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October 31, 2024
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Salary transparency is a hot topic that has been around the labor market for a while, many experts agree that it’ll be one of this year’s major trends. Employed and job-seeking professionals always try to stay on track with the payment range in their fields, but how can they get a better idea if many consider talking about wages a taboo or if some companies even prohibit it?
Call it a social movement or a snubbed practice that should’ve been adopted a long time ago; truth be told, salary transparency can benefit employees and companies as long as they use it for good and work together to improve work conditions.
Salary transparency or pay transparency refers to different practices in which employers provide information to employees and candidates about a role’s compensation. Though transparency seems simple, this concept takes many forms, from clearly posted salary ranges and benefits information on job listings to open discussions about wages between employees with employer support.
The gender pay gap, underpaid positions, and other problems have made employers, employees, and even authorities take action —from legislation across the US to simply foster workplace discussions about wages— toward opening the discussion about payments.
Ironically, getting paid fairly is a priority for job seekers and employees; still, they aren’t used to and sometimes not comfortable asking questions about wages, not even in the workplace with coworkers. In most cases, this is because people consider it a taboo subject. Some companies have policies that prohibit talking about pay during working hours or simply forbid salary discussions altogether, although it goes against the National Labors Relations Act.
Salary transparency confronts many obstacles. Indeed found these are the most common reasons why people avoid wage discussions:
The general feeling toward salary transparency has turned it into such a difficult situation that many state authorities have taken the matter into their own hands. Because of this, salary transparency laws that require companies to list their salaries and provide clearer information about their wages are more common.
As mentioned before, it’s known that some companies across the US have policies that prevent employees from talking about their salaries and benefits. This type of practice strengthens the hesitancy around the topic; fortunately, many states and local authorities have weighed into paying transparency laws to counteract the issue. Here are a few of the local and state governments that have required companies to disclose pay ranges:
As with many other trends, salary transparency should be used for good. Companies and employees will benefit from applying these practices thoroughly. One of the main benefits of a salary transparent culture is reducing gender discrimination and helping minorities and vulnerable groups get fair payment.
If you’re aiming to improve diversity in your workplace, you’ll have to make sure your salary ranges are balanced and clear for all your employees. Even if it comes to attracting top talent, being fairly paid is a key aspect for candidates when accepting a new job, so make sure to have clear compensation packages in your job description, as this will save you time and help you and applicants better prepare for salary negotiations that may arise.
There are companies committing to strengthen salary transparency without the assistance from local or state intervention. One success story that has gained the attention of many experts is Buffer. The social media company published a list on its website with the salary of every employee on the payroll. With this bold move, they contributed to pushing the industry forward and are making their organization accountable.
Aside from building trust, salary transparency will reduce turnover rates and increase productivity by improving team’s engagement. Some businesses remain unconvinced about becoming salary transparent, even though more studies have proven how pay transparency betters company performance. The key is to have healthy work conditions and be straightforward with your employees.
Companies seeking to increase their reach, ease their new hires, and prevent high-performers from quitting must evaluate their salary transparency status and make improvements if necessary. Here are some simple actions employers can take to increase pay transparency in the workplace.
Avoid going against any regulations or laws in your region regarding salary transparency externally and internally. Aside from saving you problems with authorities, this will ensure your jobs get more applicants by reflecting your commitment to salary transparency.
Part of the salary transparency issue is that most information is hidden or vague. Even though there are no laws in some regions about transparency, clear job postings should be companies’ first step to solve this situation. The most qualified applicants know how much their job is worth, so if they don’t see a precise wage, they won’t hesitate to move on to the next opportunity.
Another aspect that keeps employees engaged and motivated is having clear information on salaries that are determined; that way, they’ll know what they need to do to improve their pay. This will also encourage trust between employers and employees and promote equal pay for equal work.
Wage transparency keeps your employees engaged with their roles in your company, and it’s also one of the most efficient practices to monitor any possible pay gaps within your organization.
Contributed by Luis Arellano
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