Why we need far more transparency on pay

23rd May 2018

For as long as anyone can remember, salaries have been the root of confusing and highly inconsistent workplace politics.

While some companies are entirely open about who earns what at which level of the firm, others tend to be far more secretive.

The gender pay gap debate – some weeks after the publication of firms’ disclosures – is still receiving a great deal of media attention, and many conversations are taking place about all the other pay gaps that exist around areas such as ethnicity, disability and sexuality. So for those of us involved in people management, one big question needs to be answered:

Is it time for full wage transparency across the board – if not on precise figures, then at least on the ranges in which people’s earnings sit?

The question looks particularly relevant in the light of a recent Forbes article on US entrepreneur Lauren McGoodwin, who has made waves in the gender-pay debate with her initiative The Salary Project

Lauren’s platform aggregates data on female salaries across the US business landscape, providing women with a kind of barometer for what they could – or should – expect to earn in different sectors and parts of the country.

All the data is crowdsourced from real-life female employees, who have been only too happy to volunteer it.

Effecting change

As Lauren explains to Forbes, when she launched The Salary Project and canvassed female workers for the necessary information, it took off immediately.

“I was surprised at the response,” she says – “thousands and thousands of submissions in the first week! It proved to me that salary transparency is on the minds of women everywhere, and we’re not going to stand for just not knowing anymore.

“It made me realise how willing women are to share their salaries with each other if it means effecting positive change.”

Importantly, she noted, “it’s not just that people are passively curious, it’s that they need this information to take action.

“We’ve received emails from women who have used it to negotiate a job offer or ask for a raise – it’s amazing how empowering having those numbers can be.”

Hours of openness

Around the time the Forbes piece was published, I went to a Royal Television Society event called ‘Closing the Gender Pay Gap in Television’. The speakers included Harriet Harman and equality and diversity expert Charlotte Sweeney OBE.

One of the strongest messages that came out of the discussion was that greater transparency would resolve many of the problems that have grown up around pay.

One interesting way to tackle this would be for firms to set an hourly, and transparent, rate for each job. With that in place, you would address two problems.

Firstly, you would get the person out of the way – all of the issues around what individuals were paid in their most recent roles: an ever-escalating scale that tends to advantage men.

Secondly, you would eliminate the ‘discount’ – applied mostly to women – whereby someone working 25 hours per week on a certain brief is paid less, per hour, than someone working 40 hours per week on an identical brief: a policy that would seem to be intrinsically unfair.

As well as depersonalising the issue, set hourly rates would address the casualisation of some industries, in which workers are increasingly being paid on a project basis.

So setting hourly rates amid a climate of openness would allow greater transparency for contractors. And that could only be a positive step.

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