Pay transparency is exactly what it sounds like: it’s all about people being open about how much money they make for the work they do. Pay transparency can also include transparency about benefits (i.e. health and dental insurance) and other factors such as parental leave, vacation days, and paid sick days.
Most people don’t like talking about their salaries. It’s a social taboo among some people, while others fear they’ll be judged for making too little or too much. Even colleagues at the same workplace, who expect to be paid within a similar range, won’t talk about it either. The only ones who benefit from all this secrecy are employers. They can continue to pay entry-level employees below industry averages and they can continue to pay men more than women even if they do the same work.
It’s hard to have these conversations. This is why Generation PR created an anonymous survey to collect salary information from professionals across Canada. Take a look at the results of the survey in our pay transparency spreadsheet.
Employees can feel powerless and at the mercy of their employers. They feel powerless when they accept a low salary because they need the job and powerless when they are not offered a raise year after year. And even more powerless when they discover they’re being paid less than someone who does the same work as them.
That is why pay transparency is important. It provides knowledge of what was once unknown. And knowledge is power. If we start talking about our pay more openly amongst ourselves, we can become empowered.
The wage gap hurts some more than others
Your salary can be determined by a multitude of factors such as your skill set and years of professional working experience. But unfortunately, it can also be determined by factors out of your control.
Employers have made a lot of grandiose statements and promises in response to the #BlackLivesMatter movement but I didn’t see many of them mention pay discrepancies. Instead, they focus on diversity in hiring. It’s great that you’ve filled an executive role with a Black person but it would be egregious to pay them less than other executives. Research from 2017 found that visible minorities in Canada earn an average of $47,487 annually, but when you look specifically at the income of Black Canadians, the average dips to $35,310.
Did you know that in Canada pay discrimination on the basis of gender is illegal? And yet StatsCan reported that in 2018, women aged 25 to 54 earned an average of 13.3% less than men. Another report from the University of Ottawa’s Education Policy Research found that among post-secondary graduates, men out-earned women by 12% one year into their new careers. Five years after graduation, that gap widened to 25%.
As you can imagine, when you combine race and gender together, you’ll get even worse numbers. A study from the Canadian Centre for Policy Alternatives found that racialized women earn 59 cents for every dollar earned by white men.
When determining the wage gap for people with disabilities, data shows that the type of disability a person has can determine their job prospects. But there is still a gap for any person who has a disability versus those that do not. According to a 2012 report from the Canadian Human Rights Commission, disabled men aged 15 to 64 earn an average of $9,557 less than men who don’t have disabilities. For women with disabilities aged 15 to 64, they earn an average of $8,853 less than women without disabilities.
People want more pay transparency
No big surprise here, but pay transparency is popular. We want to know what our colleagues are making and we want to know what companies are paying long before we walk into an interview. A 2018 survey from Maclean’s and Insights West found that 73% of Canadians would share their salary publicly in order to reveal discrepancies between men and women.
In 2018, the Ontario Liberal Party passed the aptly named Pay Transparency Act with the express purpose of narrowing the wage gap. Unfortunately, it never came into effect. When the Ontario Conservative Party came to power, they delayed the law’s implementation in order to conduct public consultations. To date, we still do not know when this Act will come into effect and if it ever will.
Still, it’s important to look at this legislation so we can understand what is within the government’s control.
Among other provisions, the following would occur under the Pay Transparency Act:
- All publicly advertised job postings would state salary rates or ranges.
- Potential employers could not ask candidates what they earned at previous jobs.
- Employers could not reprimand employees who discuss or disclose their compensation.
- Employers with 100 or more employees would have to track compensation gaps based on gender and other characteristics and post these reports online or somewhere it can be accessed by their employees.
And let’s not forget about the (in)famous Sunshine List, an annual report that identifies every public sector employee in Ontario who earns over $100,000 or more. It is an example of pay transparency that could easily be mimicked by other industries.
How can we make pay transparency happen?
So, you’ve boarded the pay transparency train. I’ve convinced you or you were here all along! What can you do next? You can start with private conversations with friends, relatives and co-workers that are in your field. I recommend sharing your salary first as that will make them more comfortable sharing theirs. That one conversation can be extremely illuminating and it’s one small and important step forward for you both.
There are also websites such as Glassdoor that allow employees from particular organizations to anonymously share their salaries. Along with Glassdoor, LinkedIn also has a salary tool that allows you to see the industry average for jobs in your field and location. Unfortunately, at the moment, these sites don’t have a lot of data. Also, other important information, such as an individual’s gender and race, is missing from their data collection efforts.
Anonymous pay transparency documents are rising in popularity. People in a given field or company are disclosing their salaries to benefit and empower their peers. From graphic designers to museum employees, these eye-opening docs are facilitating a conversation that is really hard for people to have face-to-face. Contributing to these documents is a vital way to advocate for pay transparency.
What else? Well, you can reach out to your local representative and express your support for pay transparency legislation. And if you have great courage, you can raise the issue with your employer.
What can employers do?
It seems so obvious, but yet it doesn’t happen. All employers should regularly review compensation at their organizations across the board and determine if there are any unforgivable wage gaps. That means looking at how much two people with the same title earn, whether Black people are paid less than their non-Black counterparts, and if someone hasn’t received a raise in a very long time.
Fair pay, annual raises and bonuses, and great benefits are a vital aspect of employee retention. Employees may not feel comfortable approaching their managers for a raise, but they are perfectly comfortable walking out the door to join another organization that will pay them more. Why let an employee go just because you made the error of never reviewing their pay since the day they started?
Employers can also make everybody’s salary information public to employees or just… public to everyone. That’s what Buffer did, allowing even you and me to see how much “Alfred the Content Marketer” earns. (Hi Alfred, if you see this). Buffer’s public relations manager shared that the company saw a significant increase in job applications after the company this data public. That’s not necessarily because they pay the best salaries, but because job-seekers admire organizations that make openness a core value of their culture.
Companies would benefit from publishing their own compensation data, rather than waiting for somebody to do it for them. Stephanie Penner is a senior partner at the consulting firm Mercer and works with companies on these issues. Here is her take: “If an organization doesn’t form its own pay method on transparency, someone else will — and it probably won’t be a complete message.”
Mercer created a pay transparency journey to show the steps employers can take to become more transparent about pay:
- Prepare for the journey: “We don’t have pay ranges for all of our jobs but are working on it.”
- Meet legal requirements: “We share information about pay ranges only when and where legally required.”
- Share all jobs pay range: “Employees are told the pay range for their job.”
- Share all jobs’ pay range: “Employees are told about the pay ranges for all jobs.”
- Share pay positioning: “Employees are told about the distribution of employee pay across pay ranges, but not the actual salaries themselves.”
- Achieve full pay transparency: “We openly who gets paid what salary, across the organization.”
And before employers do anything, they need to develop a compensation formula or pay scale that actually makes sense. It gives employees peace of mind that their salary isn’t determined by how much management likes them or how well they negotiate. This formula can account for many things such as years of experience, responsibilities, and location. Meanwhile, pay scales can set up base rates of pay for certain positions and/or years of work experience.
Employers can deter wage gaps from happening if they adhere to a formula or a formalized pay scale, as well as becoming transparent with their employees at the very least. And governments can also pass legislation to force employers to open up their books and let us all have a look. In the meantime, we need to continue having this conversation and advocate for equitable and fair pay for everyone.
