If you’re talking about pay only during hiring and annual reviews, you’re missing an opportunity to be part of the larger discussion. In fact, HR may be seen as part of the problem. These conversations are moving out into the open, and employees are deciding if they’re being paid a fair, equitable wage. You can help them make an informed decision.
Pay transparency isn’t about disclosing how much money each employee is making. It’s more about openly communicating how you determine pay scales and salaries. A culture of transparency builds employee confidence and trust.
They Can Find the Numbers. But You Can Give Them a Full Picture.
With the popularity of sites like Glass Door and inDeed, people can search by region to see how much specific companies pay for certain job titles. This is not where you want a hard-working employee to discern how much they’re valued by the company.
A survey by Mercer highlights data to support the necessity, and benefits, of pay transparency. You’ll also find tips on how to overcome common barriers you might run up against.
It’s time for companies to have, and share with everyone, a compensation philosophy that aligns with company mission and values. Discuss how you determine fair, competitive wage and salary ranges. How do you ensure an equitable approach to setting those ranges? What data do you use? Other than dollars, what’s in your total compensation package?
Soon, It’ll Be the Law
More and more states are enacting laws around pay transparency, and many companies are getting ahead of the trend to avoid a rushed, forced process. Payscale says by the end of 2023, roughly one in four workers will be covered by a state or local law that requires businesses to be transparent about their pay ranges.
Prep Your Managers, Too
While the decision to adopt pay transparency may come from executive leaders, it’s the day-to-day people managers who will need to explain it to the employees who are affected. Make sure they understand the what, why, and how of your compensation philosophy (especially how the company sets wage and salary ranges).
If official communications training isn’t in your budget, consider these approaches:
- Host a live webinar where HR leadership explains how pay transparency affects managers.
- Send out a simply worded, yet thorough, FAQ.
- Set up an online manager-only forum where they can share experiences and offer insight.
Enjoy the Advantageous Side Effects
You probably have goals to increase diversity and ensure equity within your employee population. Good news! When a company’s culture supports pay transparency, they generally see great side effects:
- Recruiting company Handshake has data that shows companies get 13% more applications from Black students when they include salary information in job postings.
- Adzuna, a job search engine, sees that when companies display salaries in job ads, they attract six times more applicants.
Compensation has always been a touchy topic, but it seems a new, open attitude is within reach. Read more about how to communicate compensation issues.
