Internal pay transparency: How to prepare your team

5 steps for success

We’ve seen the stats and surveys on what pay transparency can do for your team, so what does it take to actually implement? Here’s our guide on how you can get ready for pay transparency.  

1. Build a compensation philosophy: what is competitive pay?

A good compensation philosophy tells people why and how you pay employees the way you do. The end goal is consistency and fairness. 

Start by taking a look at your company’s current state. What are the pay ranges for people in similar roles? Making pay audits can help you decide what’s working and what needs change. From there, update your comp philosophy based on company goals and the current market. Offering competitive pay means a salary range that matches the market and also includes in-demand benefits like health insurance and a retirement plan.

2. Educate managers and department leaders

Every manager should understand why you’re making the shift to transparency. Get everyone on the same page by explaining how honest pay ranges connect with equity, talent attraction, and retention. 

You also have to prepare managers to discuss pay with employees. It might seem awkward, but having a clear comp philosophy will make these conversations much easier and more productive. 

Here are some ideas of questions they should be able to answer:

• How does my pay compare to the market?
• Why does my coworker have a higher salary than me? 
• What can I do to get to the top of my position’s range?

3. Communicate to employees

Internal pay transparency requires making information easy to find and easy to understand. This means that even though town-hall meetings and email memos are usually standard, adding smaller meetings and 1-1’s can make conversations more personal and relevant. 

In some states like California, employees can request the pay range for their position. So another part of internal pay transparency is deciding how much information is given. And if your company has multiple locations, you have to consider if every employee can request, or only those in relevant states. Communicating these decisions ahead of time will save a lot of confusion in the long run.

4. Share with candidates

After formalizing internal pay transparency, it’s time to share your compensation strategy externally. The basic starting point is updating job descriptions. Decide on what info you want to include. Benefits? Compensation philosophy highlights? Keep in mind that 98% of workers value transparent salaries. 

Job descriptions make the first impression, but it doesn’t end there. Recruiters personalize the candidate experience and can discuss pay in more detail. Make sure recruiters know how to tell candidates where salary ranges come from and how you decide where candidates fall within a range.

5. Review and update regularly

Any time you make big changes in your company, it’s always a good idea to get feedback and evaluate progress. Some helpful measures can come from regular pay audits, employee surveys, and data on hiring and retention. Just remember that as your company changes and grows over time, so should your compensation strategy.

About Puck

At Puck, our mission is to make hiring more human. We believe that leading with transparency is the path for finding the right people for your team. That’s why we built our salary range tool. To help teams keep up with the labor market and make the right decisions. Stay up to date on hiring trends by staying in touch.

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