The Push for Pay Transparency

Opening a Dialogue about Compensation

• From the perspective of an employer, the primary reason for not disclosing salaries is because they are able to negotiate with employees within their control and provide compensation on their own terms
  • Some companies even make it a policy to not discuss compensation with others, and even pose the risk of termination if employees discuss their pay with each other. However, this creates a fear driven mentality within employees that lacks accountability for pay equity.
  • A lack of pay accountability, and a closed door policy towards compensation also leaves a lot of room for bias and discrimination. While this is not the reason that companies keep compensation disclosed, it has become a resulting factor.
• From the perspective of an employee, there are generational norms when it comes to being open about compensation and creating a dialogue around it. Many employees are unprepared for how to handle pay transparency because of a lack of education surrounding it. 
  • While some employees have personal reasons they may not want to talk about the salary, it is information that job seekers are curious about to know if they are being paid fairly. 
• There are two distinct groups when it comes to communication and pay transparency: internal and external.
  • Internal communication is how the company interacts with its own employees, developing a strong culture of trust and internal mobility,
  • External communication is how the rest of the world knows about where the company stands on pay transparency. This includes disclosing compensation on job postings, letting consumers and vendors know about pay transparency policies, and also making that policy clear to competitors.

Generational Compensation and Social Media

• There is a generational divide when it comes to talking about compensation. Younger people are much more open to talking about their salaries with each other than older generations.
  • Compensation can create a sense of self-worth, and that can be a challenging conversation for people to grapple with if they feel they are being over or underpaid.
  • There is also the awkwardness that comes with someone they work with being paid more or less than them, and what impact it could have on that relationship.
• Social media is also opening up the conversation about salary transparency. Younger people, who will soon become the largest workforce generation, are very comfortable and transparent on social media, and that transparency extends to conversations about money and compensation.
  • There are even TikTok accounts where creators ask random people on the street what they do for a living and how much they make.
• In addition to social media, there are also salary sharing websites, such as Glassdoor, which provides a glimpse at how much companies pay for positions compared to their competitors. 
  • The larger the organization is, the more likely people are talking about that company and how much employees are paid.

Benefits to Embracing Pay Transparency

• When employers embrace pay transparency and open a dialogue about compensation, it builds trust between the company and its employees, and that trust can extend to the consumer brand as a whole.
  • How companies treat their employees has become part of what people pay attention to and how consumers choose their products.
• Transparency can also create a competitive advantage compared to other companies, and this can help with employee retention and internal mobility. 
• For leaders, embracing an open conversation about compensation also shows that they are able to adapt to change in a positive way and move their company in a more transparent direction. 
• Being open about compensation can also attract more qualified talent because companies are establishing that trust upfront. 

Pay Disclosure Laws

• Compensation disclosure laws fall into two main groups: disclosure under certain circumstances and disclosure upon request. 
  • Some states and cities are moving towards requiring compensation ranges in job postings.
• To prepare for these salary disclosure laws, companies can take a step back and think about if their compensation is equitable, and if they are paying fairly across all roles in the organization. 
  • Having data, and doing a pay equity analysis, can prove to employees that companies are taking the law one step further, and creating further accountability in the way they pay their employees. 
  • Companies can also create an equity plan, to figure out a way to become equitable, or be even more fair than they already are, and prepare for the future, which could be national pay transparency.

Shifting to Pay Transparency

• Initiating a shift to more pay transparency across an organization is a tag team effort between the talent acquisition team, recruiting, marketing, and HR. 
  • It’s important to think about all facets of how this policy transforms the company and the implications. This includes what the marketing team can legally say, how compensation can impact the company financially, educating employees internally, offering technical support, and more.
  • Executive leadership also needs to be educated about pay transparency, and understand the magnitude of it.
  • Organizations as a whole need to see the big picture and how pay transparency impacts not just their company, but their industry and the workforce as a whole.
• It is very important for companies shifting to pay transparency to have clear communication, setting expectations, and preparing employees at all levels. 
  • This communication also includes training and clarity so managers can reinforce and support this transition, and be prepared to answer questions about why some employees get paid more or less than others (based on location, skills, experience, etc.)
  • Providing logic without communication makes these practices look unfair, so communication is the key to getting everyone at the company on board with pay transparency.
  • Managers are going to need to be prepared on how to handle tough questions about compensation and be able to handle these situations. 
• As salaries are becoming more transparent, there is a migration of talent. 
  • Many employees are going to be chasing the top salaries that they can, and that is not necessarily sustainable in the long term. It will take companies time to adapt and prepare for complete transparency when it comes to compensation, and adapt to these changes.
  • This is the opportunity for companies to look at what value they can provide to talent other than compensation, and be genuine about it. 
• Many recruiters support some form of pay transparency, and job seekers often welcome that communication, so now the hard part is making the change to putting it into practice. 
• Ms. Calli is the President of RecruitmentMarketing.com which is a resource for companies, helping them to build towards pay transparency.
  • RecuitmentMarketing also goats conferences and panels about recruitment and offers free resources on their website 

Julie Calli Background

• She began her career as a Marketing Manager for a number of organizations, including 6FigureJobs, HealthPlanOne, and Sandviks AS
• Ms. Calli went on to serve as the Chief Marketing Officer for Recuitics
• Currently, she is the President of RecruitmentMarketing.com

Contact

• Julie on Linked In: https://www.linkedin.com/in/juliecalli 
• Julie’s email: julie@recruitmentmarketing.com