Pay transparency legislation is coming (or is already here) — get ready with this step-by-step guide

With many US States already having pay transparency legislation, the European Union having just announced their plans, and some provinces in Canada, like British Columbia, moving forward with more rights for candidates and employees around transparent salary ranges, companies need to get clear on their pay processes quickly to keep employees informed and engaged.

These are the most important steps to get ready for more pay transparency in your organization.

Step 1️⃣ : Resource Planning & Documentation Review

Think seriously about  how you will resource your pay transparency readiness project. Lay out a plan, share it with your leadership team and ensure your people operations/HR team has adequate time and resources to do the work. Review and gather the documents needed for the project: your compensation philosophy, job descriptions and market data sources. Ensure you have everything in one place, ready to access when needed.

Step 2️⃣: Job Architecture Design/Review

It’ll be tough to justify a salary range for a job if you can’t link it to a specific job level with a proper job description. And before assuming this step is complete because you have job ads, think again.This is about producing detailed job profiles that outline specific and clear expectations of what full proficiency at each job level of a role means.

👉🏻 Tip: Use available job level information 

Depending on which data sources you use for determining salaries, you may find the provider will also have a job level guide to help you differentiate between the various individual contributor and management levels. Use it as a starting point to create your own.

Step 3️⃣: Compensation Philosophy Design/Review

Whether you have established a compensation philosophy or not, know that it will be an important communications tool on your pay transparency journey. Use this time to develop and/or review it. Your compensation philosophy should reflect how you reward and value your employees. One important element is the outline of how you position the company in the market regarding your base salaries.This is generally expressed in your pay policy. Be clear on what that policy is (e.g. are you paying fair market value or competitively) and how you define the market you are operating in (e.g. which industries, size, revenue etc. are used for comparison). 

👉🏻 Tip: Don’t limit yourself

Although most pay transparency laws only focuses on base salaries, your compensation philosophy should tackle much more than that. It’s a great place to communicate about all your rewards from short- and long-term incentives, to career development, wellbeing and more.

Step 4️⃣: Salary Range (Re)Design & Communications Planning

Many pay transparency legislations, including the new one for British Columbia, focus on publishing salary information on public job postings. However, you will likely want to share salary ranges internally with employees to avoid questions and speculations. Your salary ranges need to be up-to-date, well designed and defendable in order to be shared. That’s why a market review is recommended before your rollout. Although many reputable data sources are now available in real-time or at least monthly, some salary surveys will release data in early fall, so this is a good time to design or redesign your salary ranges. 

Now is also the time to plan and roll out your pay transparency communication, especially to managers. Conduct  manager training to share your approach, compensation philosophy and how to explain employees’ placement within the salary ranges. 

👉🏻 Tip: Get managers involved early 

Your managers are key to a successful rollout as employees will contact them first. Ensure you involve them in the process early by giving project updates and ensuring they are involved in various parts of the process (e.g. job architecture design).

Step 5️⃣: Launch

Congratulations, you should be ready for your pay transparency launch and feel confident sharing salary ranges on job postings and internally. 

👉🏻Tip: Set your schedule 

Creating job profiles, reviewing the compensation philosophy, collecting market data, updating salary ranges and communicating with employees about changes, is not a one-and-done exercise. Build out a schedule of when you want to review these elements to keep them current.

Need more help? Get in touch to learn more about our Compensation Health Checks and how Talent Collective can help to get you Pay Transparency Ready.