Recently, several states have or plan to pass pay transparency laws—bills that require employers to post salary ranges in job listings. These actions are prompting many organizations to get ahead of these changes, often disclosing pay range information before it’s required by law.
While sharing pay ranges externally has its own challenges, making these details public will cause employees to explore where they fit: Are they at the top or bottom of the scale? Is it time to ask for a raise or leave for a better-paying job?
This new focus on pay transparency is the perfect opportunity to refresh how pay information is shared with employees. Being more open and transparent about compensation will help your organization:
- Attract top candidates
- Build internal trust and retain high-performing employees
- Create a more inclusive culture
- Support compliance with pay transparency laws
Before you jump into communication tactics, take a step back to ensure you’re thinking about this challenging issue from your employees’ perspectives. Here are three steps to consider as you build your pay transparency communication plan:
1. Assess your situation
Compensation can be complicated. Many employees may not have a clear understanding of how pay works at your company. Having baseline data on awareness and knowledge will provide powerful insights when setting objectives and creating your internal communication plan. If you don’t have existing research, here are strategies to consider:
- Conduct a brief audit. Review your communication channels and understand how pay and compensation topics are currently communicated: tone, details, level of transparency, audiences (such as people managers) and frequency. Use that as a jumping-off point for objectives. Does communication need to be more transparent? Are there tools to help people managers answer questions? An audit will also help you uncover communication priorities. For example, if pay is not communicated regularly, you may need to build foundational knowledge into your plan.
- Host interviews. Start with the HR team—the compensation professionals. What are they hoping to accomplish with their policies and programs? Are there plans for changes? Then, grab a few employees from different areas of the business and ask high-level questions. Interviews are a quick, casual way to assess knowledge and general views on pay.
- Research other companies. With the new focus on pay transparency, there are great examples of how organizations are tackling the issue. They can be a great source of inspiration as you develop messaging and communication tactics.
2. Craft your compensation story
Pay transparency isn’t just about the what (the dollar amount). It’s also about the how and why. It’s important to help employees understand big-picture ideas about pay at your organization. This is where a narrative is helpful. It’s a story or a set of key messages that:
- Clearly explain your organization’s approach to pay—your philosophy and policies
- Inform and focus communication so employees clearly understand the approach
- Provide a road map for those with communication responsibilities to deliver consistent messaging
Start with these three questions when building your organization’s compensation story:
- What is our pay philosophy? This should describe the decision for how pay at your company is determined. It should outline the components of pay and the pay structure, including overall cash compensation, benefits and rewards. Consider how this philosophy aligns with company values and articulate the level of transparency the organization is committed to when communicating about pay.
- What are the benefits of pay transparency? Whether it’s attracting candidates or driving a more inclusive culture, finding a way to weave in the value proposition will help stakeholders understand the why behind sharing pay information.
- What actions (if any) need to be taken? This is where you explain how employees can learn more about pay, such as changes to your processes or new ways to access information.
Note: Actions may change across your key audiences, such as managers vs. general employees.
Remember, this isn’t one and done. Your compensation story should be an ongoing part of compensation and rewards communication. Consider embedding messages into onboarding, annual performance management and more.
3. Prepare leaders and managers
Once you’ve established your pay philosophy and developed a set of key messages, it’s time to put it in the hands of those who will be your spokespeople: leaders and managers. Employees often turn to them first when they have questions about pay and salary. Tools, resources and guidance will help them to not only deliver the message, but prepare them to deal with potentially tough conversations. Set your leaders and managers up for success by:
- Providing answers. Those who may need to address compensation questions from employees should not only understand their communication role, but they should also know how compensation works: how base salary is set, how ranges are determined, and factors that are considered (including location, role and experience). Create tools such as key messages, FAQs and detailed guides to provide details and answers. By giving leaders and managers what they need to talk about pay with their employees, you’ll ensure those conversations are informative and productive.
- Providing training. Host a workshop to help leaders and managers understand how to have compensation conversations. This also provides a forum for leaders and managers to build their knowledge.
Pay transparency is a powerful initiative that can encourage a more equitable workplace. But with new external reporting requirements, employees will expect more open and transparent internal communication about pay. Are you ready?