Some say wage transparency is essential for workplaces to narrow the gender pay gap, but local experts say employers should go beyond merely disclosing all workers’ salaries — a practice many Pikes Peak-area companies do not currently favor.
A recent study conducted by national staffing agency The Creative Group indicated 77 percent of companies in the creative industry think compensation information should be shared with workers, while 34 percent of those organizations say they are fully transparent and disclose compensation information for every employee to their staff and the public.
However, as of April 1, only 20 percent of the more than 700 job openings posted by the Pikes Peak Workforce Development Center to state database ConnectingColorado.com listed a salary or salary range, said Jennifer Pierceall Herman, the center’s industry relations manager.
“There seems to be a lot listed as ‘negotiable’ instead of a salary or salary range,” Pierceall Herman said.
The reasons for that vary, she said. Some employers want to keep employees’ salary information private, or at least disclose it only within the company.
Sometimes, it’s as simple as that information getting lost in translation, as many businesses advertise job openings across a variety of forums, Pierceall Herman said.
“Many companies will post [that information] on job listings on their actual webpage, so people can go to the company’s website to find that information,” she said. “It seems like when the postings are out on different job boards, salary ranges aren’t listed often.”
Whatever the reason, lack of employee compensation information is one of the main deterrents for potential job applicants, Pierceall Herman said.
“In such a tight labor market, it’s important for companies to share as much detailed information as possible so they can attract the most candidates,” she said. “It may seem like a safer way to go with ‘negotiable,’ but that’s a downside as well, because most job seekers won’t apply at all if they don’t know at least a ballpark.
“Having more transparency, applicants will believe that company to be more trustworthy,” she said.
The Colorado Senate last week passed the Equal Pay for Equal Work Act, which would allow employees who feel underpaid due to their gender to sue their employer without first approaching the state Department of Labor and Employment, as is required by current law.
The bill — sponsored by four female legislators, all Democrats — also would require companies to post job openings with salary ranges to all employees, regardless of their qualifications, and would prohibit employers from asking about a job candidate’s salary history.
Salary history is perhaps one of the biggest culprits in perpetuating the gender pay gap, said Marnel Mola, director of the Employers Council’s southern regional office in Colorado Springs.
According to the Institute for Women’s Policy Research, the gender wage gap in Colorado has narrowed in the last 15 years. However, women working full-time still made 86 cents on the dollar compared to men also working full-time in 2016.
“The thought is by [asking about salary history], you are perpetuating pay inequity because historically women are paid less than men. If [a man] is already making more, even though they might still be in the same salary range, I’m going to base my offer based on what they’re currently making,” Mola said. “It does continue to potentially perpetuate that inequity, and men typically tend to negotiate, where women don’t always.”
The bill does allow companies to pay workers in the same position different salaries if employers can prove that decision is based on other factors, such as seniority, merit, education or experience.
“We have to be able to defend if my male counterpart makes more than me. It has to be because he has more experience or tenure, or is a better performer,” Mola said. “You can differentiate pay; you just have to be able to show it’s not for a discriminatory reason.”
FULL VS. PARTIAL TRANSPARENCY
While full transparency — making all employees’ salaries available to the entire company — can encourage companies to address wage inequities by making changes to their pay structure, workers also need to understand the logic behind those decisions for that process to work, Mola said.
“Without a clear policy and communication around it, it can cause issues,” she said. “Salary is extremely emotional for people, so if they don’t understand it, that can be problematic. It can absolutely cause turmoil and chaos if people see inequity in their mind.”
Partial transparency — disclosing salary ranges rather than exact figures for each position — can be helpful in showing workers where their pay falls within that scale, Mola said.
“If you truly are fully transparent and you list everybody in the company, it can encourage equal pay, but it’s really hard for people to understand the inner workings of why somebody is paid a salary,” she said. “Just by posting the range, at least employees know they’re being paid somewhere within that.”
However, even partial transparency can create as much confusion as trust, Mola said.
“Oftentimes we have different job families. Not every position is created equal,” she said. “If I don’t understand what that compensation is tied to compared to experience and qualifications, it can create confusion.”
A hybrid of full and partial transparency is likely the best route for most employers, Mola said. Even more importantly, however, employers must determine the worth of each company position independent of a potential employee. They should then use that information to develop a policy that will help determine salary ranges for those positions, Mola said.
“You need to determine what the job is worth by taking the person out of it — based on the market and your ability to pay, not all based on an individual,” she said. “You’re going to have individual pieces in there, but hopefully not having anything to do with their gender. It’s based solely on what they’re bringing, versus who they are.”
Whether companies opt for full or partial transparency, neither policy is effective without an open line of communication between employers and employees, Mola said. Without communication, employees will turn to websites like Glassdoor to compare their salaries against market value.
“If employees know how a company has determined how we’re going to pay people — where we get the information to base our ranges — that’s extremely beneficial,” she said. “[Employees] are creating their own story about how we pay people if we don’t communicate it. Perceived inequity, whether it’s there or not, can create morale issues.”