As People teams brace for waves of pay transparency laws to come into effect across the US, HR leaders acknowledge current levels of compensation transparency are low.

As calls for pay transparency rise, 54 percent of People leaders report pay bands are known only to HR and finance.

Also, 25 percent of employees know the pay band for their job level, while only 9 percent have access to the pay band for the next level up.

There will be increasing pressure on companies to change this, and quickly: Previous research from Lattice revealed that 67 percent of US employees and 64 percent of UK-based employees want more transparency from their companies about pay practices, while over half of employees across the US and the UK said that they want to know what everyone as their organization is paid. 

Lattice has released its annual State of People Strategy report, shedding light on where HR priorities have shifted, the trends behind high-performing teams, and the biggest challenges facing People teams as they work to retain and engage top talent amid economic uncertainty. 

 

What else did the State of People Strategy report find?

Nearly two-thirds of HR leaders are prioritising retention over talent acquisition, whilst 83 percent of teams are investing either “somewhat” or “significantly” more into retention than they have in the past.  

Also, 86 percent of HR teams noted that they are putting more effort into employee engagement this year than they have done in the past.  

 

Hybrid work is here to stay – and going better than we think   

While headlines might highlight the continued push and pull between employees and organizations around returning to offices, our research underscored that hybrid and remote working policies will continue to dominate into 2023.

Half of the respondents expect to maintain a remote workforce of 50 percent or more over the next 12 months.

And, nearly one in four expect to maintain a 90-100 percent remote workforce.  

And there is evidence that hybrid work is working. Companies with a 90 percent remote workforce reported being just as happy with manager-employee facetime as those with a 10 percent remote workforce. 

Of those with facetime concerns, engagement and culture, not productivity, emerged as the primary challenge. 

 

Connecting compensation and performance   

With pay transparency on the rise and financial security top-of-mind for employees, clearly linking employee performance to their compensation has never been more important. HR leaders agree, but admit they are not doing enough.

A staggering 83 percent of HR professionals believe compensation should be linked to performance.

Yet, 72 percent acknowledge they could improve efforts to link the two in employee evaluations, and 27 percent admit they need to do a lot more.  

Putting in work here is worth it, though, as two-thirds of companies who reported a good or great connection between performance and compensation had more engaged workforce, while only 11 percent of companies with a weak or no comp-performance connection said the same.  

 

DEIB is a top priority, with bias in performance reviews taking centre stage 

DEIB surged in priority after a dip in 2021, rising from #6 to #4 on the priority list for People teams – with addressing bias in performance reviews emerging as a top concern. 

Employee sentiment validates the urgency here: 51 percent of US employees felt there was bias in performance/compensation reviews, and nearly a third said their organisations were not taking adequate steps to address it.  

 

What does the future look like?

The past year brought new and continuing challenges for HR professionals. Even as many companies found some sense of stability within hybrid or remote working models, turbulent market conditions meant budget cuts across HR teams – and in some industries, mass layoffs. 

Through it all, employees continued to reassess their relationships with their work as work-life balance and managing burnout remained top priorities. HR teams were at the centre of addressing the ripple effects of these trends in the workplace and helping ensure employees and businesses are set up to succeed.  

As organisations brace for more change, Lattice’s report provides business leaders and People teams with insight into how to address some of the bigger challenges facing HR today while remaining focused on employee engagement and retention. 

 

 

 

 

Amelia Brand
Amelia Brand

Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.