Building a Transparent Workplace
Pay Transparency Laws started working their way into policies in 2020 and since then, have been spreading across the country rapidly. They aim to foster transparency and fairness in the workplace by encouraging open discussions about compensation. This can lead to greater employee trust, morale, and engagement. While there are a lot of opinions about these laws, I personally, am a big fan. They force businesses to take a look at their pay structure, promote pay equity, AND save time in the interview process for both candidates and the business.
A friend of mine was applying for jobs recently and had a few great interviews with one company. At the end of the interview process they rejected them citing they were at the higher range of the salary range listed and the company could not afford that. Obviously that was incredibly disappointing but also confusing. Why publicly list that you are willing to pay a salary amount that you are in fact not? Think about how much time (and money!) was wasted on putting my friend through multiple rounds of interviews, just to go back on criteria that was listed up front.
When it comes to prepping your team to list good faith salary ranges in job postings there are some things you should be thinking about in advance. It’s not just your candidates that will see your posting, but the whole team. This is a great time to either evaluate or set compensation ranges for each role. This can be done by doing a compensation audit and adjusting your team’s salaries if needed. You want to make sure these ranges are broad enough for varying experience, but small enough to provide growth as they move up in their careers.
When determining the salary range for an opening, make sure it’s competitive, reasonable, and falls within your new compensation ranges! Where someone falls in those ranges can be determined by years of experience, skill level, accreditations, accomplishments, etc. When interviewing candidates I always like to reconfirm they are comfortable with that range. Many states are prohibiting employers from asking job applicants about their salary history. This helps prevent the perpetuation of pay gaps based on past compensation and encourages employers to determine salaries based on job requirements and market rates.
A big fear I see in employers around this law is that their team will see other members salaries, and demand equal pay for either different roles, or maybe they have less experience. Let’s hone in on the transparency part here- by having your ranges in place, you can clearly explain the why behind how salaries are calculated. Different responsibilities are paid differently, while other factors such as years of experience, degrees or certifications, or performance play a part as well.
Companies that demonstrate a commitment to fair pay and transparency attract and retain top talent who feel valued and fairly compensated, and foster a more equitable workplace culture.
Navigating pay transparency laws requires thoughtful consideration and proactive steps from employers. By setting clear salary ranges, conducting compensation audits, and promoting transparency in pay practices, businesses can not only comply with legal requirements but also create a more equitable and engaged workforce. Embracing pay transparency can lead to greater trust, morale, and retention among employees, ultimately contributing to a more positive and productive workplace environment.
