How Does Pay Transparency Impact You?

How Effectively is Your Company Handling Pay Transparency?

And How You May Be Unintentionally Impacting Your Recruiting and Retention Effectiveness of Top Talent
 
As we partner with our clients to understand their 2024 – 2026 business plans including their hiring needs, we ask our clients to name the top 3 challenges they are facing in their business.  The challenge that consistently shows up in the top three pertains to their ability to hire and retain top talent in a competitive, ever changing business environment. 

When we dig deeper into their workforce challenges, companies bring up common issues including rising costs of benefits, impact of minimum wage laws, impact of the retiring boomers, decreases in the overall talent pool, the impact of AI, and the overall culture of their current workforce.  When we asked companies how they are addressing the impact of pay transparency, we discovered they may have unintentionally created some of their own challenges.
 
Over the last several years, the federal government, states, counties, and cities have passed workplace legislation that was primarily intended to protect employees and create equality to bridge wage gaps. 

While the intent was meant to have a positive impact in the overall workforce, implementation at a company level without a strategic action plan may have created unintended consequences.  As the topic of pay transparency is gaining momentum across social media channels, now is the perfect time to evaluate where your company is headed in 2024.
 
What is Pay Transparency?
Pay transparency by definition has changed over the years.  It includes but not limited to:

• Pay secrecy policies – Companies restricted an employee’s ability to discuss wages with other employees.
• Salary history bans – Many state and local governments passed laws prohibiting employers from considering a candidate’s salary history when making hiring or compensation decisions.
• Pay range disclosure laws – Depending on the local laws or the policies of the public job posting sites you may be using, at some point in the hiring process, you have to disclose a wage or a salary range for the role.  How you determine what you disclose is left to the company to determine.

 
Create / Evaluate Your Pay Disclosure Strategy

• Evaluate how your company is handling pay equity.  Embracing a disclosure strategy allows consistency across the organization and puts you in control of identifying gaps and taking corrective actions effectively versus handling issues on a case by case basis.
• Effective Communication – Communication is the cornerstone in building a foundation of trust with your employees.  Most people want to work for an employer they believe is treating them fairly and compensating them for the job they are doing.   Inconsistent messaging or feeling there are different rules for different offices (because of their local laws) can create misunderstandings and long term challenges in productivity.  
• Talent Acquisition – Businesses need to promote total rewards and benefits of working for their company that go beyond compensation.  Total rewards could include Hybrid work, flexible hours, remote work, training, career advancement, interesting work, stock options, deferred compensation, etc.
• Employee Satisfaction, Retention, Productivity – Employees who have been with a company for years do not want to be “punished” for their loyalty, because they perceive the company is paying more for new talent.  Having a clear pay disclosure strategy that includes existing employees can provide a roadmap for employees to understand what they can expect when they deliver results. 

 
Implementation and Best Practices

• Understand Your Companies policies and practices
  • Are you following a common policy across the organization on remote work or hybrid work? 
  • Are you going to have different pay ranges for positions that are 100% remote versus those that work in the office?
  • As you are bringing people back into the office in a hybrid or full time basis, are you making exceptions?
  • Are you factoring in geographic and market impact?
  • Are you competitive in the market?
  • Are you finding that people have three more years of time with your company during Covid, but their skills and training does not align with where they should be in their career path?  Do you have a strategy to address these gaps?

• Does Your Pay Disclosure Strategy factor in both Internal and External audiences?
  • Are you disclosing pay ranges for open jobs? 
  • Do you have a consistent policy on what salary range you post? 
    • Do you post an actual range for the job you posted that aligns to what you are actually paying for that role (i.e. $70,000 - $85,000) or are you posting the salary potential that role could make throughout the career (i.e. $70,000 - $150,000).
    • Does your philosophy of what range you are posting create confusion and frustration with your current employees?
    • Does your philosophy of what range you are posting create unrealistic expectations with applicants and candidates who now expect to be paid $150,000 when their skill levels are at a $75,000 level?

 
Pay transparency is going to continue to evolve and change. 

Companies who take control of their narrative and continue to evaluate their total rewards, their communication, and the partners and resources they need to implement their plan are going to be better positioned to drive results and achieve their goals in 2024 and beyond.  
 
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About the Author:
 
Lisa Proctor is the CEO / President of Sanford Rose Associates – Lake Lanier Islands, located in Peachtree Corners. 

As a strategic leader, Lisa provides broad-based industry experience in financial services, executive search, healthcare, public accounting, and non-profits. She is recognized for keen insight into new opportunities, trends, issues, and challenges in an emerging global economy and for her ability to blend cutting-edge trends and proven techniques to build a multi-faceted platform for talent acquisition, management, and strategic planning.

In addition to executive search recruitment, Sanford Rose Associates – Lake Lanier Islands is a trusted partner for succession planning and leadership transitions.

To learn more visit https://sanfordrose.com/lakelanierislands/

Contact Lisa Proctor at 678-969-3356 or email for more information.