined schedules. Pay equity analysis - Built-in algorithms and analytics can continuously analyze pay data to surface any statistically significant pay gaps based on gender or other attributes. Automated reporting - It generates automatic reports on metrics like average pay by gender for each role/band, aggregate pay gaps, etc. to meet regulatory reporting needs. Dynamic scenario modeling - 'What-if' scenarios around policy changes can be modeled to assess their impact on equity before implementation. Mobile accessibility - Users can access pay scales, review analysis, and reports on the go through mobile apps for fast decision-making. Data security - Rigorous data security and privacy controls ensure sensitive pay information of employees is securely stored and shared as needed for compliance. Minimal IT/admin support - The cloud-based system is hassle-free to set up and maintain with minimal ongoing IT overhead. Conclusion In conclusion, the impending EU Pay Transparency Directive, effective from August 2024, heralds a significant shift in organizational practices within the EU. Geared towards addressing gender pay gaps and enhancing compensation transparency, the directive mandates companies to disclose pay information, promote fairness, and impose penalties for non-compliance. To prepare for these changes, organizations are advised to update salary structures, implement benchmarking processes, utilize digitized tools, and train personnel. Technology, exemplified by solutions like Figures, offers a streamlined approach, automating job evaluations, centralizing pay scales, customizing bands, conducting pay equity analysis, automating reporting, facilitating scenario modeling, ensuring mobile accessibility, and prioritizing data security.