The Case For Pay Transparency

Have you given much thought to pay transparency, or how it could affect your salary and career? If you had asked me a couple of years ago, I would have said no. But that all changed when I became friends with today's featured guest.

I'll introduce the resplendent Cara in a moment, but first I'll briefly touch on pay transparency.

What is pay trasparency?

Pay transparency is a policy that employers and companies have in place, which reveals compensation figures to people either inside or outside the company, or both.

Pay transparency can be full (salaries for individuals are divulged), or partial (salary ranges for positions are divulged). I like Payscale's definition, which states that pay transparency means "employees having an understanding of their company’s compensation philosophy, strategies and practices."

Why is pay transparency important?

Without pay transparency, negotiating your salary can be incredibly difficult. How many of us have heard stories from colleagues or employees (especially from women and people of colour) who found out their peers were making X% more than them - sometimes for years? Salary negotiation should be an informed discussion on the value of a given role - the key word here being informed.

In addition to more efficient salary negotiation, pay transparency ensures that employees are being compensated fairly, and it builds trust between employees and their employers. This is beneficial for all parties.

Another perk for employers - Emiliano Huet-Vaughn, an economist at U.C.L.A. ran a study in 2013 that found workers are more productive when salary is transparent. 

A Q&A with Cara

The amazing Cara!

I wanted to write about pay transparency now, because it's the end of the year and time to start thinking about performance reviews and salary negotiation.

There is no better person to help me share the importance of this topic than Cara.

Cara is my colleague, my friend, and a mentor to me. She is also one part of the dynamic duo behind Putting Her First, a blog that inspires women to put themselves first every day. I truly love Cara and Jen's blog because they go beyond the typical "lifestyle" topics, and share their real experiences. When I read their posts I always learn something, and feel truly touched or motivated.

I'm so glad Cara is joining my blog today to share her enormous wisdom and perspective with you! On to the Q&A:

As I progressed in my career, and started to attend more leadership events and women-led events, I learned more about this idea of "pay transparency". But I didn't give it serious thought until I met you and we had some conversations about it. It really fuelled a spark in me, to truly own my pay and salary. It was those conversations - in addition to your support and advice - that pushed me to ask for a raise (which I got!).

Do you remember when you first came across the idea of pay transparency? Can you talk about that, and why you think it's so vital?

I had never heard of pay transparency until I attended a conference a few years ago. I was intrigued, because for years it had been such a taboo topic. Over the next few years, I began to read more about pay transparency and began to really understand why it was so important.  

For many organizations, salary discussions amongst employees are discouraged. I personally believe the reason why organizations do not want employees to share salary information is because there are many inconsistencies in how people are paid, and pay transparency would expose that.

But regardless, I think it's a step that all organizations should make, as it could help with the following:

1. Promote fairness and help narrow the gap between genders and marginalized groups
2. Fix pay increase inequities, as they will have to be clearly defined and explained
3. Improve employee productivity, because people tend to decrease their performance when they believe they are getting paid less than their colleagues

There are some arguments against pay transparency, for example, some say that it could pit employees against one another, or that pay differences could be taken out of context. What are your thoughts on this? Do the pros you mentioned before outweigh these cons? 

I think pay transparency has more pros than cons.  I can see why people would think this could pit employees against each other, but I still think that pay transparency removes the favouritism that often happens around compensation.

It forces the employer to justify pay differences in a qualitative way - I'm not saying that pay transparency means that everyone at the same level should be paid the same. Instead, everyone at the same level should have a good understanding of why someone is paid more - and that is what pay transparency is all about.

As much as I support pay transparency in the workplace, I still shy away from sharing my salary with friends and family. I think this is an interesting topic that everyone I know feels differently about! I'd love to know what you think about this.

It is an interesting topic. I also do not share my salary with my friends. But, to be honest, I don’t really know why. I guess it’s because it’s something that is still considered an “off-limit” topic, so it never really comes up in conversation. However, if someone asked me, I wouldn’t be afraid to share it.

When it comes to my family, we are all very pay transparent, and we have been for many years. We are open with our salaries, as it isn’t something to be ashamed of in my mind.

I think the more you know about how people are paid, the better equipped you are to have pay discussions with your manager, etc.

Most of us don't work at companies that have effective pay transparency policies. I mentioned before that our initial conversations on pay transparency inspired me to ask for a raise, and I fully believe that I achieved it with your support :) Can you share your advice on how and when to ask for a raise, and any personal anecdotes so we can learn from your experience?

If there is one thing that I've learned over the course of my career, it's that if you don’t ask for something you likely won’t get it. This applies to so many aspects in my own career - from projects, to promotions and salary.

It comes down to knowing your worth and knowing how to articulate it. A lot of people go into raise conversations without a clear understanding of the “why”.

 So, my advice based on own experience is:

1. Do the research. Visit websites like PayScale and Glass Door, and gain a really good understanding of what people in your position, in your industry, and with your level of experience are getting paid.
2. Review your current job description, and start to make a list of all of the things you do that are over and above your current responsibilities.
3. Review the success rates of your projects, and collect feedback from peers and senior leaders, etc.
4. Build your business case (your “why”) by combing all of the information gathered in steps 1-3, and start to create your pitch for why YOU are worth more money.
5. Have a number in mind - do not ask for a range - have an exact number based on the industry research, and your internal pay scales for your job level.
6. Have the conversation with your manager. This can be scary or nerve-wracking.  But, what’s the worst that can happen? They say no, they give you the reasons why, and you can improve on those things - and then try again in a few months.

But you’ll never know if you don’t try. So, go for it!

My fave glam picture!!

Thank you so much, Cara! Cara and I would love to continue the discussion with you, so please leave a comment below or reach out to us on our social media pages. You can follow Cara and Putting Her First on Instagram and on Facebook. Don't forget to check out their blog and subscribe to their newsletter for a dose of inspiration in your inbox!

Thank you so much for reading :) xoxo