Why You Should Champion Pay Transparency Before It’s Required
“How much will I make?” is a central question to any job search. In recent years, pay transparency has moved from taboo to debate, and now, increasingly, to standard practice. Part of that shift is being driven by state laws—15 states now require some level of pay transparency. But especially in the mission-driven sector, the very human need for clarity, fairness, and trust makes pay transparency a values and compliance consideration.
What is Salary Transparency?
Salary or pay transparency is the practice of disclosing information about forms of compensation that can be shared with employees, candidates, and oftentimes the public. This can include base salary, salary bands/ranges and other forms of compensation, such as benefits. Most often this information appears in job posts that are shared as part of the recruitment process.
Why Should Organizations Be Transparent About Salaries?
Salary transparency is mutually beneficial for employees, job candidates and employers.
Benefits for Employees
Illuminates wage gaps and provides baseline data for correcting pay equity within organizations.
Fosters a sense of trust for employees through transparency and enables employees to advocate for themselves with a greater understanding of what is and isn’t possible.
Benefits for Candidates
Supports candidates in deciding whether they are interested in investing time and energy before entering a hiring process.
Enables candidates to leverage posted salary to determine standard market salaries and ranges for a particular role.
Benefits for Organizations
Models equity and creates greater alignment with mission and values. This alignment between what organizations say and do, in turn, fosters a healthier internal culture.
Signals organizational values to potential candidates, peers and funders.
Prevents expenditure of time and resources on search processes that fall apart at the offer and negotiation stage.
Complies with state-based pay transparency laws.
Putting Salary Transparency into Practice
Salary transparency often begins with determining fair and market-rate salary bands within your organization. If conducting a compensation analysis isn’t a viable option for your organization, you can gather data on your own by tracking similar roles as they are posted, reaching out to peer organizations or accessing publicly available (or low cost) salary data – keeping cost-of-living across different geographies in mind. State-specific data can be found here. And if you’re eager to embark on a broader exploration of pay equity in action, consider listening to this episode of the Fund the People podcast, featuring Mala Nagarajan of Vega Mala Consulting.
Additionally, when creating and sharing a salary band, consider a range that is narrow enough to be meaningful and clear, including information that can help guide a person’s understanding of where they might fit within that range (i.e. skills, years of relevant experience, geography, specific education).
As referenced earlier, compensation includes the totality of renumeration and is a critical factor for candidates in assessing opportunities. Along with salary range, consider including information on other benefits like employer paid insurance, retirement matching, PTO, flexible work and professional development support. In addition to this, noting that you do regular COLA adjustments, merit increases and/or regular salary benchmarking are all ways to signal a commitment to fair compensation and pay equity.
Get in Touch
Questions about salary transparency and/or how to implement this in your organization? Please reach out at info@npag.com and let’s discuss!