One of the most talked about topics in business today is pay transparency. It is a way for companies to build trust with their employees and improve productivity and employee engagement. It is also beneficial for combating the gender pay gap.
There are various ways to define salary transparency. For instance, providing employees with an understanding of how their pay is determined, or it can be complete transparency regarding the salary ranges for every job.
A survey conducted by jobs board Talent.com revealed that almost 80% of job seekers in England support pay transparency. It can create a more favorable work environment for employees and the company.
Culture of Openness
According to Michelle Cheng, the talent director of Notion Capital, pay transparency can help companies establish a culture of openness and treat their employees like adults.
Being open about the salaries of employees can help companies develop a culture of trust and improve their performance. It can also help them attract and retain top talent.
Salary transparency can also help companies promote diversity in their leadership and tech departments. It can force a frank discussion about the relative worth of different kinds of work.
Before implementing pay transparency, leaders must consider the various factors that affect the program’s success. According to Cheng, one of the most important factors employers should consider is introducing a rules-based formula or framework determining the pay scale.
Experience
In 2020, London-based ComplyAdvantage started implementing pay transparency. The company wanted to ensure that its employees knew that it had a common approach when deciding salaries.
ComplyAdvantage created a clear and consistent approach to its compensation practices through its global job framework and pay ranges. It also started to advertise all roles with salaries outlined upfront.
Amanda Ward, the company’s vice president of people, said that salary transparency could help instill confidence in employees that they are fairly compensated for their work. She also noted that the company wants to ensure that workers know how their pay is determined.
ComplyAdvantage has seen an increase in its engagement through the implementation of pay transparency. In October 2022, a survey revealed that over 70% of the company’s employees believed their pay was fair.