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JoDee 00:02
70% of organizations that list pay ranges on their job postings say that doing so has led to more applications. 66% of organizations say the quality of their applicants has increased.

JoDee 00:20
Welcome to The JoyPowered® Workspace Podcast, where we help HR and business leaders embrace joy in the workplace. I’m JoDee Curtis, owner of Purple Ink. With me is my dear friend and co-host Susan White, owner of Susan Tinder White Consulting, also an HR consulting practice. In the last year, compensation has been one of the hottest topics, not only in HR, but just in business overall. There is competition for talent, wage pressures, many new state laws, and lots of pay equity questions, just to name a few. We won’t tackle all of these issues today, but we will offer some overall advice on compensation, and then we will specifically talk about pay transparency. Susan, why don’t you start us off?

Susan 01:23
Sure. Number one, develop a compensation philosophy. Consider, do you want or do you need to pay the top of the market to be the leader in your industry? Do you want to pay at the low end of the market, but also offer a lot of flexibility and above average benefits? Or do you fall somewhere in between? However you’re thinking about this is okay, but as long as it’s really part of a strategy. What is going to appeal to your candidate pool? What’s going to help enable you to compete with your competition for the kind of talent that you need? And then you really want to be transparent and consistent in your communications about it.

JoDee 02:01
And number two, pay your employees a fair wage. There are lots of different sources to determine the market for each role. Understand what they are, where the data is obtained – and what I mean by that is that some sources come from employees entering in their own pay, and some sources come from employer-reported pay – and understand its validity. Sources can range from hiring a compensation consultant to purchasing data to viewing the Bureau of Labor Statistics, Glassdoor, or Salary.com. There are both free and paid versions, and many more, I’m sure. You’ll need a good job description, though, before even starting to think about compensation structures.

Susan 03:00
Number three, be prepared to explain and market your compensation philosophy both internally to your staff and externally. Firms paying closer to the midpoint of market rates can focus on other benefits, including remote work, flexibility, other incentives, and paid time off to remain competitive. Larger companies and/or specific industries are more likely to pay above the midpoint, but they may also be more likely to push employees to return to the office, as an example. So there could be a tradeoff, and you want to make sure that you’re amplifying that. Train, prepare, and practice these conversations so that leaders and managers understand and can consistently explain them and market your place as an employer of choice.

JoDee 03:48
And number four, review or audit or have someone else come in and audit your internal equity. Look at disparities of pay ranges based on individual’s gender, their race, their tenure, or any other factors. With more transparency, you will want to be able to explain any inconsistencies. Organizations with confidence in their structure and data will be more comfortable in posting and sharing ranges, and you’ll have better conversations with employees. Now let’s focus more on pay transparency. Specifically, conversations about pay have been difficult for employees, employers, and candidates for many decades, and also even during the offer stage, during performance reviews, at times of promotion, and even when employees leave the organization. In general, most pay conversations have been clouded in secrecy and the issues can be real or perception. People may perceive that they’re on the low end of the scale or that their buddy makes more than them, or they may know what those numbers are. And we need training on how to do this well. According to research conducted by PayScale, only 49% of companies train their managers and leaders on how to have these pay discussions. It can be a long process, though, as we mentioned earlier. It starts with a philosophy, good job descriptions, understanding the market, how the market was determined, specifically sharing the employee value proposition and adjusting the gaps or discrepancies between current pay and market to be fair and equitable.

Susan 05:57
With a clear plan and training, everyone should feel empowered, able to ask good questions about their pay, and there should be trust created on both sides like never before. But we recognize that this takes time. And with so many states enacting pay transparency laws, your organization may need to be ready soon. Maybe right now, maybe yesterday.

JoDee 06:21
As of May 2024, eight states require employers to publicly post salary ranges for open positions. Illinois has also passed a statewide pay law to be implemented in 2025. And then the District of Columbia and an additional 15 states are in the process of considering pay range transparency bills. I believe it won’t take long for all states to implement these. There are some complications with them, but overall, the intent is positive, and I believe will be good for employers and employees. For one, the laws are not exactly clear. The recently enacted New York state pay transparency law, for example, states that the range may extend from the lowest to the highest hourly range or salary that the employer in good faith believes at the time, at the time of the postings, that it would pay. Well, here’s an example of one. Lulu Seikaly, a senior employment counsel at PayScale, a compensation data company in Seattle, recounts seeing a company post a range of $90,000 to $900,000…

Susan 07:50
Oh, come on.

JoDee 07:52
…for an advertised position. She said, “I would put a lot of money on a million dollars not being a good faith range.” When she looked closer at the job posting, she saw that the stated range took into account total compensation, which can be bonuses, incentives, all kinds of stuff.

Susan 08:13
Sure.

JoDee 08:14
Well, that is not the law. The law says that you need to put post base salary only. And the intention of the law is to allow candidates to come into a level playing field to negotiate their base salary.

Susan 08:31
So let’s talk a little bit about enforcement. Many wonder if these laws will be enforced if all com – and if all companies will comply. We suggest that employers understand that not only is it the law in many states, it’s about trust. Do you want your employees seeing that you’re not complying? Rising market pay and more transparency have not made it easier for the employers. The labor shortage, a renewed focus based on skills versus education and certifications, higher interest rates, rising other costs, the #MeToo and Black Lives Matter movements, and the pandemic have all substantially impacted pay just in the last four years. It certainly has been warranted, just more difficult to keep up with it. With the increase in laws and overall push for equity, there has generally been an increase in pay. It is unlikely that companies will reduce pay of those at the higher end of the pay range, so it is more common to see those in the lower end increased. If there truly is a difference in the job responsibilities, though, those could be affected by defining different roles and/or by reducing pay but adding bonuses or incentives.

JoDee 09:44
So why is all this good? I think if you’re listening and your company has always kept this hush hush and very secretive, it sounds like a pretty scary deal. But let’s talk about the good news around them. When compensation is shared early in the process, like with a new job candidate, or – but it could also be when someone gets promoted or takes a new internal position, then we avoid mismatched expectations. Companies are more likely to attract the right candidate for their job openings, and employees are more likely to feel that they’re being fairly paid for their role, and companies know they’ve acquired a needed talent for the right cost. Pay transparency laws are popular among the job seekers. Recent SHRM research indicates that more than 80% of US workers are more likely to consider applying for a position if the pay range is listed in the job posting. Companies, though, also like – likewise report positive outcomes from this. SHRM research also found that 70% of organizations that list pay ranges on their job postings say that doing so has led to more applications. 66% of organizations say the quality of their applicants has increased.

Susan 11:22
Wow.

JoDee 11:23
Yeah, it’s good. Good on both sides.

Susan 11:26
Yeah, sure is. So you might be asking, you know, does transparency really work? US researchers also point to the lower wage gap among men and women who work in the public sector, where transparent pay structures have long existed, as further evidence that transparency will have a similar impact in the private sector. The US Office of Personnel Management reports that women earn 94.4 cents for every dollar men earn in the federal workforce, far higher than the current 82 cents earned by all US women outside of the federal government.

JoDee 12:01
Yeah. Something’s working there, then.

Susan 12:04
Yeah, exactly. There is a similar experience for union members who have a narrower gender wage gap, compared with non-union members, perhaps in part because unions help procure transparency in wages, including greater access to salary information. Cullen, a professor at Harvard Business School, said, “The papers I’ve worked on have shown that when employees gain access to more market level data about wages, we see greater equality and pay across firms for a given position. We see wages and retention for lower-wage workers rise.” When we experimentally introduced pay into the career path, we saw employees increase their efforts, their motivations, their pay, of course, and their measure of satisfaction. Pay and pay perception can also have a big impact on retention. PayScale research found that turnover increases if employees think their pay is unfair, and that improving fair pay perception can reduce intent to leave by 27%.

JoDee 13:06
Nice. But it’s all about communication, right? We can’t just do these things. We can’t just post job salaries and not have great communication around it. So managers and leaders must commit to communicating with all employees on how pay decisions are made, along with clear steps that they can take to increase their salary and move up the ranks. By the way, I didn’t think it’s just about moving up the ranks. You know, some people may want to become specialized in their particular area or be more of a technical resource.

Susan 13:48
Sure.

JoDee 13:49
But they can still learn how to increase their pay by doing that. To do this well, HR must train managers on these conversations. This includes a combination of the compensation philosophy, benefits, pay ranges, career paths, and an ongoing, consistent communication. Employees who don’t trust the process may leave for a place that will. But for our HR friends, it can’t all be about HR. Leadership and managers must also be consistent and reinforce these conversations along the way. I think we have a lot of work to do in the area of pay, but we have made a lot of progress again, even just in the past four years.

Susan 14:43
So, JoDee, as a small business owner, and you have – oh, gosh, I know it varies from points of time in the year, but you know, you’ve got a couple of dozen employees. Do you – you’re in Indiana, and I imagine that we – I know we have no pay transparency laws yet, but I do agree with you that eventually we will. If not federal, the state will eventually get us there. But do you currently post your salary ranges, or is this something you’re thinking about doing?

JoDee 15:10
You know, I have to admit after all this conversation that we do not post internal salaries. You know, there’s, there’s not a whole lot of us, as you said, we have about a couple of dozen, we have a lot of part-time people, we have some contractors in there who work a wide variety of different schedules, and I think we offer a lot of flexibility and benefits for those who are full-time employees, and it has never been an issue for us to attract people. We are big believers in – when there are new positions, in posting ranges, and we do do that when we post new positions there. I’ll admit that when clients hire us to post, we typically will post for their roles versus ours.

Susan 16:09
Sure.

JoDee 16:10
It’s easier for us to post pay ranges for our clients, because we post blind ads, so they don’t know who the company is, but I, I just think it saves a lot of time in the recruiting process when you set those expectations up front. You don’t get people apply who want to make twice as much as the pay range and…

Susan 16:34
Right. Right.

JoDee 16:36
You know…

Susan 16:36
Yeah, I think, I think that I’ve been convinced. I’ve been turned into a believer. Early in my career, you never talked salary. You never – I mean, it was just, you know, bad form. Now it’s like, put it on the table. Yeah, let’s not waste your time, our time, anybody’s time. And move forward.

Susan 16:55
So JoDee, we have a listener question today. That question is, “In a new world of telecommunication and meetings being done online, what are some book suggestions or authors that we should be reading about this new frontier in meeting styles?”

JoDee 17:12
So I have to admit, and I’m a big reader, but I have not read any books around this topic specifically. Now, there are two books that I recommend time after time after time that are focused on meetings, and I think everything that – or most everything that they talk about can apply to an online meeting as well. So my two favorites are “Death by Meeting” by Patrick Lencioni. I’ve recommended Patrick Lencioni books for a long time on this podcast. By the way, I’m going to give you the punchline on his, that although he calls it “Death by Meeting,” you might assume that he is going to tell you to have less meetings, but he actually recommends that we have more meetings, just that we have more effective meetings in the process. And then another book I love to recommend is called “The Six Thinking Hats” by Edward de Bono, which is a little bit – although you could use this in a regular meeting, I think about using that in an area of conflict or in a big meeting where you might have a facilitator for the meeting to drive down to some resolution on some topics. And I’ve done that as well. I did find one online with just a quick search that I thought looked good, but I have not read it, and it is called “The Virtual Meetings Book.” So, pretty straightforward.

Susan 19:01
The answer should be in there. Right? Some good ideas.

JoDee 19:03
And we’ll put a link to that in our show notes.

Susan 19:08
That sounds great.

JoDee 19:09
In our in the news today, in a March 2024 hybrid work study by Cisco, they found that while employees are positive about the return to the office, they find that the spaces are too focused on individual work, rather than environments that foster collaboration and creativity. Now, I’m going to pause for a minute in talking about the study, because I did have to laugh when I read this. If you remember in, like, 2019 – maybe even back to 2018, 2019, early 2020 – I know several organizations around the Indianapolis area that moved to these open office spaces, more collaborative, more… not everyone had an office, but you could go in and, you know, reserve one or meet in the group areas. And then of course, we had that little thing called the pandemic, then everybody was like, oh, no, we don’t want people out in open spaces again. So interesting to think now people, you know, are asking, like, hey, if we’re going to come back to the work, we want to be collaborative, so…. So a few stats on this. 72% of employees are positive about returning to the office, but they want better equipped spaces for collaboration and brainstorming.

Susan 20:43
81% of employers have already or are planning to redesign their workspaces within the next 24 months.

JoDee 20:51
And most employers plan to adopt AI into their organization, yet few have strategies, facing challenges with security, integration, and costs.

JoDee 21:05
So thanks for listening today and make it a JoyPowered® day.

Susan 21:11
Thank you.

JoDee 21:12
If you liked the show, please tell a few friends about us and let us know what you thought by leaving us a rating or review on Apple Podcasts. You can find more information on our podcast, our books, our blogs, and more at getjoypowered.com. We’re @JoyPowered on Instagram, LinkedIn, and Facebook, and you can send us an email at joypowered@gmail.com. Make it a JoyPowered® day.