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4 tips to prepare for pay transparency

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As pay transparency legislation takes hold across the U.S. and globally, there are steps leaders can take to ready their companies and workforces.

Stephanie Varner, director of global compensation for Globalization Partners, a global recruitment company, shared tips Tuesday with attendees at the Society for Human Resources Management annual conference in Las Vegas. 

Establish pay ranges

Employers need to decide how much transparency they want. They can internally share salary ranges for an employee’s job, all jobs across the organization or a mix of both. “I like to think about pay transparency as a spectrum,” Varner said.

But, she warned, if you post pay ranges for some jobs and not all, you could face problems internally. Similarly, employers need to make sure they have reasoning for the ranges they do share. 

Analyze pay ranges

Employers need to have confidence in the ranges they’ve established, Varner said. That can look like having solid benchmarks and fully understanding how and why employees are paid what they are. 

“If it doesn’t make sense, you may have some work to do,” Varner said.

Pay range analysis also needs to be ongoing and can be assisted by technology, she said. 

Proactive or reactive

Every employer can decide if they want to respond to new regulations or be out ahead of them. 

“Have you thought about your strategy for compliance and if you are going to take that proactive or reactive stance?” Varner said. “Make sure that you as a company are comfortable with where you stand on that.” 

It’s also important to make sure recruiters are aware of job posting requirements so they can be compliant with regulations, Varner advised. 

“Be aware that transparency is a journey. Where you are today, where you want to get to tomorrow, that can be regularly changing depending on your journey and where you are in that, and it might take some time to get to your desired future state,” Varner said.

Educate recruiters and managers

Companies need to ensure recruiters and managers understand how pay is determined so they can explain ranges — and any discrepancies or misunderstandings — to candidates and employees, Varner said. 

She characterized manager training as a “critical next step.” 

“The goal here is to enable them to make equitable compensation decisions and have productive conversations with employees,” Varner said. 

Managers need guidance on how to differentiate pay and understand that two people in the same role will not always be paid the same because of skills, education or experience, she said.

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