Are Your Pay Practices Transparent?
We’ve all done it before, even people who oversee the hiring of other people. We’ve all looked at a job posting online and read through the job description and then scrolled to the end of the page to see if there’s a salary range. More often than not, there isn’t one.
Most companies who do not provide salary ranges for job postings do not do so out of a desire for secrecy. They do it because for years that’s been the common practice in many if not all industries. But that template is beginning to evolve and companies who wish to keep up with the changing landscape could benefit from hiring a compensation consultant.
In fact, more than a dozen states, as well as some municipalities, have passed laws on pay transparency*, requiring companies to provide pay ranges when they list job openings, and the laws passed by those states are beginning to affect how companies in neighboring states do business. Moreover, if a company employs people domiciled across multiple states, and one or more of those employees live in a state with payroll transparency laws, then the law essentially applies to the rest of the employees in the company.
Pay transparency is now essential
While the state in which your company is domiciled may not have a pay transparency law, if your neighboring states have such laws, some recent research shows that some candidates in those states aren't even applying for remote-only jobs if the pay ranges are not provided, as they view applying “blindly” for jobs without knowing the pay scale as an inefficient use of their time.
In addition, in the era of social media, word gets around, and prospective employees, especially in the younger generations, are beginning to breakdown the old taboos around speaking publicly about pay ranges. In other words, the days of companies putting pay scales inside a virtual “black box” and revealing the numbers on their own timetable are coming to an end.
Building a Strong Pay Transparency Structure
It’s well established that companies that reward their employees appropriately tend to achieve their goals and develop strong reputations as being good places to work, which in turn can make it easier for them to attract and retain top talent. Pay range transparency can be a key factor in enhancing an employer’s reputation. However, there is more to being transparent about pay ranges than merely disclosing them in job postings.
Before companies get to that point, it’s highly recommended that they establish an internal framework, or pay range structure. Once a structure is created, you can place the job titles onto a Job Value Matrix using the market data. You can then see all the vertical and horizontal pay hierarchies for the different job families on a “placemat” sized view of job relativity.
But if a company has never been through this process before, it can be a daunting task. That’s where hiring a compensation consultant can provide a big advantage.
Five key questions a compensation consultant can help you answer:
- What is the organization’s philosophy around their total rewards package?
- Do you make salary decisions on a case-by-case basis?
- Do you have pay ranges to articulate?
- Do you compare your organization’s pay practices against others, and which ones?
- Are you getting sufficient ROI on your compensation spend?
Once these questions are answered, a pay structure can begin to take shape, as it’s easier to determine where each job belongs in the hierarchy and what the pay ranges should be. Then, once the structure is in place, employers can begin to talk to their employees about it, and what factors went into its development. For example, sharing details about the compensation study the consultant conducted, the investment that went into developing the structure and moving employees to a more competitive stance, and the overall thought process that led to the final decision regarding salary ranges and pay adjustments.
Studies have shown that once the employees know about the company’s salary structure and where they stand, it can enhance engagement, overall satisfaction, and potentially lead to better financial results.
How Newport Supports Your Pay Transparency Strategy
Our compensation consulting specialists can help organizations of any size develop compensation programs that incorporate pay transparency practices suitable for their specific needs. Once that structure is in place, they can assist in developing an overall compensation program that increases competitiveness and improves the organization’s prospects of attracting, motivating, and retaining top talent.
Our suite of expert services includes:
- Total Rewards Philosophy Statements
- Workforce and executive compensation and benefits benchmarking
- Annual and long-term incentive program design
- Transaction and retention bonus plans
- Deferred compensation and supplemental executive retirement plans
- Association or custom compensation and benefit survey initiatives
- Board compensation and CEO evaluation support
If you’re ready to take a more strategic approach to pay transparency, or feel you need to address broader compensation or other benefits-related topics, please contact us to find out how we can work with you to craft a total rewards plan that’s perfectly suited to address your unique set of challenges and goals. Compensation Consulting Services
*Source: salary.com staff; (Salary Transparency Laws by State: 2025 HR Compliance Guide)
