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6 Things Every HR Manager Should Know About Pay Transparency

Pay transparency is quite the hot topic, and is only gaining steam. Popular news outlets, as well as social media influencers, are driving a societal change, with pay transparency at the forefront. The workforce is changing, and both employees and candidates are beginning to expect transparent pay practices. Essentially, more transparency=a better place to work.

Employers, particularly HR leaders, are well advised to inform themselves on the current (and future) implications of pay transparency and how it may impact their workplaces. Hopefully this list gives some insight into the depth of influence pay transparency can have.

1. Pay transparency is good for employers too.

So much of the narrative around recent pay transparency laws is based on employers fearing that the rug is going to be pulled out from under them. That their entire way of operating is being picked apart and analyzed, and that it’s the end of the very workplace they have worked so hard to carefully craft and create. Change is difficult, and at times scary, but so many employers have been approaching pay transparency from the wrong angle. It’s good for them too! Having transparent pay practices allows employers to both attract and retain top talent. Employers with transparent pay practices are much more likely to get the best of the best applying, and staying. It also makes them look plain good. Ahead of the pack and progressive. What company doesn’t want to show their progressiveness and malleability? It’s simply good for business.

2. Pay transparency effects your current employees, not just candidates.

Pay transparency, while great for candidates and job seekers, is also a plus for current employees. The way current employees feel at work is directly linked to their pay. Gone are the days of quiet whispering between colleagues about salaries, making awkward and sometimes downright uncomfortable revelations a lunchtime norm. Transparent pay practices dispel a sense of awkwardness and fear, and allows employees to focus on their work rather than their pay. This ultimately leads to more productive, more engaged employees.

3. Pay transparency may be a legal requirement, depending on your state.

If your company operates in California, Colorado, New York, Connecticut, Maryland, Nevada, Rhode Island, or Washington you are now legally obligated by some form of pay transparency regulation. Laws vary by state, so be sure to do your due diligence in reading the laws that have recently passed. But, it’s important to note that while your employer’s state may not have pay transparency requirements as of yet, it’s only a matter of time. The current laws have all started to pop up across the country just over the last couple of years, and the next 5 years will likely only see more and more states following the same trend. It’s best to get ahead of the law, rather than scrambling to play catchup once it passes.

4. Pay transparency reduces pay inequity.

One of the primary reasons pay transparency has become such a significant part of workplace culture is because pay transparency prevents (or at least reduces) pay inequities. Women and people of color are exponentially more effected by unequal pay practices. Historically, women and people of color (and particularly women of color) have been seen as “greedy” or “selfish” when advocating for themselves, particularly when it comes to their salaries. Eliminating secrecy around pay norms allows for culture to shift to one of equality, allowing everyone to advocate and negotiate their pay openly and freely.

5. Pay transparency is a cultural phenomenon.

The shift to pay transparency hasn’t happened in a vacuum. It is a cultural phenomenon. Millennials and Gen Zers are driving pay transparency to be a cultural norm. A great example of this impact is @salarytransparentstreet on TikTok and Instagram. Hannah Williams is leading a social media phenomenon, where she travels around the country, asking random individuals on the street about their job- title, salary, experience, and qualifications. These videos have garnered millions of views across social media platforms- proof that there is a cultural interest in transparent pay practices.

6. Pay transparency is the future.

Hannah Williams and Salary Transparent Street is a perfect example of how social media is impacting the workforce at large. Pay inequality and pay inequities are no longer being accepted as a norm, and both individuals, as well as state governments are seeing that a change needs to occur. The laws that have passed across the country are just the beginning, and I can safely say that you will be better prepared for the future if you prepare for transparent pay practices now.

For more information, see 'Pay Transparency: Past, Present, and Future'

6 Things Every HR Manager Should Know About Pay Transparency © 2023 by Amanda Story is licensed under CC BY-NC-ND 4.0

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