Pay transparency is no longer optional—it’s the expectation. But without a foundation of equity, opening the books can amplify hidden weaknesses.
By Gillian Manning
A new report from OutSolve reviewed a variety of data and legal documents before concluding that “the core risk for employers is no longer whether to be transparent, but whether transparency will amplify hidden weaknesses in existing pay practices.”
What do the numbers say?
- 60% of job seekers refuse to apply to companies with known pay gaps;
- 83% of employees and job seekers said transparency around paid is important to feel included in the workplace;
- women earn 83% to that of men across all job types; and
- 69% of employees feel comfortable discussing salary with coworkers, while a further 52% have already done so.
As job seekers search for transparency, employers need to ensure that their compensation systems are without cracks. And transparency—as risky as it is—is hardly optional. Not only do potential employees seek it out, but governments are increasingly requiring it. There are 25 American jurisdictions with active pay transparency laws, for example, and the UK has recently implemented transparency rules as well.
“Pay equity and pay transparency are now permanent features of the regulatory and labor market environment,” OutSolve’s report concludes. “Organizations navigating this landscape most successfully understand that opacity is a risk, while transparency–built on a foundation of equity–is a competitive advantage.”
It won’t be an advantage, however, if there’s any disparity, inconsistencies, or perceived unfairness. So, HR leaders have to be intentional and take a strategic approach to ensuring pay scales are logical and equitable.
“In today’s environment, a lack of pay transparency is not a neutral position. It’s a fail,” says Neil Dickinson, OutSolve VP of Compensation Services. “It can signal weak compensation governance, increase employee skepticism, and leave organizations more vulnerable when pay decisions are questioned by job candidates, employees, or regulators.”
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