Would you apply for a job if you didn't know the salary? According to a Monster survey, 53% of respondents said they would only apply for a job with pay transparency upfront. The initiative to close the gender gap and pay equity has given way to the recent pay transparency legislation.
While a core part of pay transparency is salary transparency, another part is transparency in the total value of the compensation package offered to employees. It's up to HR leaders to ensure that they are offering a fair compensation package to attract and retain employees.
At its simplest, pay transparency requires employers to post salary ranges on job postings. Several states—Colorado, New York, Washington, California, Connecticut, Maryland, Nevada, Rhode Island, and Hawaii—have passed legislation that promotes salary transparency. It's also why you've probably seen some geographic restrictions prohibiting applicants in these states.
Many companies view pay transparency as a negative, but it benefits companies more than harms them.
There are several benefits of pay transparency:
Salary is just one part of an employee's overall compensation. Employers should be open about all details of their employees' compensation packages. While everyone knows their salary, many have yet to learn of the actual dollar value of their employee benefits. And the value of their employee benefits can amount to upwards of 20% of their total compensation. If employees don't have the value of that information, they greatly undervalue their compensation, which can frustrate them.
This includes PTO.
If your company has an accrued or lumpsum PTO policy, employees' PTO has a value attached. While many associate PTO with time off they can take, it's a convertible benefit; employees can take the value of their PTO and convert it into other uses. Employees can turn their unused PTO into financial wellness benefits, wellness benefits, and philanthropic efforts.
Not only does this allow employees to create custom benefits packages, but it also offers employers a differentiated benefit they can offer. While competing employers can likely match salary, benefits can be the deciding factor between two companies for candidates. This can work to your advantage if your budgeted salary is lower than other companies hiring for the same role—competitive benefits may be the factor that tips a candidate's decision in your favor.
There are several actions that employers can take to encourage transparency across total rewards compensation:
The pay transparency initiative isn't going away anytime soon. But salary transparency alone won't cut it; pay transparency extends to the total compensation package. Learn how PTO Exchange offers convertible PTO as a differentiated employee benefit.