Why Pay Transparency is Essential for Your Organization's DE&I Initiatives

Chelsea Finn
Why Pay Transparency is Essential for Your Organization's DE&I Initiatives

The topic of pay transparency is being covered more than ever before. As many states and cities make the switch the stricter laws surrounding transparent pay rates and salaries, it's essential to consider why pay transparency isn't only beneficial to workers but to organizations as well. This applies especially to your organization's Diversity, Equity and Inclusion (DE&I) Initiatives 

First, what is pay transparency? 
Pay transparency is the practice of making employee compensation figures visible to others; this could mean internally, externally, or both. 

It's important to note that the majority of employees (79 percent) say they want  pay transparency in some form, and salary information has never been more available. You can find it on websites that review and rate companies, such as Glassdoor, posted on organizations' websites, and it's even more openly discussed among co-workers, especially in younger demographics. Nearly 90 percent of Generation Z workers say they are comfortable discussing their salaries with peers. A significant jump compared to 53 percent of Baby Boomers, according to a study by Visier in 2022. Additionally, one-third of Gen Z respondents admit that they discuss pay with co-workers in the same role.


Read the DZConneX featured article, Leveraging Pay Transparency to Create Competitive Advantage in Talent Sourcing on SIA's, The Staffing Stream. 


DE&I and Pay Transparency 

With salaries and pay rates being more openly discussed than in the past, it's easier for workers to find out if they are making more or less than their peers.

So, what's the correlation between your organization's DE&I Strategy and pay transparency? 

The want and need for pay transparency comes from an overall desire for an equal society in the wake of #MeToo, Black Lives Matter and the COVID-19 pandemic. These have highlighted pay inequities, showing that women and people of color are consistently paid less than white men in the United States.

Payscale released a study in 2022 that showed that women earn 82 cents for every dollar men earn. That gap widens even further when comparing white men to women of color. American Indian and Alaska Native women have the largest disparity, earning 71 cents for every dollar a white man is paid. Hispanic women earn 78 cents, while Black women earn 79 cents.

Additionally, the study found that Black men earn 90 cents for every dollar paid to white men, Hispanic men make 91 cents, and American Indian and Alaska Native men earn 88 cents. These inequities give women and people of color significantly less purchasing power than white men. This is even more glaringly obvious during times of high inflation.

The power of pay transparency is that by disclosing more salary information, more workers will be able to negotiate fair pay rates and salaries. 

According to the Society for Human Resource Management (SHRM), 91% of employees who believe their organization is transparent about how pay decisions are made also said they trust that their employers pay people equitably and competitively across the board, regardless of gender, race, or any other biases.

The reality is that structural pay inequalities can no longer be hidden in plain sight if pay transparency is required.

To learn more about the benefits of pay transparency, check out DZConneX's featured article, Leveraging Pay Transparency to Create Competitive Advantage in Talent Sourcing written by Global VP of DZConneX Sales, Mara Klug, on SIA's, The Staffing Stream, here


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