Pay transparency: Closing pay gaps and cultivating a culture of openness

Woman presenting pay transparency data

3 mins, 34 secs read time

For many companies, publicly sharing salary and compensation information was considered taboo. Paychecks vary widely, even across similar roles and titles, contributing to the unequal compensation practices that are coming to the surface more and more. In an effort to address these inequities, many states are now passing laws requiring companies to disclose this information on job posts. These new regulations are right on time amid the growing demand for greater pay transparency: a full 63% of employees would prefer to work at a company that discloses pay information over one that does not.

Michelle Cheng, the Talent Director at British venture capital firm Notion Capital, puts it this way: “A company that embraces pay transparency conveys so much more than just the salary itself. It's the subtext in treating everyone like an adult and establishing a culture of openness.”

When employees have all the information, they feel valued and respected by their organization.
– New research from Payscale report, How your pay raise practices affect employee turnover

Pay transparency, explained

So what exactly does pay transparency mean? WorldatWork defines it as the level at which organizations disclose pay and salary information. At Greenhouse, we believe it’s more than simply listing pay ranges for candidates on open job posts, it means demonstrating your commitment to having proactive conversations about the value that different types of roles provide and what actions are rewarded at your company.

Some states are now legally requiring employers to disclose pay information and it is expected that other states will soon be following suit. Though disclosing pay ranges on job posts is the minimum requirement, employers should also ensure they are engaging in transparent and fair conversations with prospective employees. It’s not only the right thing to do, it also helps attract high-quality talent. Additional transparency includes empowering hiring managers and recruiters to have a conversation with candidates on how pay ranges are calculated but it is still up to each organization to determine how transparent they will be.

Benefits of pay transparency

Salary is not just a number. It encompasses a company’s values, expectations about performance and incentivized behaviors for various roles and titles. Pay transparency allows companies to determine how these factors should translate into salary, which also often uncovers biases in previous, less-structured pay practices. When pay ranges are in the public domain, organizations are more incentivized to set pay more equitably.

Candidates are continuing to look for companies that align with their values, and transparency is one that is becoming increasingly important one. Pay transparency not only promotes fairness and healthy compensation practices, it also creates a culture of trust within organizations and goes a long way in enhancing the work environment and culture. A study by Payscale indicated that “the way an organization communicates information about pay is critically important” and organizations that do not address it could suffer when it comes to hiring.

Greenhouse's new pay transparency feature

At Greenhouse, we understand the importance of being transparent about pay. Our new pay transparency feature gives customers the ability to easily create rules and apply pay ranges to job posts. This not only helps our customers move toward closing pay gaps and fostering a culture of transparency, it also adds in necessary guardrails and automation to ensure legislative compliance and accuracy. Our customers can now reduce their risk of incorrectly inputting information and instead enjoy peace of mind using a standardized and more efficient method to input pay ranges on job posts.

While transparency will not automatically resolve inequities in pay, it will show an organization's level of dedication to their people and to fairly rewarding their contributions. Talking about salaries can be uncomfortable, but doing so fosters a more open and engaged culture.

During an open beta for the pay transparency feature, Greenhouse saw salary information applied to almost 7,500 job posts, indicating that customers are committed to ensuring that their employees and prospective candidates feel valued and trust that they are being paid fairly for their work.

Interested in joining the many organizations that are focusing on closing pay gaps? We’d love to talk to you about the benefits of pay transparency. Just request a demo.

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Sneha Patel

Sneha Patel

is a Product Marketing Manager at Greenhouse, where she works closely with our product teams to deliver new features to customers. Prior to Greenhouse, Sneha worked as a Product Marketer in the digital advertising industry. She lives in Austin, Texas, and when she’s not working, she spends her time traveling the world. Connect with her on LinkedIn here.

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