From start-up to grown-up, your business plan should include pay transparency

Where are the employee-centered companies?

Forty-seven million Americans resigned from their jobs last year. Many responded to a National Chamber of Commerce survey that "they set out in search of a workplace with stronger company culture." 

In What The Job Seekers Market Shift Means For Your Career, experts say those scouting for more affirming environments can afford to be intentional and selective before committing. 

"You won't just find it easier to secure a job thanks to current labor market conditions — you can also expect firms to approach the venture differently. Companies are now fighting over applicants and going all-out to offer the most attractive packages possible."

Start with compensation integrity 

What makes a package attractive? What's at the heart of the "stronger culture?" Integrity - leadership respecting employees as the company's most valuable asset.

Central to this ethic is compensation integrity, including pay transparency - a set of best practices related to salaries and professional development pathways.

In Pay Transparency Pulse Report, 79% of surveyed employees want greater clarity and openness about their remuneration. For Gen Z workers, this number increases to 89%.

Public and private sector companies and organizations implementing pay transparency may:

• Publish detailed pay bands - the salary range that corresponds to each position level
• Discuss details with potential employees early in the hiring process
• Encourage frank discussions about compensation among employees
• Eliminate employee geographic location as a compensation factor
• Review salaries regularly for current market value alignment
• Communicate detailed position descriptions and specific creative contributions expectations

"Because it is the right thing to do. Period."

Jacob Orrin

Fair and transparent compensation has been part of Merit's company philosophy and practices from day one. Jacob Orrin, co-founder and COO, shared that, as soon as the company emerged from its earliest "start-up" days, "as soon as we could afford to pay salaries," the leadership team incorporated this value into its people ops policies.

Employees at the same position level were paid equally, the benefits offered were identical throughout the company regardless of seniority. 

Potential hires also experienced this commitment to fair and open pay.

"It's common for candidates only to be engaged in conversations around salary at the tail end of an interview process. At Merit, we are proud to engage in salary conversations during our initial phone screens with candidates," said Merit VP of Talent Acquisition Tim Oliver, whose team helped drive the Pay Transparency campaign. "We want candidates to have an understanding up front, before an often time-intensive interview process, what salary range we are working within."

Merit launches public “pay band” website

As the next step in Merit's ongoing commitment to transparency, in September 2022, the company published its detailed "pay bands," the salary ranges that correspond to each position within the company. This webpage is complete and fully available for public review.

For the Merit leadership team, being forthright about how the company values specific work contributions is essential to building successful professional relationships with its employees.

The many benefits of total pay transparency

Employers and human resource specialists are hearing that implementing fair pay practices lead to a more positive work environment, including: 

• Higher employee satisfaction
• Increased trust in employers
• Increased dedication to work
• Perception of being respected by leadership
• Increased diversity and inclusion, the cornerstone of a successful company
• Reduced gender and racial wage gaps in the workplace
• Less peer-to-peer tensions - than in companies offering unequal pay for the same work 
• Reduced turnover, both voluntary and involuntary
• Heightened interest in hiring campaigns.  

Companies should lead - not wait for laws to catch up!

Merit's history of implementing compensation equity from the start places it at an advantage over others waiting to be "forced" into treating employees properly. Building pay equity into a company's foundation helps avoid uneven compensation and broken trust if employees discover they have been paid unfairly. 

Merit will now focus on enhancing its transparent, professional development. This spring, the company shared career pathways from one position level to the next with corresponding salary increases. This tool, a work in progress, provides a structured framework for collaboration between team members and managers during performance reviews and goal-setting discussions.

Merit's internal mission is to create an environment where employees can thrive and feel a sense of ownership in their growth as they, in turn, work towards the platform’s mission. Transparency and openness are among the most valuable tools for achieving this.