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How to Ensure Salary Transparency: Top Tips for HR Professionals and Organizations

How to Ensure Salary Transparency: Top Tips for HR Professionals and Organizations

With soaring inflation costs and new laws employees are demanding more transparency in the job search - and beyond. Learn more about how salary transparency can help your organization attract and retain great people and create an equitable workplace.

Pay transparency is an unstoppable trend, and HR professionals and organizations need to face it and create transparent pay and career paths to attract and retain great people. In the aftermath of a global pandemic, the employee-employer relationship is in flux, and we are witnessing the tightest labor market in generations. Jobseekers are increasingly expecting more insight into how decisions on salaries, raises, and bonuses are made. Employers who give them the transparency they want can boost engagement and retention while competing more effectively for highly skilled people. With all of this in mind, one thing is certain: guaranteeing a fair salary is a must. Let’s take a look at some top tips for HR professionals and organizations.

Why is Salary Transparency So Important - and Why Right Now?

As the cost of living and inflation continues to rise, employees are becoming more and more concerned about their salaries. According to LifeWorks, employees across a wide cross-section of industries will receive an average annual pay increase of about 3.95% in 2023, but the increases will be lower than the rate of inflation, which rose to 6,5 % in July 2023 in OECD countries. The added expenses that are piling up due to global inflation are weighing heavily on employees. For example, a recent Gartner survey indicated 86% of employees feel they are underpaid, while a survey indicated 73% of companies feel they pay their employees fairly.

With these factors in mind, the need for salary transparency has never been more crucial. Employers are scrambling for the salary data they need to figure out what to offer new hires, and what to do for pay increases to retain the current workforce, with many organizations suffering from the consequences of the great resignation.

So, right now, the employee experience has never been more crucial. Employees don’t simply want to trade their time for money, particularly with wages that are dropping in real value month over month. Employees are increasingly seeking to be meaningfully incentivized for their work. With the need for salary transparency addressed, let’s now look at some tips that HR professionals and organizations can use to address this issue:

1. Establish a Compensation Team

According to Payscale, one of the biggest differentiators between top performing organizations and non-top performing organizations is the presence of a person or team dedication to compensation. A compensation team can help your organization to ensure market level rates, mitigate risks, and provide close alignment with finance. However, if your organization does not have the capacity to establish a compensation team, concentrate your efforts on a strategic compensation strategy.

2. Communicate Openly about Salary and Compensation

Most organizations want to have more pay transparency but are reluctant to share their pay practices. However, it’s important to be able to communicate pay decisions effectively with candidates and employees. Executed correctly, pay communications can foster trust within a company. According to Payscale:

  • 68% of organizations share pay ranges with employees but only 22 percent do so in the job ad.
  • 40% of organizations provide a total rewards statement to employees.
  • 54% do not train their managers on how to have conversations about pay with employees

Openly sharing the salaries of employees could soon become the norm at companies big and small, as employers look to create more equitable workplaces where people in comparable roles are paid similar wages. Establishing salary transparency from the get-go helps your organization improve its trustworthiness and transparency.

3. Define a Compensation Framework

Defining how people get paid and why they get paid that particular salary, is an important framework to ensure transparency and trust. To ensure fairness, make sure your framework is data-driven. Data-driven rewards evaluate factors like individual, team and company performance along with job range penetration, markets, employee history and internal equity. It’s a better approach that can align pay with the business strategy while helping HR root out bias.

4. Employ the Use of Technology

To create an effective pay transparency program, HR needs compensation software so they can ensure pay decisions are consistent and free of bias. From there, the data from the compensation decision can be shared with employees, increasing overall transparency, and giving employees insight into why particular compensation decisions were made. Questions such as where a company strives to position itself relative to the market, how much compensation will be fixed (base pay) vs variable (bonus), and how to maintain internal equity across different functions (job levels and ranges) should be answered.


If a pay transparency strategy is not on your HR road map, it should be! Employee expectations are rapidly evolving, and organizations that do not keep up, will inevitably suffer. To counteract the effects of the great resignation, concentrate on ensuring a salary transparency strategy.

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