I’m not sure about you, but lately I’ve seen a lot of people talking about salaries.
We’ve always known that when it comes to salary negotiations companies hold all the cards. But as people fight against this, can companies benefit by being more open about pay?
The following articles look at what happens when companies embrace salary transparency, what to think about before you do it, and whether it helps women and minorities to get equal pay.
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To varying degrees, Glitch, Buffer and Starbucks share how much their employees make.
After gathering feedback, Glitch decided to share salary ranges, not exact figures. Everyone in the company knows the ranges, and they’re also made clear in job ads.
Starbucks took a different approach - sharing pay data with all employees, and pay ranges with candidates when asked (in most locations but not all).
And Buffer went fully transparent - publicly sharing everyone’s salary.
Despite the different approaches, the commitment to transparency and closing pay gaps has been positive for all three companies. In particular, they’ve received positive publicity, which helped boost their employer brands, and made it easier to attract great talent.
In the experience of this NY Times journalist, the modern woman is talking about money. Whether with friends, colleagues or industry leaders, women are quizzing each other about money - how much they make, their stock options and signing bonuses, and how they negotiated.
Behind it is a desire to learn from each other and to know what’s reasonable. What’s possible. And to have information to make informed decisions.
This is a trend that seems to be just getting started. Particularly in newer industries or creative fields, where there is less information available.
About 17% of private companies practice pay transparency, while 41% discourage and 25% explicitly prohibit discussions of salary information.
But is it better to share? Or keep your pay to yourself?
Unfortunately, because so few companies are transparent around pay, there are no comprehensive studies on its effects. But anecdotally it seems to make people more productive and satisfied.
So what’s stopping more companies being open about pay? According to the experts:
It’s fair to say most employees and candidates will believe point 1 to be the real reason. To build trust it’s worthwhile being clear about how pay is determined, even if you don’t share salary data.
While there are few studies of transparent pay in companies, a number of researchers have run experiments to test its effects. Generally the studies found that salary transparency can improve performance by showing:
But before suddenly sharing salary information, companies should consider if their salaries are equal, and if employees are ready to have that information shared.
Because in companies where there are many different types of jobs, it’s often hard for employees to understand the nuances of each role and how that impacts the salary. It’s likely to be more important to be transparent about how compensation decisions are made rather than the actual numbers.
Ultimately salary transparency should be about fair pay, and employee trust in that fairness.
👉 Try out Buffer’s salary calculator here
👉 Levels shares salaries and career levels across (mainly tech) companies
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