Updated: May 15
By: Dr. Brittany Castonguay 20 Apr 23 #Management
Let’s first focus on the pay gap. Pay transparency is not a new concept, but it is gaining popularity. There are multiple reasons why job seekers and employees support pay transparency, with the two most prominent reasons being- it can narrow the pay gap and boost productivity. In 2022, women had to work an additional 73 days of 2023 to make the same as their male counterparts for all 2022. This means that most women are behind the power curve regarding pay and equality. The gap grows more significant for women of color.
The pay gap is a real problem that has seen little to no resolution despite decades of troubleshooting.
Promoting pay equality can prevent that.
The majority of my professional background comes from being a service member. This also means that pay transparency is genuinely transparent when you serve in the military. Everyone can find out what you earn based on rank and years of service. Transparency alleviates the need for hushed conversations about pay and reduces unconscious biases. When pay is something to be kept secret, it raises walls around teams and promotes unconscious biases among hiring managers.
The realism is that pay should be an allowed topic in the workplace. Secrecy breeds discontent and distrust. Both will raise more problems than solve them and invite unconscious bias. An unconscious bias is a negative belief about a group of people that individuals are not often aware of, like saying that women with young children won’t be committed to their careers or that an older employee will quickly look for retirement. These internal beliefs are not always perceived as wrong until they are pointed out. While unintentional, an unconscious bias can be detrimental when allowed to fester in the workplace. Regarding pay transparency, the mother and the older employee may be offered a lower starting salary that does not directly correlate to their skills and experience because of how they are perceived.
Shifting away from the pay gap, secrecy around pay can hamper productivity. When employees are well-managed and secure in their positions, they have nothing to worry about. Lessening their concerns comes with enhancing pay transparency in the workplace. Employees looking for career development will first consider their internal options and look to grow internally with the organization versus seeking external employment due to pay transparency. The reason is that they are secure with the growth opportunities and know what a lateral or upward change in position will mean financially. Additionally, internal development saves the organization money and allows employees to focus on better supporting the company versus growing disdained with their present options.
According to Society for Human Resources Management (SHRM), 79% of employees want some level of pay transparency.
They no longer want to live in the dark and be underpaid as a minority for the same type of work. Pay transparency promotes job security and is a valuable asset for organizations to embrace. Yet, many senior leaders still consider this topic taboo. As an HR expert, it is my job to help organizations and leaders see the positive support that pays transparency can bring to any size operation. Just because we have always operated a specific way does not make it correct, current, or even ethical. Organizations are meant to evolve while navigating future success, and pay transparency is just another step in the evolutionary chain.