Z’s salary transparency revolution
Diversity and inclusion August 23, 2022
Fairness, openness and trust - that’s what Z hopes to champion by introducing pay transparency.
A new remuneration initiative, launched this month, intends to help close pay equity gaps within the energy company’s 500-strong workforce and boost the number of relevant applicants to job adverts.
“Not a lot of private sector companies share salary bands in their recruitment advertisements and job descriptions. As an employer, we want to show that we’re open, honest, fair, and not afraid to have those conversations about money. We’re hoping that the leadership Z is showing in this space will have an impact not just internally, but also out in the market,” says Z Talent Acquisition Advisor, Sophie Clarke.
Under the new strategy, the company’s 500 employees can clearly see what salary band their role fits into and where their pay sits within that band and why. This empowers them to have discussions with their managers about the skills and capabilities they need to move up, and brings accountability to the company’s commitment to pay equity.
Z is actively encouraging its workforce to have constructive, data-led conversations about remuneration. “Money can be an uncomfortable subject for a lot of people to discuss. This helps to normalise and break down the barriers to those salary conversations”, says Sophie.
“We believe that this gives a starting point to people who might otherwise be less likely to negotiate. It creates a more level playing field and encourages more open conversations.”
This transparency extends to prospective employees, with salary bands now quoted on job advertisements. “At the moment it’s a really tight labour market everywhere, so this helps keep us competitive,” Sophie says.
“There are studies that show that candidates are less likely to apply to a role if there’s no salary information disclosed. This helps us remain an employer of choice and a leader in the market.”
Z’s salary bands are set higher than the New Zealand average for roles in the sector, and undergo rigorous annual reviews in which every employee’s remuneration is reassessed to ensure it remains competitive and equitable. Sophie says this is particularly important right now as Aotearoa grapples with rise in inflation and cost of living.
The company benchmarks its remuneration to the upper quartile of the market, using data from Ernst and Young. This means the midpoint for each salary band at Z is higher than at 75% of comparable employers.
“We have a very robust remuneration policy and remuneration review structure, and this increased transparency builds on that, and builds trust internally. There’s also an aspirational aspect to it. Development and growth for Z’s people is really important, as is thinking ahead to what a person’s next role might be. Anyone can access all the position descriptions in the company and see the competencies of each role – and now we can also see what the salaries are. It’s another step in that growth and development.”
Z has committed to closing its gender pay gap by the 2024 financial year and believes that pay transparency is another step to help make that happen.
The company is also one of the signatories for the Mind the Gap initiative, which is comprised of 50 New Zealand companies working towards pay equity, and has pledged to make data about gender pay gaps publicly available.
Z’s latest annual report shows a gender pay gap of 6.3% between its male-identifying employees and female-identifying employees. This is better than the New Zealand average disparity of 9.1%, as reported by StatsNZ. Women make up 45% of Z’s executive team, which is also a higher proportion than the market average.
“Transparency is another important tool in reducing pay disparities, alongside the other remuneration structures Z has in place,” says Sophie.
She says the feedback so far has been largely positive, though the company acknowledges that pay transparency can be a cultural adjustment for some. She says she has already noticed that they’re attracting more suitable candidates for advertised positions and is getting positive feedback from candidates and hiring managers.
“This is really consistent with our values of trying something a bit brave and standing out, encouraging people to speak up, and having that side-by-side kōrero about how we remunerate our roles.”