In 2023, there are eight states requiring some sort of transparency related to pay. Expectations range from not allowing employers to refuse to hire applicants who don’t provide pay history or even asking ask about salary history to requiring employers to include pay ranges in postings or as requested.
Why this push and what does it mean?
Some proponents of this movement expect it to help with wage gaps and suspect it may lead to better pay equality. Others expect that pay transparency is a trend of overall clarity in culture and communication. Regardless, it's a good idea for companies to relook at their philosophy around pay and determine whether or not their practices need to be adjusted.
If your employees’ pay were to be broadcast publicly, could you defend it? Without looking at the individuals filling the roles, do you have justifications behind what you’re paying for the different positions? What is pay based on? If you look at the number of individuals filling any one job description, does any range in pay make sense (i.e., can it be justified based on years of experience, licensing, skills, etc.)? Once you step back and look at the specific individuals within those roles, does anything change (i.e., are there disparities that can’t be explained logically)?
There is a trend where employees are more centered on finding meaning in their roles, which is a good thing. We should all feel like our work makes a difference in the success of our organization. I’ve known companies who tend to “glorify” certain departments sometimes to the detriment of others. When you think about your staff, do you truly appreciate the jobs they each do and do they know that?
Now is a good time to reconsider your employees and their pay. If you are just starting to hire your first employees, it’s a great time to consider your pay philosophy and transparency. If you already have an established staff, there’s no time like the present to relook at where things stand and make sure you’re on task with an appropriate and logical pay philosophy.
Your employees will appreciate your efforts, new employees are more likely to consider employment with your organization, and if transparency laws become a state and/or federal requirement, you’re already there.