At its core, salary transparency simply means that the company is open with candidates about how much a role pays, and that current employees can easily find out how much their coworkers make. Salary transparency also means that there are clear, objective, and well-communicated methods for determining salaries and raises. Salary transparency has become incredibly important to many employees and job seekers in recent months, and a lot of companies are starting to recognize its benefits. Here are just 3 of the many reasons to start openly discussing salaries.
Why is Salary Transparency Important?
Closing the Pay Gap
Despite major strides, there is still a significant gender pay gap, and women of color make even less than their white counterparts do. You can stand out from the crowd and attract a more diverse workforce when you start openly discussing pay. Salary transparency helps to close the pay gap, ensuring that all of your workers get the compensation that they deserve.
Showing Employees You Value Them
Everyone wants to feel valued, and your team members are no exception. But it’s tough to feel like you have value when you suspect that you’re being paid less than your coworkers for the same job. Open conversations and objective standards for pay demonstrate that all of your employees are important to you.
Improving Trust and Employee Retention
Discussing pay isn’t always easy, and your employees know that. Having the hard conversations helps to build trust. When your workers trust you, they are more likely to be engaged at work. In turn, this builds loyalty and, ultimately, employee retention. Hiring is difficult and expensive, so it only makes sense to do everything you can to retain good workers.
Salary transparency isn’t a “set it and forget it” sort of thing. Instead, it’s more of a goal that you’ll need to proactively work towards over time. Start by developing objective criteria for setting both pay rates and raises. Communicate these criteria to your existing team members and give them a channel to ask questions. Post salaries on your internal website. When creating job descriptions, mention the salary range up front, along with your criteria for giving raises. Over time, talking about salary will be just another part of the job.
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