For those who are not familiar with the world of traditional publishing, something fascinating has been going on regarding pay transparency, that I think will have repercussions across industries—specifically in regard to discussions of diversity and inclusion. “The young adult author L.L. McKinney, who is black, started the hashtag (#publishingpaidme) on Saturday, hoping to highlight the pay inequality between black and nonblack writers.” As expected, many disparities began to emerge—along lines of race, gender, sex and many others.
In only a few days, articles have been written, writers have been pulling their intellectual labor from being published and publishing houses are vowing to do better—including a pledge by the world’s biggest publisher, to make Ibram X. Kendi’s illuminating book, “How to be an Antiracist” required reading for all staff. The NY Times ran this illuminating article. Even with white men not participating at the same numbers as others, the problem was clear. Turns out, there are many, many ways that systemic racism hurts us all, and this is the kind of thing that education and transparency really helps to fix.
“opacity allows inequity to flourish, as I think the numbers make clear.”
There have long been thought leaders in the corporate world, across many industries, calling for income transparency as one of the many ways to guard against conscious and unconscious biases that come out in pay and affect people’s lives. Companies like Whole Foods and New-York based analytics firm SumAll have adopted salary transparency policies. Buffer, a social media startup, took transparency a step further by publishing all employee salaries publicly on their website. In truth, the military and US government employees have had complete pay transparency forever, and while it doesn’t by itself solve the problem of biases at work, it goes quite away towards holding companies accountable for living up to what they say they are trying to work towards.
Pay transparency in the private sector is still quite rare, About 17% of private companies practice pay transparency, while 41% discourage and 25% explicitly prohibit discussion of salary information, according to a December 2017 report from the Institute for Women’s Policy Research. However, experts say that pay transparency is beneficial to employees.
So, if you are one of those cutting edge business leaders interested in building a strong growth culture that helps both your employees and grows your bottom line, here are some benefits of transparency to consider.
- Your Employees May Be Happier
There aren’t enough companies participating in pay transparency to yield solid data points, however anecdotal evidence suggest that employees are happier with pay transparency. “Hailley Griffis, Buffer’s public relations manager, says job applications to work at Buffer significantly increased after the company made its compensation data public. SumAll CEO Dane Atkinson told Business Insider in 2017 that transparency made employees more productive and collaborative. And a 2016 study published in the Journal of Business and Psychology found that employees were more likely to ask for help from the right people when they knew what their colleagues make.”
Another 2016 study shows that when employees don’t know what the others make, that employee tends to assume he or she is underpaid compared to others.
- Companies Can Close Pay Gaps
Employees will only be happy if pay transparency reveals that they are being paid fairly, which can help hold employers accountable on their goals to achieve diversity. Employees are better able to negotiate for fair compensation when they know what their counterparts are making, and employees are more likely to remain with the company when they feel they are being fairly compensated. Like it or not, this is a part of building a strong culture.
“However, there isn’t enough research to definitively link pay transparency to pay equality. At U.S. government agencies, most of which are required to publicly release pay information, women make 81% of what men make, according to the 2017 report from the Institute for Women’s Policy Research. In the private sector, where the majority of companies don’t have pay transparency policies, women earn 79% of what their male counterparts make.” This highlights that pay transparency alone isn’t enough to address all the of many ways that systemic biases come through in our companies.
- Companies Can Control the Narrative
With the way the world is rapidly changing, including COVID19 changing the future of work drastically and the Black Lives Matter Protests sparking an increased interest in pursuing the dismantling of systemic racism in our country, pressure on companies for transparency is only likely to increase.
As demonstrated by the authors who participated in the #publishingpaidme hashtag as well as the compiling of a growing public Google Doc sharing all kinds of payment and demographic information, the decision for payment transparency is not necessarily going to be left to business owners. We are seeing unprecedented grassroots organizing for social change. Jumping on this bandwagon will allow business owners who mean what they say about diversity, inclusion and culture to shape this narrative.
DANIELLA YOUNG IS A TEDX SPEAKER, AN AUTHOR, COMBAT VETERAN, ORGANIZATIONAL CULTURE-HACKER, HOST OF THE CULTURE-HACKING PODCAST, BOARD MEMBER OF OPERATION CODE, & THE CO-FOUNDER OF CAVNESSHR—AN HR-TECH COMPANY WHO’S MISSION IS TO MAKE BIG-BUSINESS HR AVAILABLE TO SMALL BUSINESSES, AND HELP YOU RECOVER HOURS IN YOUR WORKDAY. DANIELLA SPECIALIZES IN HELPING BUSINESSES CREATE CULTURE ROADMAPS, LEADERSHIP DEVELOPMENT PLANS & EFFECT TEAM TRANSFORMATION. WANT TO LEARN MORE? VISIT OUR WEBSITE AT cavnesshr.com.
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