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Pay transparency is here to stay and, with it, the power to retain employees, build trust, and fix inequities amongst a workforce.

While many companies have begun to adopt pay transparency as a standard practice, some states have now made it law. Both California and New York have recently passed pay transparency legislation, including the requirement that companies post job descriptions with a minimum and maximum salary range.

Buffer, a pioneer in business-culture transparency, has taken pay transparency a step further and published the salaries of every one of their employees, including executives, on their public website.

So what is pay transparency and why is it important? Pay transparency is making pay data, whether salary ranges or specific pay data for employees, available. Whether the salary data is available to employees for internal conversations or externally for the public eye, transparency is the goal.

The importance of pay transparency is evident. There continues to be pay inequities in the U.S. for women, minorities, and other marginalized groups, including those with disabilities. Additionally, companies like Buffer have shown that salary transparency increases productivity and employee satisfaction. And yet another benefit of pay transparency is attractiveness for job seekers in this very competitive labor market.

According to Builtin.com, here are 5 steps for better pay transparency:

• Determine where your company currently falls on the pay transparency spectrum, and where you want to be. Survey managers to understand what employees want to know about their salaries.
• Develop a pay philosophy that aligns with your talent strategy and culture. What do you value in new hires? Which behaviors do you want to incentivize?
• Clearly define roles and responsibilities, and use market data to set salary ranges. This helps to eliminate bias and create a less subjective pay structure.
• Conduct a payroll audit to identify and resolve salary discrepancies.
• Train managers to have proactive salary conversations with employees. There’s no way to do this right if they aren’t on board.

Positioning your company for greater pay transparency is an investment in your employees and the future of your business. Clarity has created and implemented comprehensive salary analyses and compensation projects for many of our clients. We would love to talk with you about pay transparency goals for your company and how we can come alongside you to accomplish those objectives.

Written by: Marla Monk

October 20, 2022