While the landscape of being a competitive employer has always fluctuated, the global shifts over the past few years has allowed employees to better understand and advocate for their priorities.
One growing element of this movement is pay transparency. While legally required in some provinces and states (the Pay Transparency Act), the practice has also been voluntarily adopted by businesses everywhere.
To share insight on the topic, we sat down with Sharlene Massie; Founder & CEO of About Staffing, Laura Gale; CEO of White and Gale Consulting (Compensation and Total Rewards), and Debbie Pearmain; Principal of One Stop HR—a consulting company specializing in leadership development, coaching, employee engagement, performance management, mental health & wellbeing, and culture.
They gave us their take on the advantages and disadvantages of pay transparency, how businesses can adopt the process, the best employee retention strategies, and so much more.
WHAT IS PAY TRANSPARENCY?
Created to address the “E” in “DEI” (diversity, equity, & inclusion), pay transparency is a policy where businesses provide pay-related information (wages or wage ranges) to their employees. Although many of us remember a time when employees were discouraged from sharing pay-related information, pay transparency can also include a communications policy that allows or encourages employees to share this information with each other.
While it is largely not legally required across Canada & the USA, it is in some, and it could be coming to more. This raises a lot of questions:
- Do we want more government involvement in private businesses?
- Will there be fines?
- Should there be fines?
- Is there a better way to advance and support equity?
Last year, the federal government passed the Pay Equity Act, which will eventually require all federally regulated workplaces with 100 employees or more to publicly disclose wage gap data for women, Indigenous people, persons with disabilities and members of visible minorities. And of course, public companies have always had to report to their stakeholders on pay rates.
DEBBIE PEARMAIN & LAURA GALE
Beyond simply showing pay ranges, pay transparency is about understanding the elements that make up a position, knowing which of those are compensable, helping employees understand how pay decisions are made, and providing equal opportunity of available promotions.
Globally, pay transparency is a hot topic. Not only are companies moving towards voluntarily providing pay-related information to employees, but legislation is also requiring organizations to share more around compensation.
While transparency is a powerful practice that builds trust with employees and can narrow the gender pay gap, it cannot exist well without a solid foundation of clear compensation philosophy and guidelines on how pay decisions are made.
Pay transparency isn’t about statistics, but rather the emotions around equal opportunity, transparency around pay practices, making equitable decisions, and inclusion.