Pay transparency generally improves employee retention rates, according to June 1 research from Payscale.
In fact, compensation transparency decreases intent to quit by 30% when analyzed in isolation, the organization said. When it comes to Generation Z, however, Payscale said pay transparency “surprisingly” increases job seeking behavior by 3%.
“This is likely due to younger workers being more motivated to change jobs for a larger salary, especially if they see higher pay ranges advertised and don’t understand the rationale behind their current pay,” the firm said. This finding underscores the need for standardized compensation strategies and clear communication about how compensation is set, it said.
Additionally, Payscale found that when employees believe their pay is unfair, they’re much more likely to leave. Employees may notice, for example, that their raises aren’t keeping pace with advertised salaries. That means employers must do more than post pay ranges, the organization said; “they must also communicate how pay is determined, why it is competitive to the market, and how it can be progressed.”
HR pros can work to provide total compensation statements that show employees how their pay is set and what other items factor into their overall rewards, experts previously told HR Dive. They also said it’s crucial that managers be trained to deliver these statements and be prepared to answer workers’ questions.