- Pay transparency is growing in importance ethically and legally.
- Implementing pay transparency can help companies attract and retain top talent, reduce recruitment costs, foster trust, and spot pay equity issues.
- Best practices for employers include being honest about compensation ranges, being open about policies and procedures, and conducting regular employee surveys and reviews.
- Taking steps to create a pay transparency policy demonstrates respect for employees and can bring benefits in performance and retention.
Listen: Don't fear pay transparency—embrace it.
Pay transparency is a hot topic in HR circles these days. You may ask, “what is pay transparency”? Pay transparency involves openly disclosing current and prospective employee salary information. It's a hot topic because more and more states and jurisdictions are passing laws that require employers to share salary ranges with their employees or the public. There also has been controversy around employers' attempts to use overly broad or lowered salary ranges to avoid revealing their true pay structures.
Even if your company is not impacted by these laws right now, embracing pay transparency is a smart move. Why? Being open about how pay is determined is one of the key ways to attract and retain top talent. In fact, recent research has shown that job seekers are more likely to apply to job posts that disclose salary, and this transparency has also been shown to reduce recruiting costs. What's more, clarity and openness around pay helps foster an environment of trust and fairness between employees and employers and can highlight pay equity issues that need to be addressed.
Below are three best practices on pay transparency you should know:
1. Be honest about compensation ranges
You should also be transparent about any bonuses, incentives, and employee benefits your company offers as part of its total rewards package. This helps candidates compare job offers, make informed decisions, and prevent misunderstandings around compensation down the road.
Pay transparency starts with honesty. HR leaders and hiring managers should give a realistic range of salaries for their jobs so that applicants know what to expect. This range should give you enough wiggle room to adjust salaries based on experience, qualifications, or other factors but not be so broad that it obscures what you've budgeted for the position. If you're unsure what a market-competitive salary range looks like for a specific role, check out resources based on salary data like Aquent's marketing, creative, and design Salary Guide to help.
2. Be open about pay policies and procedures
Another important aspect of pay transparency is making sure that employees understand your policies and procedures when it comes to pay. This includes discussing how raises are determined, who makes decisions about promotions or salary increases, and what criteria need to be met for employees to be considered for a raise or promotion. Not only does this help set expectations around performance metrics, but it also ensures that everyone knows what they need to do to work toward higher pay or to get to the next level within the company.
3. Implement employee surveys and reviews
It is essential to conduct regular employee surveys and reviews to support and advance pay transparency in your workplace. Employees can use these surveys to provide feedback on their experiences with the company, including salary. Then, areas for improvement can be addressed quickly and efficiently. Furthermore, these surveys allow you, as a leader, to get a pulse check on how satisfied your employees are and can be part of a more extensive equity audit.
Reap the benefits of pay transparency
One of the many benefits that pay transparency offers is being a vital tool for attracting and retaining top talent. Clarity and openness around pay help foster an environment of trust and fairness between employees and employers and can highlight pay equity issues that need to be addressed.
Pay transparency is more than just sharing compensation ranges and being clear about pay policies. It also requires creating an open and honest workplace where everyone feels comfortable discussing salary issues without fear of retribution from managers or colleagues.
We know first hand, making pay transparency a reality takes time and commitment. At Aquent, we're taking real steps to make a global pay transparency policy happen and that requires time, thoughtfulness, and resources. We believe it is worth it because companies that embrace salary transparency demonstrate that they respect and value the contributions of their employees—and can expect to see big benefits in talent performance and retention as a result.
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