More Pay Answers. More Pay Questions.
The manager didn’t think his email about salary ranges would cause a stir. As directed by his boss, he grouped the salaries of his direct reports by role, and sent an email around listing the relatively narrow range—$80,000 to $95,000.
The questions began almost instantly, and the manager had few answers: Why am I on the low (or high) end of the range?... Does that mean I can’t get another raise?… How was this range calculated?
Whether due to government regulations or other factors, companies are disclosing more information about employee salaries. According to a new survey of more than 1,300 organizations worldwide, 58% are already sharing with individual employees the firm’s pay ranges for their job level. Another 28% say they’re planning or considering doing so. Other companies are going even deeper, with more than a third saying they disclose how pay ranges are designed.
Not surprisingly, experts say, this process can fluster both managers and individual employees. Managers may not be prepared for their direct reports’ questions. Indeed, few firms have added any special training. “It’s kind of a mess right now,” says Juan Pablo González, a Korn Ferry senior client partner and sector leader for the firm’s Professional Services practice.
Talking about pay with employees in a systematic way isn’t something many company managers have done in the past. Although millennials are generally open about pay with each other, their older coworkers have long kept salaries private. “A lot of organizations are out of their comfort zones on this,” says Tom McMullen, the leader of Korn Ferry’s North America Total Rewards expertise group.
But much of the new eagerness for these discussions is being driven by government requirements. Multiple states have laws in place making it mandatory to disclose salary ranges in job postings, with several more states putting similar laws into effect in 2024 and 2025. The European Union doesn’t have mandates yet, but experts say it’s only a matter of time.
Apart from complying with regulations, a growing number of leaders feel that being more open about pay can help them attract and retain talent. Indeed, highlighting pay ranges, potential benefits, and bonus opportunities—even when not required to do so—can be a differentiator, McMullen says. “If you’ve got good things to talk about, you should talk about them,” he says.
Experts say organizations first must ensure that they have a good story to tell, which means that their pay programs must be fair and consistent. That may require an overhaul in pay structures that could take months or longer. After that, firms must anticipate the questions employees are mostly likely to ask, then give line managers the information—and confidence—to supply answers.
Companies should always provide context for salary ranges; giving out only numbers can make employees anxious. “You might be comfortable from a compensation perspective until you see what someone else is making,” says Tamara Rodman, a Korn Ferry senior client partner in the firm’s Culture, Change and Communications practice. For instance, that context could include telling employees that new hires will be paid closer to the lower end of the range.
Companies also should not rely on management to be the sole conduit for pay information. "Empower managers to have that initial conversation, and then if employees want more they can ask HR," says Brian Bloom, Korn Ferry's vice president of global benefits and mobility operations. Sending notes about pay directly to employees also can help alleviate the problem of some managers not being as willing as others to talk about pay.
Having pay discussions is something that employees are increasingly expecting. Yes, there may be some tough questions, Rodman says. “But the bigger risk is not talking about it at all.”
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