Compensation is crucial to attract and retain top talent. According to research from LinkedIn, 61 percent of job seekers said salary ranges and benefits are the most helpful pieces of information on the entire job posting. However, most companies do not share salary information in job communications, and most also do a poor job of communicating about compensation even after employees have accepted a job, with the result being that the majority of employees don’t know if they are fairly paid and many assume that, if they don’t know, they must not be.
However, many organizations don’t have a strategic approach to compensation, and many are reactive when it comes to communicating with employees about what they are paid and why. A common scenario for the traditional HR manager is to wait to have conversations about pay after an employee has asked for a raise or threatened to leave the organization for a better offer. Often, this also involves anxious managers who haven’t been trained in how to talk about pay. Many don’t know if what the employee is asking for is reasonable and sometimes don’t know what the organization’s approach to compensation is any better than the employee.
Employers often fear talking too openly to employees about pay or revealing too much of their compensation strategy or the market salary data and policies that inform pay ranges and grades. Often, the assumption is that sharing where employees are in a pay range will result in disgruntlement as top performers might feel undervalued if they are not at the top of the pay scale.
However, previous research from PayScale’s data and research team revealed that it’s beneficial to talk more about pay. 82 percent of employees are satisfied with their compensation when it is explained to them, even when they are making less than the market average. Naturally, this requires a mature compensation strategy and the use of reliable market survey data to justify compensation decisions, but when these factors in place, pay communications build trust in HR and improve employee engagement, productivity, and job satisfaction.
To help HR leaders understand the importance of pay communications and possibly kick off an HR project to review compensation strategy or create formal processes to talk more about pay, we have created the following infographic:
Join Us for A Webinar
If this resonates with you as an HR leader and you want to know more about how to talk more about pay, please join us on March 4, 2020, when we will be conducting a webinar on How to Create an Effective Pay Communications Plan that will dig into the best practices revealed in our recent whitepaper “The Ultimate Guide to Effective Pay Communications” in addition to a recent two-part series from our blog intended to help HR teams in traditional organizations ramp up on pay communications:
In the webinar, we will discuss pay transparency and communication – how they are related and how they are different – as well as what is essential to communicate about compensation in order to keep employee engaged and satisfied with their jobs. Join us to learn from our compensation experts about:
- What pay communication entails
- The different pay communication approaches
- How to create your best, most effective pay communication plan
Note: After March 4, 2020, a recorded version of the webinar will be available.