Achieving pay transparency is a journey, and one with multiple destinations that depend on your company’s goals. But it’s a journey you can’t choose to opt out of if you want your company to succeed.

We’re in an employee’s market right now. Candidates are coming to the interview already armed with expectations around salary. Because of open forums like Glassdoor and articles in the local papers, pay range expectations are out there. It’s no longer in the best interest of the company to keep pay information a secret.

However, depending on the state of your company’s pay processes, achieving pay transparency can be tricky. For instance, you don’t want to decide tomorrow to reveal everyone’s salaries if you haven’t created standardised pay ranges for your jobs. Doing so would likely lead to a mutiny.

This doesn’t mean that you shouldn’t strive for pay transparency. There are several pros and cons to consider:

Pros:

  • It builds trust with employees.
  • Pay transparency has been shown to reduce gender pay gaps.
  • It creates conversations about career development that can help companies retain their employees for longer.

Cons:

  • It can be challenging to satisfactorily discuss pay inequalities even if they are justifiable.
  • Pay transparency also requires performance transparency which may lead employees to feel more (or less) competitive.
  • It can lead organisations to flatten pay, removing incentives for high achievers to create equity but inadvertently resulting in lowered performance.

The key to achieving pay transparency successfully is to be aware of the pitfalls and plan your company’s path to meeting your goal.

 

Your Road to Pay Transparency

The first step is assessing where you are in the pay transparency journey. Do you have internal salary structures? Are they still competitive or do they need to be updated? Do you share them with your HR business partners and managers? Do employees know these ranges or even where they fit within them?

Second, decide where you want to be. Maybe at the moment it doesn’t make sense for your company to achieve full transparency. Pick a destination on the journey and start planning how to get there.

Make any changes you need to in order to start your transition. If you haven’t yet created pay ranges for all of the jobs in your company, start there.

Begin working your way to your pay transparency goal. Be prepared to connect with your employees to answer their questions. Watch for changes, good and bad, within your company culture. Guide your company carefully through this process.

There are likely dozens of different ways to go about achieving pay transparency. Every company is going to have their unique challenges. The main point to remember is: If you don’t guide your company’s conversation about pay, someone else will. So, why not take charge and control the narrative?

Contact us and let’s discuss your company’s total rewards. When was the last time you’ve audited them? Do you recognise the meaningful adjustments to retain your top talent? Let’s identify opportunities to improve your company’s position to attract and retain better talent.