Episode 310: Pay Transparency… How It Can Help You

Voice Over: You’re about to listen to another episode of What The Hell Just Happened?! Join Paul Edwards and his guests as they discuss and sometimes even solve some interesting HR problems.

Paul: And… I’m gonna go off the rails sometimes and talk about whatever I want.

Paul: Hi, everybody. Welcome to today’s podcast of What the hell just happened in HR?! I’m joined by Michelle today. Michelle is one of our…Are you a senior? Do we call you a senior advisor now?

Michelle: Yeah, I go by that title.

Paul: Yeah. You’ve been here that long.

Michelle: Once in a while –

Paul: While. I mean, you’re like 74 years old so–

Michelle: [laughing] in CEDR years I am.

Paul: [laughing] in CEDR years? Ouch! So we’ve aged you since you’ve been here.

Michelle: [laughing] In a good way.

Paul: In a good way.

Michelle: It’s like fine wine.

Paul: Okay, so I already know what Michelle’s going to talk about today. It’s a very interesting subject. And go.

Michelle: All right. So salary transparency.

Paul: Okay.

Michelle: That’s what I want to talk about.

Paul: Why?

Michelle: Because I was scrolling through social media, as I tend to do.

Paul: Uh huh.

Michelle: And I came across two, when I was looking at my Instagram reels –

Paul: Uh huh.

Michelle: I came across two salary transparency accounts, and their whole premise is walking on the street asking and asking people, what do you do?

Paul: What do you do and how much do you make?

Michelle: And how much are you paid? And, you know, they say, they kind of give a little insight, like not everybody wants to answer and we’ll talk a little bit about that.

Paul: Uh huh.

Michelle: But they are, they’re getting a lot of traction and they have a lot of followers.

Paul: Right.

Michelle: And it even interested me. So I now follow them.

Paul: Uh huh.

Michelle: So I just figured if I’m seeing this… I’m sure the algorithm is also showing this to many other working individuals.

Paul: Absolutely.

Michelle: So I thought we could just talk about what is salary transparency to begin with. Right?

Paul: Uh huh.

Michelle: Because it can mean a lot of different things to different people. And I thought we could just talk about the basics of it and I would love later on, Paul, to know your perspective as a business owner.

Paul: Oh, I got perspective on this one.

Michelle: You’ve been a business owner for quite some time.

Paul: Right.

Michelle: And you have just, I’m sure, a lot of knowledge that you can share with us about how trends have changed and what you’re seeing now and how you’ve responded to it. So let’s talk about what it is.

Paul: Yep.

Michelle: So from an employee perspective, you know, it’s when an employee feels like they have access to see how much another, maybe employee, makes, maybe it’s at their place of work?

Paul: Uh huh.

Michelle: Or maybe it’s somewhere else in other business. But in a position that’s similar to them.

Paul: Right.

Michelle: So how easy is it to find that information?

Paul: Right.

Michelle: And from an employer’s perspective, it’s how open, how transparent, you know, it’s in the name, salary transparency. How transparent is it? How open are they being as far as displaying–

Paul: Right.

Michelle: Salary ranges.

Paul: Right.

Michelle: And just starting wages.

Paul: And so the other thing to factor in here is that we’re seeing not really transparency laws, but we’re seeing laws which have transparency language in them being passed, which I think starts in California and, Michelle, you could probably name a couple of other places.

Michelle: Washington, Colorado.

Paul: There you go. Where you’re supposed to publish some kind of a range that people make.

Michelle: Uh huh. Exactly.

Paul: So that’s a form of this transparency thing. And I, by the way, I’m for that. And I’ll explain, you know, when you get back to me and I get to give some insight, I’ll explain why I like that. And I’ve actually been trying to get our members to do this big business thing –

Michelle: Uh huh.

Paul: For quite some time.

Michelle: Yeah. And, you know, I think I can first speak to it as an employee myself.

Paul: Uh huh.

Michelle: Right? I’m comfortable enough talking about it with you, my CEO –

Paul: Uh huh.

Michelle: How, you know, this is something that I support as well, not only as a professional in HR, but also as an employee myself. You know, I get that it feels taboo. Like it still feels a bit taboo to me –

Paul: Uh huh.

Michelle: To discuss pay?

Paul: Uh huh.

Michelle: To ask, you know, how much do you think I can get paid next year if I work towards this? I mean –

Paul: Right.

Michelle: These are things you still get nervous about as an employee and reasonably so. I mean, it’s just the way that things have been, but I’m excited for where this can go for just a couple of reasons. Number one, because it’s empowering and it builds trust between me and my employer. You know and it clearly defines goals. It attracts top talent. I mean, I don’t know if I’m top talent, but, you know, I think I’m pretty good at my job.

Paul: You are!

Michelle: And I…I want to be able to discuss that.

Paul: Uh huh.

Michelle: You know, I want to be able to discuss what is that worth and what are my goals and how can I get there.

Paul: Right.

Michelle: So I’d love to hear your perspective, Paul, as a business owner.

Paul: Well, first I want to talk about the owner of CEDR who gets the phone calls from the members about things related to employees discussing wages and upsets and stuff that happen inside of the businesses that we work with. So, you know, you’ve done a good job of making a case for why it can be a good thing. And I can make an even better case for it, for transparency. Do I believe that everybody’s pay, in the company, should be posted somewhere for everybody in the company to be able to see it? I do not believe that, that there’s anything constructive in that. I –

Michelle: I agree.

Paul: I just. Did you say you agree?

Michelle: I agree. Yes, I do.

Paul: Awesome! Okay. By the way, anybody who’s listening, I had no idea what Michelle would say. And Michelle knows, especially in the podcast, she could be like, “let me tell you why you’re wrong, Paul.”

Michelle: [laughing]

Paul: And then she’d have like seven things and I’d get ambushed.

Michelle: [laughing]

Paul: But I’m glad you agree. I don’t know that there’s a lot to be gained from that, and it brings me to this kind of term of the constructive use of the knowledge and the destructive use of the knowledge, or a less than constructive use of the knowledge.

Michelle: Uh huh.

Paul: So the upset that we get for the phone call is that, and this is the way it almost always is, ‘I have an employee who’s really not a great employee, and she just figured out what other people are making and she is in my office complaining because she’s not getting paid the same as someone else who just got hired. And now she’s mad and she’s gotten everybody upset and what I want to tell her is, is that it takes every fiber of my being, not fire you at least once a day.’

Michelle: [laughing]

Paul: ‘And you’re in here complaining and asking me why you’re not making more money when you were absent 16 times in the above and beyond the 14 days I give you –

Michelle: [laughing]

Paul: And I get patient complaints about you all the time and you’re never and you’re never, you don’t ever seem to be happy here.’

Michelle: Uh huh.

Paul: Well, that’s a subjective conversation, right?

Michelle: Yup.

Paul: It’s you’re a, you’re bad and they’re good, and therefore they make more money and there is nothing to be gained from that conversation. Not as a manager, not as that employee who maybe could be making more money if you could manage better and, and show them how they could make more money?

Michelle: Uh huh. And what this comes down to Paul –

Paul: Uh huh.

Michelle: And especially what we see at the Solution Center, because I agree, I’ve been on the manager side of it –

Paul: Right.

Michelle: Not loving having to explain why someone’s getting paid a certain rate.

Paul: Yeah.

Michelle: But it all comes down to asking yourself, how is this going to impact me? What answer am I going to give that individual?

Paul: Right.

Michelle: You want to be prepared for that, because this is the reality. You know, this is, it’s not going away. At least I don’t think so. I think more laws are going to pass. That’s the prediction online, right? By professionals.

Paul: Uh huh.

Michelle: It’s already starting. I think I read somewhere it’s about 17 states that have passed some forms of –

Paul: Something.

Michelle: Salary transparency laws.

Paul: Uh huh.

Michelle: So you know, just starting to think about, maybe it’s not in your state yet, but start thinking about if I have an employee that comes to me, just like Paul said, how am I going to focus in on the issues –

Paul: Uh huh.

Michelle: That they’re having –

Paul: Yeah.

Michelle: And just having that conversation be prepared for it. And if you’re thinking, well, I don’t know how I defend that, then just start looking at, you know, salary ranges, making sure that it’s as equitable as it can possibly be and that’s when you can work with the professional. You know, give us a call if you’re a CEDR member or work with somebody that is in the business and can give you some solid third party, more neutral based guidance.

Paul: So if you go into any well-run, universities are famous for doing this, larger organizations are famous for doing this, if you’re going to any of them, you look at how they handle compensation. This is the conversation I’m about to have is, Michelle, the one that I want the people who are listening to think about, adopt, start thinking about this if you’re not already using it. There’s something known as pay bands…

Michelle: Hmm.

Paul: So they’re constantly adjusting the pay band up, up and down a few dollars. And on the other side of that, they’re checking to make sure that they’re not overpaying –

Michelle: [laughing] Yeah.

Paul: For entry level people because the market has changed. So, you know, that’s great for them because, you know, they have all the tax money in the world.

Michelle: [laughing]

Paul: They don’t have a profit loss…

Michelle: Right.

Paul: But you can create pay bands. And we have a great, we have a great article on this.

Michelle: Yup.

Paul: And the other thing that I like about pay bands…

Michelle: Uh huh.

Paul: If you’re capable of writing, if you’re, if you can do these things, you can make more money…

Michelle: Uh huh.

Paul: I mean, I think it’s okay –

Michelle: Some kind of range.

Paul: You know–

Michelle: Keep it even.

Paul: You know that somebody is in the range…

Michelle: Exactly…

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