Pay Transparency – Should you disclose salaries?

Many employers feel that talking about salaries leads to hires that are only interested in the financial aspects of the position. Others don’t want to tip their hand to competitors. But a strong case for discloure can be made for organizations seeking to attract top talent, improving morale and reducing hiring costs.
One of the biggest taboos in the workplace is: should companies be transparent about how much their employees are paid? Most companies are very strict about revealing the salaries of it’s employees, but some are embracing a culture of openness that is taking the sting out of pay discrepancies.

The PROS of being transparent

Imagine walking into a store to purchase something only to find no price tag and have the store clerk ask you what you think the item is worth. The clerk has a price range in mind, but he won’t tell you. Very few transactions take place in this manner and this practice doesn’t sit well with job seekers. If you’re trying to attract top talent, you need to be aware that not posting a salary range could send a signal that you’re not being upfront. Many job seekers don’t even bother to apply for jobs with no salary information, feeling that it’s a waste of time.
Additionally you need to consider the effect of non-disclosure on company morale. Namaste Solar is a company that embraces what CEO Blake Jones calls “extreme transparency.” Jones, who used to work for a subsidiary of Halliburton Co. hates the thought of company gossip, especially when the speculation is almost always wrong.
“We’re saying, ‘Here’s the exact information. We don’t want you to incorrectly speculate.’ It’s all very clear. We even share what total compensation is — the cost of all health insurance and payroll taxes and everything else.” he states.
Another consideration is the ethical standpoint. “Without transparency,” says Jane Garthson, president of the Garthson Leadership Centre, “how can you tell whether an organization pays both women and men fairly?” Audra Williams of Townhall Communications agrees: “Studies show that women don’t negotiate salaries or talk about money. This pay equity issue is aggravated by not knowing what a job will pay. Knowing a salary range would be a big boon for pay equity, but it’s often viewed as aggressive or greedy to talk about money.”
Finally, not disclosing a salary range when recruiting can lead to huge waste of time during the hiring process. WInnowing through stacks of resumes from under- and over-qualified candidates can lead to a lengthy recruitment process.
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