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Pay Transparency Is Here. Are You Ready To Discuss It?

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If pay transparency isn’t yet a hot topic in your organization, it soon will be. Recently, several states have passed pay transparency laws, and others are planning similar legislation. These laws require employers to post salary ranges in job listings. As a result, many employers are taking steps to get ahead of these changes — often disclosing pay range information before it’s required by law.

Sharing pay ranges externally has its own challenges. But it’s also likely to mean employees will start evaluating where they fit within the organization. Is their compensation at the top or bottom of the scale? How does their pay compare with others? Is it time to ask for a raise or search elsewhere for a better-paying job?

Benefits of Pay Transparency

For employers, this new focus on pay transparency may seem like a Pandora’s Box. Naturally, this kind of openness can cause some trepidation.

However, this is also a perfect opportunity to refresh how you share pay information with employees. Choosing to be more open about compensation can actually help your organization in multiple ways. For example, with thoughtful communication, you can:

  • Attract top candidates
  • Build internal trust and retain high-performing employees
  • Create a more inclusive culture
  • Support compliance with pay transparency laws

3 Steps for a Strong Internal Communication Plan

Before you jump into tactical action, it’s wise to take some time to be sure you’re thinking about this challenge from an employee’s perspective. Here are three steps to consider as you create your pay transparency communication plan:

1. Assess Your Situation

Compensation can be complicated. Many employees may not have a clear understanding of how pay works at your company. Baseline data about awareness and knowledge across your organization will provide powerful insights as you set objectives and create your internal communications plan. If you don’t have existing research to analyze, here are several suggestions:

  • Conduct a Brief Audit: Review your communication channels to understand how pay and compensation topics are currently communicated. Focus on tone, details, level of transparency, audiences (such as department managers), and frequency. Does information need to be more accessible? More coherent? More consistent? Do people managers have access to resources that can help them answer questions effectively? Use this as a jumping-off point when developing your objectives. This audit will also help you uncover communication priorities. For example, if pay-related information is not communicated regularly, you may need to build foundational knowledge into your plan.
  • Initiate “Reality Check” Interviews: Start with the HR team — your compensation specialists. What are they hoping to accomplish with their policies and programs? What changes are they planning, if any? Next, reach out to a few employees from various areas of your organization and ask high-level questions. Quick, casual interviews like these are an easy way to confirm how your workforce views compensation. You may even uncover issues that aren’t yet on your radar.
  • Research Other Companies: Because pay transparency is a trending topic, it’s easy to find examples of organizations that are effectively tackling the issue. Case studies from other organizations can be a great source of inspiration as you develop communication tactics and messaging.

2. Craft Your Compensation Story

Pay transparency isn’t just about the “what” (actually dollar amounts). It’s also about the “how” and “why” behind those numbers. Therefore it’s essential to help employees understand big-picture ideas about pay at your company. This is where a narrative helps. You’ll want to build a story or a set of key messages that:

  • Clearly explain your organization’s approach to pay — your philosophy and policies
  • Inform and focus communication so employees clearly understand your approach
  • Provide a roadmap for people who are responsible for communication, so they deliver consistent messaging

When creating your organization’s compensation story, start with these three questions:

  • What is our pay philosophy? This should describe your company’s decision framework for compensation. It should outline the pay structure and components, including overall cash compensation, benefits, and rewards. Consider how this approach aligns with company values and articulate the level of transparency you’re committed to when communicating about pay.
  • What are the benefits of pay transparency? Whether it’s attracting quality candidates or driving a more inclusive culture, find a way to weave in your value proposition. This will help stakeholders understand the “why” behind sharing pay information.
  • What actions (if any) do you want people to take? This is where you explain how employees can learn more about compensation, such as process changes, or new ways to access information. Note: Actions may differ by audience (for example, managers versus general employees).

Remember, this isn’t one-and-done. Your compensation story should be an ongoing part of communication about compensation and rewards. Consider embedding messages into onboarding, benefits discussions, performance management processes, and more.

3. Prepare Leaders and Managers

Once you’ve established your pay philosophy and developed a set of key messages, it’s time to put it in the hands of your spokespeople: leaders and managers. Employees often turn to them first with pay-related questions. Tools, resources, and guidance will not only help them deliver the message, but also prepare them to deal with potentially tough conversations.

Set up your leaders and managers for success with the support they need:

  • Provide answers: Everyone who fields questions from employees needs to understand their communication role. They also need to know how compensation works in your company: how base salary is set, how ranges are determined, and other factors that influence these decisions (including location, role, and experience). Create topline messages, FAQs, and detailed guides to provide answers that address a wide range of scenarios and concerns. Also, be prepared to update these resources on an ongoing basis. By empowering leaders and managers to discuss pay confidently with their employees whenever the need arises, you’ll ensure those conversations are informative, accurate, and productive.
  • Provide training: Host a workshop to help leaders and managers understand how to conduct effective compensation conversations. This also provides a forum for leaders and managers to discuss issues with their peers and expand their knowledge about this important topic.

A Final Note on Pay Transparency

Pay transparency is a powerful trend that can lead to a more equitable workplace, overall. But, as new external reporting requirements become a reality, employers should expect to hear many questions and concerns from employees. Organizations that prepare to address pay questions with more open and transparent internal communication are positioning themselves for success. Are you ready?

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Adapting HR Attitudes in the Wake of the BLM Movement

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The Black Lives Matter movement, or BLM movement, recently attracted major attention. People in the United States and elsewhere ramped up their protests against white supremacy and the discrimination faced by African-Americans. They also brought awareness to the violence that too-frequently occurs when people of color encounter police.

As more people notice these issues raised by activists, human resources (HR) professionals must not stay silent on the sidelines. Changes are happening — and now is not the time to appear tone-deaf.

Large Segments of Workers Expect Companies to Show Support

Human resources executives can demonstrate the expected attitude toward the cause by showing public support. A recent survey asked people about the anticipated responses from their employers — if any — regarding the BLM movement. The results showed 89% of HR workers expect their companies to publicly speak up for the cause.

This is the highest percentage for any sector studied, indicating HR teams are especially unlikely to accept their employers staying quiet. 

Also notable: More than half of those polled expected companies to have a say on the matter across all industries. Only 47% said they expected such action from their employers in the law sector — a minority, but still a sizable percentage. In all other job categories, at least 57% of respondents thought their employers should take a public stand for the cause.

These findings reveal how crucial it is for HR professionals to facilitate early, authentic and empathetic responses at the corporate level. Social media profiles and the company’s website are excellent places to post the statement to get plenty of notice.

The BLM Movement Spotlights Wage Discrimination

When George Floyd died in handcuffs after a police officer kneeled on his neck for several minutes, activists quickly energized. They immediately sought to draw attention to the often-unnoticed hardships that many Black people face. It’s easy to agree that preventing someone from breathing was an unjustified action. Still, many didn’t realize how deep the unfair treatment goes.

Wage discrimination is a strong example. Although Black workers comprise 13% of all jobs in the United States’ economy, they fill approximately 19% of essential roles that pay an hourly rate of less than $16.54. That amount accommodates the basic needs of a four-person family.

Dissatisfaction with earnings spans to other job types, too. According to a survey of in-house counsel, 41% of respondents believed their compensation was below what peers earned. The prevalence of wage discrimination makes it easy for people to understand the topic. It also helps connect inequality to what Black people too often experience.

HR representatives should aim to start meaningful discussions about addressing and ending wage discrimination. However, they cannot stop at powerful phrases that sound promising. People have heard them for years and feel wearied by a lack of action. Taking this issue seriously means understanding how to make progress happen — even if improvements occur slowly.

Figuring out attractive salaries to offer candidates is one crucial responsibility handled by HR teams. However, they must also take the steps necessary for giving fair, appealing wages to everyone in the company’s workforce. Doing so makes a business a standout option for people seeking work. It also increases employees’ likelihood of remaining loyal to their workplace.

Running an Anti-Racist Organization Requires a Thorough Effort

Showing genuine support for Black lives means halting the actions that perpetuate discrimination. Organizations can do that by committing to operate with anti-racist ideals. Some companies responded by firing people who spoke racist slurs or engaged in similar actions. That’s a start, but it barely scratches the surface of what having an anti-racist company means.

Laura Morgan Roberts, a professor, speaker and author, explains, “To be anti-racist is to acknowledge the permanence of racism through organizations, industries and communities, and to recognize that racism is a system of disproportionate opportunity and penalties based on skin color.” Thus, anything from workplace procedures to unspoken norms could have racist undertones that initially go unnoticed by many.

Making meaningful changes starts when leaders acknowledge what aspects of their companies sustain inequality. Next, people in power must commit to promoting equal opportunities in problematic areas and within the organization as a whole. Admitting there is room for improvement is often difficult, but it’s necessary. Knowing where issues exist sets the framework for strengthening the company and doing away with racism.

Differences in perceptions may cause some HR teams and people from other departments to disagree on whether there are problems to tackle, however. A study showed that while 49% of Black HR professionals agreed racial and ethnic discrimination exists in their workplaces, only 13% of white people in HR roles did.

Those statistics emphasize why it’s so important to get feedback and guidance from the people who experience such treatment firsthand. That may mean bringing in a consultant to find the root causes of the biggest issues. Or asking team members of color for anonymous feedback about effective ways to facilitate equal treatment for all.

BLM Movement: The Spark of an Ongoing Aim

Even the most well-intentioned HR professionals cannot do all the right things to support the BLM movement. However, attitudinal shifts can go a long way in sparking permanent, positive change. People in this line of work must also remember that they’re human. They’ll make some occasional mistakes, but owning up to those errors and getting back on track is crucial to success.

Additionally, HR teams should not view ending racial injustices as a realistic goal to achieve. While they can indeed facilitate the shifts that make these issues less common, reaching higher equality levels is a long-term aspiration.

Even after making tremendous strides, company representatives will likely regularly spot areas that still need work.

And that is okay. Because the most important thing is a willingness to show consistent dedication.