_{Welcome to the Have You Heard Podcast. Today's guests are Jennifer Kwong and Christie Rall, who are here to talk about pay transparency, specifically in Canada. We've had some very interesting legislation and additional conversations about that. So I'm thrilled to have you guys both here. So welcome and thanks for joining.}

_{Thanks for having us.}

_{Great. So to begin, can you maybe set the stage as to the conditions or the stakeholders that led to pay transparency legislation in Canada?}

_{Yeah. Sure. Listen, I think, pay transparency has been coming for a while, but it certainly picked up momentum in the last 12 months or so. And I think there's a, maybe, three things that have really led to this. I think first is a bit of a cultural shift in terms of what it's OK to talk about, cultural shift in terms of how we see fairness and equity, right? We know that in Canada, women make $0.89 on the dollar, and racialized employees make less than that.}

_{And I think shifting, and starting to shift that conversation into what fair and good looks like is a key piece of this, but even more specifically, we also live now in a world of a proliferation of data. So sites and organizations like Glassdoor and Indeed. We live in a world now in which compensation data is out in the public. We know in inside Employees' Minds, one of our research papers that came out late last year, you know, it's 53% of Gen Z employees say they share their Comp with colleagues, compared to 40% for those who are over the age of 35.}

_{And I think really interesting is about 70% of employees say that they know what their pay ranges are, even though you know only 20% of employers are sharing it. So the data is out there, right? The data is out there, and I think part of the pay transparency legislation is meeting the moment to drive fairness and equity, and make sure everybody has access to the data that they need to make informed decisions about their jobs and careers.}

_{Jen, what do you think?}

_{Yeah. No, I'd completely agree, Christie. The information's out there, whether employers like it or not. People are talking. And as we know in the US, there's over 30 states now with some form of pay transparency legislation. And it was only a matter of time before it came to Canada this last year, or the last couple of years actually. Four of 10 provinces have either started discussing incorporating pay transparency legislation, or have already adopted pay transparency legislation.}

_{So it's really just a matter of time before it begins to expand to other parts of Canada as well.}

_{Yeah. That's really interesting. And I think there is a business case for pay transparency because of exactly what you said. If employees are gaining this information elsewhere, you should at least try to control that narrative, and confirm that information that they're seeing online, or elsewhere, is, in fact, correct. So I do think that's an important point to make. Jennifer, you brought up the legislation, could you maybe give a kind of a general overview of the legislation that provinces have adopted?}

_{Yeah. For sure. So I believe three of the four provinces have adopted pay transparency legislation, where employers are required to post salary ranges on their job ads. They also are no longer able to penalize employees that share salary information, and they're also not allowed to ask for employees historical salary information. So when they're in the recruitment process, they're not allowed to ask for a candidate's history.}

_{That's three of the four provinces in Nova Scotia, I believe, pay transparency legislation is a bit lighter. So they actually aren't required to post salary ranges on their job ads there, but the other two aspects of the legislation apply where they're no longer able to penalize employees, and they're no longer allowed to ask for historical salary information.}

_{Emily, you said something earlier that I think is very interesting when we think about this as legislation or compliance, and also about control. And I just want to jump in there because I think there's something really, really important in what, in, you know, this terrain of pay transparency that's coming quickly across Canada. It's actually not about control as it is as much about trust. I think that it's important that we know, and know that what's top of mind for employees right now, it's financial stability. It's concerns about finances.}

_{We know that is a top two concern for employees across all demographics. And salary information is really important in terms of making robust decisions, right? And so this isn't so much about organizations kind of controlling the narrative. In fact, it is about building trust. Building trust with people you want to bring into the organization, people you want to stay in the organization, because we know that transparency drives both recruitment and retention, and it's a really critical part, in terms of the relationship between employer and employee.}

_{Yeah. Absolutely. I'm glad you pointed that out. And for those provinces that maybe are lagging behind in the legislation, is there-- one, is there a particular reason for that? And two, what are the potential risks of being behind in those discussions or in action?}

_{Yeah. There's something interesting here because I, again, I think the legislation is obviously very, very important, and the legislation is also about transparency and reporting. But I would say that this is a trend, regardless of legislation. And all organizations need to start, or should start to think about their pay practices, and kind of pulling the curtain back on their pay practices. And there's a couple of pieces here. One is data is available, so whether you're sitting in Ontario, and you're looking at jobs in BC, that data is available, and people are making decisions based on that job, right?}

_{That they can fill in the gaps with their own lived experience because the data is out there. And then secondly, I think it's really important in terms of building a culture of trust and transparency, to start to think for how do you prepare for pay transparency? So even if it isn't legislated in your province, how do you educate employees on your on compensation? How do you empower your employees to make career shifts and navigate their career pathways inside your organization, which decisions will be made, somewhat, based on pay and compensation.}

_{And so how do you start to build and drive a narrative around your career and reward opportunities in the organization? And I think, thinking about transparency is so important in anchoring that, and everybody should be doing that now, versus waiting for a legislation to come and they have to comply with.}

_{Yeah. I mean, in many cases, being proactive is beneficial, and particularly in this arena. So you mentioned trust, as well as employee retention and attraction as being some of the advantages of pay transparency. What else are some of the potential advantages to adopting this?}

_{Yeah. I think, well, mentioned retention. We know that almost 40%, or more than 40% of employees or potential recruits won't apply for jobs if there's not a pay range on the job posting. So right then and there, you have significant kind of benefits in terms of expanding your talent pipeline. I think when we talk trust and transparency, we're talking about the employee experience and morale. So building that sense of morale and engagement, those relationships between people, leaders, and leaders and employees, all of this stands to benefit from building a culture of transparency.}

_{And I think that starts, again, with getting your pay practices kind of anchored, clear, and communicating.}

_{So what about when we talk about potential challenges for organizations in adopting pay transparency? What might come up in those conversations?}

_{Compensation has been kept behind the curtain, so to speak, for the last number of years. So, you know, naturally, organizations may have some unconscious bias embedded into their processes for determining pay. So, obviously, when pay transparency becomes legislated, and the curtain opens, some companies may be forced to air their dirty laundry in public, which may pose as a disadvantage with organizations that have existing inequities in place. So I think those organizations are really the ones at risk with jeopardizing their employee trust, decreased morale, all of those things that Christie mentioned that could be an advantage with having more pay transparency.}

_{It could also be completely shattered if an organization doesn't have the right compensation infrastructure in place, and there are existing inequities.}

_{Yeah. Emily, I would say, I don't think there are true disadvantages to pay transparency. The disadvantage is not being ready for pay transparency, right? So getting your house in order, having your job architecture, your salary structures, making that clear. When that is-- when those are robust, and they stand up on their own, then transparency is a clear path forward, right? Because the practices themselves are anchored deep and fair. And I think that's a really important piece of the puzzle.}

_{I think one of the things and, potentially, a disadvantage, or maybe just a bit of a blind spot, is it's easy to think about transparency and getting your house in order in terms of pay structures, compensation, salary bands, getting that right, which absolutely, 100%, is the most important thing first out of the gate. But as Jen mentioned, there's the possibility that there's bias in other parts of the talent experience. And my mind always goes directly to performance management.}

_{How do you then make sure that you've got equitable, fair, clear, transparent performance management practices, again, built upon a structure of a really solid job architecture. I think those are some of the disadvantages of organizations have if they're not seeing around corners, and they're thinking just about compliance as a key part of transparency, versus the systems and structures that drive fairness and transparency in your organization. And then, the narrative, and the communication, and the culture around that.}

_{Because, again, I think, it's really important to think-- you have to think about the talent lifecycle, and all of those flow on pieces because trust is easy to break. And so if the experience is clear and transparent in one part of the employee life cycle around, OK, I understand why pay bands are, but now I don't think that I'm getting promoted fairly, or I'm getting rewarded fairly year over year. Again, it doesn't it doesn't matter, right? Because the trust is so easy to break.}

_{So I think employers taking a step back, getting your job architecture right, getting your foundations right, that making sure you're looking at the lens of fairness and equity in all parts of the talent life cycle are so, so, so critical.}

_{Yeah. And I'm glad you also brought up the communication piece because, I think, that's another-- part of it is not only having the correct policies and architectures, as you mentioned, but also once this becomes more apparent to everyone, how do we communicate that? How do we fess up to some of these shortcomings? How do we explain how we make decisions, if that isn't already available.}

_{So I think communication is always an important piece, but, certainly, in these conversations.}

_{That narrative is so important. And, again, when we talk about the employee experience, employee morale, I mean, employees want to work for organizations that have these strong sense of purpose and policy, right? So it's a key part, again, of building that culture and driving retention. The one other thing I'd call out here is when we talk about communication, it's so important to think about we'll have a lot of people leaders in an organization that maybe haven't had to communicate, salary information for pay bands, or aren't used to fielding these questions.}

_{And so one thing that I think organizations can really think about is, how do you equip your leaders, right? How do you drive a culture of transparency through your people leaders, and your executive leaders, and how do you build that muscle? Because, again, so you get the foundations right, you look at the end to end talent ecosystem, and then you have to look at equipping all the people in the organization and leaders in the organization to actually support drive because they're the first line of communication, right?}

_{And that's that being a transparent leader is a skill set. And I think that's something that kind of sits on top of this kind of pyramid of actions.}

_{Yeah. Absolutely. So we have given a little bit of advice thus far, but for those organizations in Canada that are maybe going through this process now, or, perhaps, they're in a province where it has not yet been adopted, what are some maybe top line advice items you could give to those folks working in HR at those organizations?}

_{Yeah, I think there's kind of two key things here. So the first one is build trust. Prepare for pay transparency, whether in a province where it's legislated, or a province that it isn't, employees are paying attention, and it's coming. So educate your employees on your compensation practices. Empower them to navigate their career through the organization, and really think about transparency in terms of career and rewards, right? So that's also looking at your performance management cycle. But most importantly, I think number one is you've got to get your house in order.}

_{So as Jen mentioned, transparency is easy when the systems and structures are set up correctly. So you need to ensure rigor in your pay practices, looking at job architecture, and your salary structure, then you need to expand that into your performance management experience, and how those decisions are made. And those are the two kind of key things that I think employers need to do now, again, regardless of whether you're in a province with pay transparency legislation or not. Jen, what are your thoughts?}

_{Yeah. You know I would echo your sentiment, Christie. I think those are some definite top of mind things that employers should consider. If we're looking at a more tactical perspective here, I think, organizations should also look at conducting a really thorough pay equity analysis, just to highlight any gaps that exist in their organization. And then if it does highlight that there are significant gaps, then they can make sure to address those in the short-term and remedy that.}

_{Yeah. So what about multinational companies that have some employees in Canada, but elsewhere. How does the-- well, one, how does the legislation, potentially, impact them? And should it matter if you, like you said, if you have your house in order, then it shouldn't necessarily matter where your employees are, that you have this fair equitable system. But is there any additional considerations for maybe those multinational organization listeners?}

_{Yeah. I mean, listen, I think the pay transparency train is moving quickly. And as Jen mentioned up front, pay transparency legislation is in across the United States. It's moving across Canada. There's legislation in Europe. So I think thinking globally about this is really important. But, again, I think you should be thinking globally and holistically about this. So what is your pay transparency narrative? What is fairness and equity look like across all of your employee bases, right?}

_{I think it's important to kind of zoom out and think about this from the end perspective, and not just kind of state by state, province by province, location by location. It is our point of view that if you have a position that has a remote recruitment, in the sense that like the position is located in BC, but you will-- it's a hybrid or a virtual work world, and you can recruit talent from anywhere else in the country, or anywhere else in the world, then you have to abide by the legislation in BC.}

_{So I think it's going to bust through some of those boundaries in terms of how we think about where talent is, and how we engage with talent. And my encouragement and nudge to kind of multinational organizations is you need to think about this, again, globally, or wherever your footprint as an organization is, because, again, employees have this data. They can look and see what's the salary band in Europe based on, and then make decisions whether they think it's fair or unfair. And those decisions are going to happen at the individual level.}

_{So the more you can get ahead of the narrative around your compensation philosophy structures and decisions, then the more that narrative from the individual to the organization is the same.}

_{Right. So tons of good information here. I really appreciate everything that you guys have had to offer. If our listeners did want to find some more information about Canadian pay transparency, where might they go to find that?}

_{Yeah. It's great. Please go to our website mercer.com. And we have a page transparency section launching on the website, and we're always happy to engage, ask questions, help brainstorm, and think through how you meet the moment because I think it is a really important moment in terms of building trust, in terms of organizations impact on society, and organizations relationship with the people, both around, and inside.}

_{Great. Well, again, thank you guys so much for your time. I appreciate this. I think it was a very valuable conversation.}

_{Thank you.}

_{Our discussion today touched on legislative actions in Canada and shared a high-level summary of Mercer’s understanding of the requirements as consultants. Mercer encourages listeners wanting to know more about the legal requirements relating to pay transparency or how those requirements might apply them to consult with their own professional advisors and legal counsel. Thank you again for listening.}