As more states and municipalities pass pay transparency laws, companies need to view it as more than “a compliance exercise,” panelists said during a webinar Thursday hosted by consulting firm Mercer.
“This is reflective of your culture,” said Ben Carter, senior vice president of talent services and rewards at Workday, a system software company. “You really should be thinking about this much broader than a compliance exercise and [think] more about, ‘What is our approach going to be? How does this align with our culture? How does this align with our core values?’”
While on paper, pay transparency means sharing salary ranges, in practice it means evaluating how you compensate positions, how you explain and support those compensation structures and how you communicate that information internally and externally, panelists said.
Workday established a set of guiding principles for creating its pay transparency model, the most important of which was, “Whatever we were going to share externally with candidates, we wanted to make sure we were comfortable sharing internally with our employees,” Carter said. “I think having that consistency in what you share externally and what you share internally is important. I do think it's going to have a profound impact on employees choosing to stay or go at a company.”
Tamara Gordon, head of global compensation programs and process at clothing company PVH, said her organization considers the goal of salary transparency laws — to achieve pay parity and close the wage gap for underserved and underrepresented populations — as it builds out salary ranges. The company is planning to develop training programs and toolkits to help explain job structures and how ranges were developed.
Adobe has shared salary ranges with managers and employees for the past decade but, like other companies, has had to figure out how to share that information publicly in light of new pay transparency legislation, notably in California, said Rosemary Arriada-Keiper, vice president of global rewards for Adobe.
Adobe opted to establish national pay ranges that recruiters further break down as candidates progress through the hiring process.
“There was a lot of conversation and concern around how this would potentially impact our competitive advantage,” Arriada-Keiper said.
Arriada-Keiper expects Adobe to take a similar approach as it expands pay transparency into other countries by sharing broad national pay ranges, rather than specific ranges for a position based on its location.
“We probably won’t preempt it in the way that we did with the U.S. In the U.S., we decided we were going to go national and post for every location regardless of whether that state had legislation required or not. I suspect that globally we will take a different approach,” Arriada-Keiper said.
Companies need to consider how employees across the world will react knowing their U.S. counterparts have greater insight into their salaries, said Workday’s Carter.
“If you are just looking at this as a U.S. initiative, you have your head in the sand, and you’re going to have to dig out from that and understand how you’re going to expand this internationally,” Carter said.
Workday plans to implement pay transparency across its global footprint in a phased approach, using its experience from the U.S. rollout to inform its practices worldwide, Carter said. International expansion could happen as soon as next year, he said.