It’s no secret that the rise of remote work has changed a lot of things about the way we work. Companies all over the world are in the midst of tense negotiations about the where, how, and when of their employee’s work.
Another side effect has been an increase in pay transparency, both internally and externally. And, perhaps more importantly, the number of candidates who are starting to demand it. đź‘€
Even in tech, where hiring has slowed and the market is uncertain, highly skilled workers are starting to insist that prospective employers share a salary range earlier (and more plainly!) then ever before.
What is the gender wage gap?
For as long as they’ve been in the workforce, women in the US have been paid less than male counterparts with equivalent skills and experience.
This discrepancy, often referred to as the gender wage gap, remains a pressing issue in the US workforce, with women earning an average of 81 cents for every dollar earned by men.Â
Of course, the stats are even bleaker when you control for race and ethnicity. According to the National Women's Law Center, Black women and Latinas earn just 63 cents and 55 cents, respectively, for every dollar earned by white men.
This intersectionality highlights the need for a comprehensive approach to address the gender wage gap, one that takes into account the experiences of all women and marginalized groups.
It’s hard to believe this will ever be achieved without federal legislation but, until then, demanding pay transparency from our own workplaces is one concrete action we can all take today.
Why your company should practice pay transparency
While some companies are hesitant to implement pay transparency policies due to concerns over privacy and confidentiality, we’ve found that the benefits often outweigh the cons. This is especially true in the tech industry, where competition for talent is high.
Build trust
Compensation has never been a simple issue but it has become infinitely more complicated now that many companies have employees working across multiple states, and even different countries.
Being upfront with your employees about how people are compensated and rewarded can build trust among your team.Â
Many employers worry about disagreements breeding resentment but we’ve found that the opposite is often true. Even when employees disagree with certain aspects of a compensation framework, or a single salary range that you posted on a job description, there’s usually still a net benefit because employees have more faith in the fairness of the system overall.
This contributes to a positive company culture, and can increase employee satisfaction and engagement overall.Â
Amplify recruiting efforts
Pay transparency can be a powerful tool for boosting tech recruiting offers—both in terms of the volume and quality of applicants, but also in the number of accepted offers.Â
So often, we think of being transparent about pay as just one thing—including salary ranges in your job descriptions—but it’s actually a spectrum. There are many different ways to implement more transparent pay practices, which makes it easier to ease into it and find what makes sense for your organization.
At Tech Ladies, we see our partners embrace this spectrum in a number of ways, and we’re excited to share these best practices (and their results! 👀) with you soon.
Improve retention
In addition to improving recruiting efforts, pay transparency can also improve retention among existing employees.Â
When employees have a clear understanding of their pay grade and career ladder, they are more likely to be satisfied with their position and less likely to leave for better opportunities elsewhere.
From a branding perspective, implementing pay transparency can also differentiate a company as being both trustworthy and innovative in processes or culture, which can help attract both customers and employees.
Ensure legal compliance
It may not be the most exciting topic to consider, but there are a growing number of pay transparency laws that you have to contend with across the US and around the world.
By implementing pay transparency policies proactively, companies can avoid legal issues down the road and demonstrate their commitment to equity and fairness in the workplace before it’s required.
Challenges with implementation
Pay transparency has many potential benefits for both women and companies, but it's important to also be upfront about the challenges of implementation.
According to Harvard Business Review, pay transparency may result in unintended consequences, especially if you don’t conduct a pay audit and make adjustments before sharing salaries more publicly. Handing this effort poorly could lead to resentment and decreased motivation. This can then result in lower performance and increased turnover as employees leave for better-paying jobs elsewhere.Â
Companies considering pay transparency policies should address these challenges proactively to ensure a successful rollout.
In conclusion
While there are potential pitfalls to navigate, we firmly believe that pay transparency can be a powerful tool for ensuring fair and equitable compensation for all employees.
But this is just the beginning of the conversation!
The Tech Ladies team will be diving deeper into pay transparency over the coming weeks, with a focus on the tactical how-to’s, best practices for ensuring legal compliance, and a spotlight on innovative companies leading the way.
We hope you've found this introduction to be helpful and encouraging. Stay tuned for more insights, tips, and inspiration as we continue to explore this critical topic!
Next STEPS
