Compensation & Benefits

Pay transparency in Switzerland: from privacy to open dialogue

Salary is one of the most important incentives for people when it comes to accepting or not accepting a job. For this reason, this article focuses on this aspect of compensation benefits and specifically addresses the current topic of salary transparency. There is no doubt that various other factors play an important role in addition to salary, such as a good work-life balance.

In Switzerland, the topic of salary transparency has become increasingly relevant in recent years. Historically, the disclosure of salaries has long been a sensitive topic, as Switzerland has a traditionally strong sense of privacy and discretion with regard to financial matters. However, the younger generation is breaking its silence on the subject of salary the longer, the more.

The future prospects for salary transparency in Switzerland are promising. More and more companies are recognising the importance of fair pay and equal opportunities and are actively promoting greater transparency. There is also a growing awareness of the issue in society, which is leading to an increased demand for salary transparency. A new rule on salary transparency was recently introduced across the EU. From 2027, all European companies must declare the starting salary and/or at least the salary range for open positions. This means that companies in Switzerland are also under pressure to act. Some are already pioneers, such as the Zurich public transport company VBZ, which already communicates the salary range in its job advertisements.

Challenges, opportunities and risks of salary transparency

The implementation of salary transparency harbours challenges. It requires a rethink of corporate culture and a willingness to recognise and address existing inequalities. It will continue to require efforts from government, companies and society as a whole to create a fairer pay landscape.

The opportunities and risks of pay transparency can vary greatly depending on the company and its workforce. Therefore, the pay systems of the future must not only be more transparent, but also more employee-centred and individualised. Only then will you secure a substantial competitive advantage in terms of employer branding, retention management and talent attraction. After all, remuneration is still the main attraction factor.

Concrete recommendations for action

1. Create clear guidelines: Salary transparency only adds value if the system behind it is also comprehensible. Define standardised criteria for setting salaries for all employees. This not only ensures fair and comprehensible remuneration, but also promotes employee satisfaction and trust in the company. Clear guidelines avoid potential discrepancies and increase employee motivation.
2. Create transparency: Give your employees a transparent insight into the salary bands so that they can make comparisons. This transparency creates a sense of fairness and motivates employees as it forms the basis for open communication. Employees can better assess their own performance and understand how their compensation compares to others in the organisation.
3. Use technology-supported analyses for maximum transparency and fairness: Tools such as SAP SuccessFactors Compensation support your HR in providing a reliable basis for objective salary planning decisions. By using such technologies, salary data can be analysed and evaluated more efficiently. This not only leads to fairer decisions, but also enables salaries to be adjusted more precisely to individual services and qualifications. The use of Technology thus makes a significant contribution to increasing efficiency in HR and supports the long-term satisfaction of employees.

Summary & key messages

Salary transparency helps to promote fairness and equality in the workplace. By communicating openly about salaries, companies can counteract discrimination and injustice. Transparency creates trust, motivates employees and enables fairer pay. Regardless of whether you decide in favour of or against communicating salaries more transparently in your company, it is important to take a close look at the topic of salary transparency - not least because of the new EU regulations, which are likely to apply to Switzerland in the coming years.

Outlook for the next Specialist articles

Having looked at the challenges and opportunities associated with salary transparency and its impact on Talent Management, we are now focussing on the development of Performance Management. The classic approach of management by objectives (MbO) is at the centre of our discussion. In the upcoming Specialist articles, we will shed light on the current challenges of this approach, present innovative solutions for the future and provide concrete recommendations for action to establish a modern and effective performance management process.

To the technical articles

• Turning point
• Recruitment Management
• Onboarding
• Development & Learning
• Performance Management
• Succession Management

Sources

• https://www.faz.net/aktuell/karriere-hochschule/buero-co/studie-juengere-sprechen-offener-ueber-gehalt-17596761.html
• https://www.nzz.ch/wirtschaft/das-lohntabu-ist-am-verschwinden-ld.1782694
• https://www.nzz.ch/wirtschaft/jemanden-das-ruebli-vor-der-nase-zu-halten-zeugt-von-einem-voellig-veralteten-menschenbild-zwei-firmen-erzaehlen-von-ihren-erfahrungen-mit-lohntransparenz-ld.1768916
• https://www.weka.ch/themen/personal/lohn-und-gehalt/lohnfindung/article/lohntransparenz-die-vor-und-nachteile-fuer-die-praxis/