Your Guide to Pay Transparency: From the Key Benefits to How Companies Can Help

You may have seen the term “pay transparency” a lot recently, especially with the new salary transparency laws going into effect in 2023. But what does this really mean?

“Pay transparency is access to actual salary bands for a specific job opportunity,” explains Maureen Schlie, a Talent Acquisition Manager at West Monroe. “It also includes sharing how people compare pay ratios across I&D demographics (including gender, race, and ethnicity),” elaborates Gage Nordlof, another Talent Acquisition Manager. As such, pay transparency “provides every job seeker with quick and honest information into what a position can pay,” says Maureen. 

Pay transparency has a large amount of concrete benefits, including:

1. For historically marginalized populations

“Marginalized populations, including women, People of Color, and people with disabilities, have historically faced barriers to equal pay and advancement opportunities,” Gage tells us. “Pay transparency is important for these populations because it can help to reduce pay disparities and promote equity in the workplace.” For example, pay transparency gives historically marginalized populations “the information they need to negotiate for competitive salaries and close existing pay gaps.” explains Maureen. “When pay is transparent, employees can more easily compare their pay to others and advocate for fair compensation,” she says. Further, Gage shares that pay transparency can help encourage “employers to address any pay inequities that may exist.” 

2. For job seekers

Pay transparency “can establish trust at the beginning of the recruitment process” and “prepares leaders within companies to have transparent conversations around compensation,” states Maureen. Further, “it removes some of the anxiety from the interview and negotiation process for job seekers,” because they already have the salary information needed to make a decision, she explains. 

3. For companies

Having pay transparency also shows that a “company is invested in pay equity and doing what it can to close pay gaps for marginalized groups,” Maureen tells us. For example, Gage notes that West Monroe “believes that pay transparency is more than just salary bands; its helping people understand our firm’s compensation philosophy and being transparent about how salaries are determined in hire, at annual reviews, and when being promoted.”

Pay transparency is clearly very important with many key benefits. But what does pay transparency mean to Maureen and Gage personally, how can you talk about this topic, and what is the future of pay transparency at West Monroe and beyond? Read on to find out!

To begin, in your own experience, why is pay transparency important?

Maureen: In 2022, American women typically earned 82 cents for every dollar earned by men (Pew Research Center; March 1st, 2023). This is one statistic, but you will see a similar disparity among People of Color and other marginalized groups.

The fear of asking for too much and eliminating your candidacy or too little and selling yourself short is removed from the process. The recruitment process starts with trust and allows for more candid and open conversations between employer and job seeker, and ultimately more equity among employees.  

Gage: For West Monroe employees, we openly communicate compensation information to increase employee trust, provide a stronger candidate experience, and overall support job satisfaction. It also allows us to reduce recruitment time by talking to candidates that align with the range and not spend cycles where there isn't alignment. 

What advice do you have for candidates and employers who are interested in being more open about pay transparency but have trouble broaching this subject?

Maureen: Hone in on the key benefits of having pay transparency. What you’ll gain will surpass any feeling of discomfort in broaching this subject. If your concerns around pay transparency identify other internal issues, lean into those concerns and work with your leaders to develop solutions. It is also about educating yourself on how salaries are calculated and how they are determined by several factors including skills, geography, and prior experience.

Gage: Advocate for yourself — use pay transparency to your advantage and do your research by looking at job ads where pay transparency is visible. Also make sure that you know your value in the market so you can ensure you’re being paid in an equitable fashion that doesn't rely on your comp history but, instead, relies on what the market bears for your expertise. 

How is West Monroe ensuring that there is pay transparency at the company? 

Maureen: We post the actual salary bands for every job and provide resources for employees to access total rewards information, which includes compensation managers within the different practices and functions as well as access to talent business partners for staff at all levels to leverage.  

Gage: Twice a year, we do a pay equity analysis to ensure that we are looking across I&D demographics and paying fairly. We use market data to determine our scales and ensure people understand how they are aligned to that market data. We display pay ranges in candidate postings. We also have educational resources including information on our intranet to educate employees on our compensation philosophy.

With the new salary transparency laws going into effect, what do you think is the future of pay transparency and how will that affect women at work? 

Maureen: Most, if not all companies will disclose pay range information in the near future and because of that, the gender pay gap should close completely. Women who feel they are paid in a transparent way do as well or better than men for every $1 earned (Payscale's 2023 Compensation Best Practices Report).

This article originally appeared on Fairygodboss.com.