There's a growing push for pay transparency in both the for-profit and nonprofit sectors. For those unfamiliar with the concept, pay transparency includes both radical openness about compensation ranges within a company as well as publicly posting compensation ranges in your job descriptions.

Many see pay transparency as a way to close persistent salary gaps that exist between genders and races. The gap affects women of color the most. A recent report from the National Partnership for Women & Families shows that Latinas are paid 54 cents on every dollar paid to white, non-Hispanic men. And across all racial and ethnic groups, women in the United States are paid 82 cents for every dollar paid to men.

Many employers have concerns, however, that a shift to pay transparency would generate internal dissatisfaction and render salary negotiations pointless. A recent LinkedIn Global Talent Survey captures the mixed reception the idea has received. According to LinkedIn's Global Talent Trends 2019 report, 27 percent of HR and hiring professionals say their company currently shares salary ranges with employees or candidates, with a further 22 percent saying they're likely to start doing so within the next five years. But more than half (51 percent) do not disclose salaries or salary ranges.

So why haven't more organizations adopted transparent pay practices? Compensation can be a charged, highly emotional issue that raises fundamental questions of equity and merit that are not always easy to manage. But in this new era in which we find ourselves, corporate and nonprofit leaders are waking up to the realization that they can and must play a role in creating a more just and equitable society. Creating transparency around pay is one way to do that.

Here are three suggestions for getting started:

  1. Conduct an annual compensation audit.
  2. Leverage the hiring process as a way to begin building transparency.
  3. Make sure that anyone in the organization in a position to negotiate salaries understands the importance of pay equity.

Read the full article about pay transparency by Molly Brennan at Philanthropy News Digest.