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What is pay transparency?
Pay transparency is the degree to which an employer is open about sharing pay-related information.6 There are three types of pay transparency: outcome transparency (pay in actual numbers, like levels or ranges), process transparency (such as criteria for determining pay), and communication transparency (freely sharing pay-related information with employees and job candidates).7
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Pay transparency is a competitive differentiator.
Pay transparency and pay equity are powerful tools for closing gender wage gaps and reap numerous benefits to employees and workplaces. Research from across the world has linked pay transparency with reducing, or in some cases eliminating entirely, pay inequities across gender, ethnicity, sexual orientation, and other dimensions of diversity.11 As pay transparency laws spread across the United States, HR leaders interested in attracting and retaining women should note that pay transparency is top of mind particularly for women, and especially women of marginalized racial and ethnic groups, who have long felt the economic impacts of unequal pay.12 Pay transparency builds trust, boosts employee engagement, and cultivates a positive work environment.13 Adopting pay transparency practices can also offer companies a competitive edge and save on recruitment costs.14