[US] 4 ways to improve salary transparency

Three of America’s most influential states - New York, Washington, and California - passed statewide salary transparency bills in 2022, casting a welcome spotlight on the issue, Quartz reports.

Conversations around quashing the pay gap and mandating salary transparency on job adverts are increasingly happening in the US but there is a long way to go. The US is reportedly among the worst in the global ranking of salary transparency and less than 3 per cent of job postings include salary information.

This lack of salary transparency exacerbates the widening pay gaps and perpetuates bias. When an employee’s salary is no longer hidden, every little difference in salaries between employees must be accounted for. Employers must also be more mindful when hiring in the public eye.

Many employers don’t recognise the hidden costs that a lack of salary transparency incurs. Recent research by Adzuna has reportedly revealed that the absence of salary clarity directly hinders talent attraction and damages employer attractiveness.

According to Adzuna’s survey of 2,000 job seekers in the US, 1 in 3 would turn down an interview opportunity if they do not know the salary range. More significantly for an employer, over half would decline an offer after finding out the salaries. The cost of a vacant role compounds over time.

Jobseekers are sceptical of employers who do not disclose salaries in job ads, according to the survey results. A third assume the company is hiding something, while 30 per cent believe it shows the company will underpay them. Others think it makes the company look untrustworthy (28 per cent) or indicates that the company will be biased in how they pay their employees (31 per cent).

Adzuna has launched a petition calling for the government to make it a legal requirement for every job advertisement to include a salary. However, companies need not wait for a mandate; Adzuna’s 4 tips below can help companies create salary transparency now.

4 ways companies can improve salary transparency:

1. Review the current salary philosophy

Companies must consider their salary philosophy, particularly how bias can unintentionally creep in to create salary differences. Consider looking into the salary history of a position, comparing the salaries and career journey of employees on the same team, and assessing whether each decision is warranted.

Unconscious bias is inevitable and is part of the human experience. To help mitigate it, Adzuna says companies and leaders can reflect on past actions, identify unconscious bias among decisions, and put policies or systems in place to tackle each of them.

2. Set salary ranges and publicise them

Start by using market data to set initial salary ranges. Consider implementing payroll audits to identify discrepancies. Then, be open and honest by listing salary ranges for each role on job ads or in the early stage of the hiring process.

Show employees how salaries are calculated and what they need to do in order to reach the next step in the range. In addition to achievements and career milestones, include the behaviours and attributes that senior leadership and the HR department want to incentivise in the criteria for determining earned raises.

A common misconception around salary transparency is that discussing salaries at work is demoralising, and therefore conversations around salaries should be avoided in the workplace at all costs. Adzuna says it is normal for employees to make assumptions and draw incomplete conclusions as they learn where their salaries stand in the company from their colleagues. However, their research has found that most employees are happy to learn what their colleagues earn. Less than 1 in 10 respondents are unhappy about it.

3. Train leaders to lead by example

There are certain limitations to what an HR department or senior management can do. Leaders who work closely with their team members and are usually responsible for finalising hiring and promotion decisions play a crucial role in compensation conversations. Empower leaders to address the unconscious biases they ordinarily gravitate towards and train them to handle salary conversations with potential and current employees in a fair and sensitive yet subjective manner.

4. Include salary transparency in the company blueprint

Smart companies make salary transparency part of their future work plans. Salary transparency can help companies develop a culture where leaders can have a proactive salary conversation with their team members, standardise hiring processes that avoid unconscious bias and attract employees with diverse backgrounds and experiences.

Source: Quartz

(Links via original reporting)

Three of America’s most influential states - New York, Washington, and California - passed statewide salary transparency bills in 2022, casting a welcome spotlight on the issue, Quartz reports.

Conversations around quashing the pay gap and mandating salary transparency on job adverts are increasingly happening in the US but there is a long way to go. The US is reportedly among the worst in the global ranking of salary transparency and less than 3 per cent of job postings include salary information.

This lack of salary transparency exacerbates the widening pay gaps and perpetuates bias. When an employee’s salary is no longer hidden, every little difference in salaries between employees must be accounted for. Employers must also be more mindful when hiring in the public eye.

Many employers don’t recognise the hidden costs that a lack of salary transparency incurs. Recent research by Adzuna has reportedly revealed that the absence of salary clarity directly hinders talent attraction and damages employer attractiveness.

According to Adzuna’s survey of 2,000 job seekers in the US, 1 in 3 would turn down an interview opportunity if they do not know the salary range. More significantly for an employer, over half would decline an offer after finding out the salaries. The cost of a vacant role compounds over time.

Jobseekers are sceptical of employers who do not disclose salaries in job ads, according to the survey results. A third assume the company is hiding something, while 30 per cent believe it shows the company will underpay them. Others think it makes the company look untrustworthy (28 per cent) or indicates that the company will be biased in how they pay their employees (31 per cent).

Adzuna has launched a petition calling for the government to make it a legal requirement for every job advertisement to include a salary. However, companies need not wait for a mandate; Adzuna’s 4 tips below can help companies create salary transparency now.

4 ways companies can improve salary transparency:

1. Review the current salary philosophy

Companies must consider their salary philosophy, particularly how bias can unintentionally creep in to create salary differences. Consider looking into the salary history of a position, comparing the salaries and career journey of employees on the same team, and assessing whether each decision is warranted.

Unconscious bias is inevitable and is part of the human experience. To help mitigate it, Adzuna says companies and leaders can reflect on past actions, identify unconscious bias among decisions, and put policies or systems in place to tackle each of them.

2. Set salary ranges and publicise them

Start by using market data to set initial salary ranges. Consider implementing payroll audits to identify discrepancies. Then, be open and honest by listing salary ranges for each role on job ads or in the early stage of the hiring process.

Show employees how salaries are calculated and what they need to do in order to reach the next step in the range. In addition to achievements and career milestones, include the behaviours and attributes that senior leadership and the HR department want to incentivise in the criteria for determining earned raises.

A common misconception around salary transparency is that discussing salaries at work is demoralising, and therefore conversations around salaries should be avoided in the workplace at all costs. Adzuna says it is normal for employees to make assumptions and draw incomplete conclusions as they learn where their salaries stand in the company from their colleagues. However, their research has found that most employees are happy to learn what their colleagues earn. Less than 1 in 10 respondents are unhappy about it.

3. Train leaders to lead by example

There are certain limitations to what an HR department or senior management can do. Leaders who work closely with their team members and are usually responsible for finalising hiring and promotion decisions play a crucial role in compensation conversations. Empower leaders to address the unconscious biases they ordinarily gravitate towards and train them to handle salary conversations with potential and current employees in a fair and sensitive yet subjective manner.

4. Include salary transparency in the company blueprint

Smart companies make salary transparency part of their future work plans. Salary transparency can help companies develop a culture where leaders can have a proactive salary conversation with their team members, standardise hiring processes that avoid unconscious bias and attract employees with diverse backgrounds and experiences.

Source: Quartz

(Links via original reporting)