Can pay transparency affect your chances of getting a new job or a salary hike?
Knowing if you’re paid well for your work is a mystery clouded in a lack of information
Knowing if you’re being paid fairly for the work you do is a mystery shrouded in a lack of information. That may be changing, though, and pay transparency may be the catalyst. It’s a growing trend for companies to reveal what a job opening or current position pays — whether voluntarily, or because it is mandated.
Navigating salary ranges
Several companies worldwide are now increasingly required to post general salary ranges indicating the minimum and maximum pay. Rules vary: Sometimes only job applicants must be told, while other times current employees can also request information about their pay range.
Roberta Matuson, president of US-based Matuson Consulting, consults with global companies looking for top-tier talent. She believes pay transparency “is a step in the right direction.”
“Knowledge is power. So, you know, if you have no idea that you can possibly earn more money, then you wouldn’t even ask for it,” Matuson says.
Knowledge is power. So, you know, if you have no idea that you can possibly earn more money, then you wouldn’t even ask for it
Is this the end of salary negotiation?
Pay transparency won’t eliminate salary negotiation, says Lexi Clarke, vice president of people at Payscale, a global provider of compensation data and services. Instead, Clarke says it will encourage discussions of current and future pay expectations.
It will help employees and candidates “understand what their expectations should be, and where (salary) boundaries are and where there might be flexibility. It levels the playing field between employers and candidates to have a more open and transparent conversation,” she says.
In the past, companies worldwide would often base salary offers on what an individual earned in their previous jobs, Seikaly says, but not as much now.
If a potential employer asks for your salary history, Matuson says, “I wouldn’t refuse to answer; I would say, ‘Well, tell me what you’re offering for this position.’ I would just turn the question around.”
What if you're at the low end of pay range?
If you find out you’re at the lower end of a salary band, Clarke says pay transparency will help you communicate with an employer about what you think you deserve, “And you’re anchoring that all into data, which is really powerful,” she adds.
Matuson says to ask your employer how you can add more value and what skills you need to increase your pay and opportunities for promotion. And it’s not just about money, she adds.
“There are other things that you could ask for,” Matuson says. “For example, you could say, ‘It would help me if I could work from home two days a week so that I’m not spending more on fuel. Would that be suitable?’”
It will help employees and candidates understand what their expectations should be, and where (salary) boundaries are, and where there might be flexibility
And if you're at the top of the pay scale?
What if you find out you’re at the top of your job’s pay band? One result could be pay compression at the top of a pay scale, with the highest-paid workers facing increasing resistance about salary hikes. Should you worry that you’re maxed out and might be among the first employees to be cut?
“Well, I think you should always be thinking, ‘I might be cut,’” Matuson says. But she adds that even if you’re not actively looking for a job, call a few job consultancies to determine pay scales for your current work and potential opportunities.
If you’re trying to determine a suitable salary for where you are in your career, several websites offer tools that help you see a relevant range of pay. Check out Payscale, Indeed, Glassdoor and Salary.com for such tools.