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Why is salary transparency becoming a necessity in career hiring?


Pay transparency is a company practice of being transparent about salary information. Current and incoming employees are able to access information about their earnings, how they are calculated and pay ranges for different positions in the company. 

What was once considered impolite is now a conversation that is becoming normal and acceptable. A recent survey about pay transparency shows that almost half of Generation Z  workers are straightforward in discussing their salary, while only 31% of  Generation X and 19% of Baby Boomers are comfortable about pay transparency.

Levels of Pay Transparency 

It is true that employees become attracted to and stay at a company for reasons such as perks, benefits, work-life balance, schedule flexibility, opportunities for growth and many more. But good and fair compensation still is a huge factor for job satisfaction.

Pay transparency allows for employees to feel either well-compensated or underpaid, thus affecting their level of job satisfaction. Because of this, companies may express pay transparency in three levels. 

Full transparency 

Despite the openness of people in talking about pay, there are still a few companies that reveal employee salary to every member of the company. In full transparency, you can see how much all your co-workers’ net pay, from top to bottom of the organization. In fact, some companies have taken it to the next level; they made the list public! One such company is Buffer, a social media related tool. Others practice full pay transparency by making their list available to all company employees, but not to the public. 

Advantages of full transparency

  1. It eliminates gossip among employees. There is no secrecy in how much others make. 
  2. Usually, pay among people doing similar jobs are equal. 
  3. Since the pay for higher level positions are revealed, those who have desires to be promoted can use the information about the possible income as a motivation to work harder. 
  4. Job applicants to companies with full transparency do not have to negotiate as much during hiring. 

Disadvantages of full transparency

  1. Those who have been working longer for the company may feel it is unfair that new employees who get a similar role also get the same salary as them. This may vary if the company takes into account their length of employment as a factor to increase their salary. 
  2. Even Though tasks are the same, employees might give different levels of effort in doing their job. The one who works harder may feel that they have to have higher pay. 

Partial transparency

For companies that employ partial pay transparency, information about employee salary comes in salary ranges. Commonly, data about salary range can be found online through job reviews. This pay level of transparency is now becoming the most common kind. 

Advantages of partial transparency

  1. Companies have more flexibility in their pay offers since they publicize only the salary range for job positions. They can base their offer from work experience, job performance, and length of stay in the company. 
  2. The hiring team has more power or leverage when offering the job to candidates. 

Disadvantages of partial transparency

  1. Since there is a salary range, some employees may aim for a higher pay, while those who don't accept the lower part of the salary range. 
  2. There might be a feeling among employees that some receive a higher salary than them which might affect job performance. 

No pay transparency 

Nowadays, fewer companies keep the salary under wraps at the application stage of the hiring process. 

Advantages of no pay transparency

  1. This gives employers the power to offer the widest range in salary for employees who work at similar roles. 
  2. The hiring team has the power to assess each candidate’s work background and skills and assign their salary. 

Disadvantages of no pay transparency

  1. Employees would regularly doubt whether they are paid correctly or not. It increases the chance of office gossip about pay, and causes conflict. 
  2. Many candidates feel unsure about applying for the job because they would only know the salary range during the initial hiring process. 
  3. There will be a huge pay difference among employees. 

Since employees now have more protection against pay gaps due to gender or race, companies and their hiring teams have to exert more effort to make employees trust them. You can use the level of pay transparency in your company to make employees more motivated and productive. It really pays to build a healthy workplace! 

Are you in search of  a fulfilling career in health care? Find out how you can connect with high-quality job opportunities across the US! 

Why is salary transparency becoming a necessity in career hiring?
Brandon Resasco