As the pay transparency conversation continues to swirl in HR circles, attention centers on ever-increasing rules and regulations. It’s hard to dispute the importance of compliance, but this overlooks the deeper impacts of adopting transparent pay practices.
Companies with wage transparency have enhanced their reputation, culture, and ability to attract top talent. But earning these rewards takes a long-term, strategic view.
Building a strategic approach to pay transparency
A tactical approach to pay transparency is one-dimensional, simply involving:
- Assessing the market
- Assessing the role
- Creating a pay range
This approach allows you to achieve compliance and ensures you’re following the requisite rules, though not where pay transparency stops.
A strategic approach to pay transparency is multi-dimensional, placing employees at the heart of it. It does more than ensure you’re fulfilling the rules and regulations – it raises awareness, fosters trust, and deepens engagement.
Let’s explore the steps to create a people-centric approach that enables greater wage transparency throughout your company:
- Assess individual needs & expectations
Calls for pay transparency are increasing among candidates and employees. In one study, a third of job seekers said they wouldn’t attend an interview without knowing what the employer was willing to offer, proving compensation information is a top priority for candidates. Employees also report that their feelings of trust and job satisfaction increase in an environment with more transparent pay practices. Regularly conduct internal surveys and seek external research to help you better understand what candidates and employees expect when it comes to pay.
- Define total rewards
Adopting wage transparency can spur an increase in non-monetary benefits, like additional developmental opportunities and scheduling flexibility. Determining these benefits and articulating them as part of your total rewards structure will increase understanding of your philosophy across the business.
- Get your culture ready
Implementing new pay practices is especially challenging in a workplace where criteria aren’t clear-cut or performance is difficult to measure. Make changes slowly and deliberately to prevent frustration and resentment. Be clear about what, when, and why things are changing, and how people can expect to be affected.
- Prepare for difficult conversations
As you make changes to compensation, employees will likely have questions about why they fall in certain pay ranges. Explain your pay practices to managers so they can have productive conversations with employees and address any concerns. It may be tempting for leaders to offer informal rewards, like extra flexibility or time off, but let them know those promote unfairness and contradict the balance pay transparency aims to create.
- Communicate your philosophy
Disclosing your stance on equitable pay positively impacts perceptions of trust, fairness, and satisfaction among employees – and can even boost productivity and performance. People often look for compensation information on job boards and other platforms that rely on crowdsourced data. Taking charge of the conversation allows you to combat these unreliable (and potentially reputation-damaging) sources.
Looking ahead and moving forward
When it comes to pay transparency, talent acquisition and HR leaders must think beyond compliance. Take a step back to create an intentional strategy that focuses on your employees – it’ll make your company even more attractive to candidates and boost positivity across your current workforce.