The topic of pay transparency is a hot button right now in both recruiting and DEI circles. So, it is unsurprising that our panel discussion on Pay Transparency in Startups during Hire Women Week was especially spirited. Here is a brief rundown of the discussion. If you’d like to view the entire panel, check out the video on our YouTube page.
Our moderator was Shannel L. Tuitele. She founded Laeona Fair Pay, a startup that offers resources to identify, address, and monitor compensation trends related to gender, race, and age.
The panel included three tech-related HR professionals. They were:
- Kelli Presto, a tech recruiter, and startup talent acquisition consultant. She is working on launching Backdrop, a platform that will work towards establishing pay transparency in non-coding job roles.
- Caitlyn Conner, SHRM-CP, is the Head of People at Clerk. In her career, she has helped startups and tech companies develop employee engagement, philanthropy, and corporate culture programs. She is committed to bringing transparency to every part of her company.
- Dave Fano is the founder and CEO of Teal, a digital platform dedicated to empowering people to build their careers.
WHY IS TRANSPARENCY IMPORTANT?
The first question Shannel posed to the panel was why pay transparency is essential.
The gender wage gap can only be closed through salary transparency.
Kelli believes this to be especially true for women who work in non-coding tech jobs. She has witnessed women successfully advocate for themselves when they had the resources to do so, but those resources are few and far between. She wants to ensure more pay transparency resources are available to women in those roles.
ACTIONABLE STEPS TO PAY TRANSPARENCY
Shannel asked Caitlyn and Dave about concrete steps companies can take to address pay transparency that actually affect change and are not just window-dressing. Caitlyn suggested these things:
- Be prepared to answer questions about salaries from candidates
- Own the existing pay gaps in the organization and show candidates a plan to address them
- Be transparent about all finances and operations in the organization
Candidates know that no company is perfect, and pay transparency is an ever-changing situation. The best thing a company can do is have an action plan to improve its metrics and be able to talk about it.
CLERK: A Real Life Example
Caitlyn’s company makes its entire system of compensation available to anyone who wants to see it. All candidates know what pay level they will be hired at and why. They can see the documentation on how to move forward in their position once hired. Even the raw data is available. Caitlyn wants candidates to understand why and how salaries are set. The company also commits to overall financial transparency. Candidates can meet with the CFO to discuss financial questions, and recruiters are always honest in answering operational questions.
THE CANDIDATE'S PERSPECTIVE
Dave offered that the most talented people often don’t know how to advocate for themselves. He thinks there are times when modesty doesn’t serve you well, and this is very true when you are building your career. These days, just showing up for work does not guarantee a reward.
Those who advocate for themselves are usually more successful than those who don’t.
Unfortunately, Dave has seen that many candidates learn this the hard way by not using or going after critical information (like relevant pay ranges) that would help them advance their careers. But career coaching or other resources are not accessible to those who would benefit from them.
When the lack of resources and awareness is not an issue, the reasons why people don’t get ahead become more about performance and skill. It levels the playing field. This is especially critical for certain workers.
The cultural aspects of being humble and referential in the workplace hold back many women of color.
They need to unlearn what they’ve learned at home to advocate for themselves and successfully build their career.
PAY TRANSPARENCY RESOURCES
Kelli says that people are responding to the lack of transparency by many employers by sharing their salaries on social media. But they are doing so without providing context. As a result, viewers don’t understand the poster’s background or experience or see salaries without knowing the business strategy behind them, which causes unnecessary confusion.
There is always a meaning as to how a salary is decided. It is never assigned to a candidate in a vacuum.
There is a movement for more companies to share salary ranges. Kelli is building a recruiter-informed way to share non-coding tech salaries and educate candidates on what a salary range means. She is building a transparent database, so candidates know where they fall in a salary range based on skill sets and experience. 2022 is the year of salary transparency, and Kelli thinks there should be a resource that helps both the recruiter and the candidate.
COMMON LEADERSHIP OBJECTIONS TO TRANSPARENCY
Shannel asked the panel how they would respond to these common push-backs for salary transparency.
How do you get leaders to see the importance of transparency?
Show your leaders proof that transparent companies are more successful and drive growth.
Caitlyn says that data indicates that transparent companies have more loyal and engaged employees, better retention rates, better recruiting outcomes, and better external and internal brand perception.
How do you address the objection that transparency is too expensive?
Dave says that cheap is expensive and shortsighted. The adage “penny smart and dollar dumb” accurately reflects pay transparency. Ultimately a company will lose when not being transparent.
The fear of the unknown is not a good reason to do nothing.
He admits that transparency may be a difficult transition for many companies, but it is necessary. It increases trust, and the company will save money in the long term with less recruiting and re-hiring.
How do you address the objection that leaders want to stay with what has always been done?
Kelli stresses that the transparency movement is happening. Companies will be impacted either way. She says that opt-in is essential. Candidates want to know they will be paid fairly, but they are not necessarily interested in learning the salaries of every staff member.
Companies do not have to go to complete transparency immediately.
The process could be done in small steps, possibly just job descriptions to start. But Kelli maintains that companies need to address the issue, or they will lose trust when recruiting.
QUESTIONS FROM THE AUDIENCE
Are the salary bands used by the panelists created by their company, or do they use external research?
Caitlyn says that Clerk did a lot of research into companies that have become transparent already.
Buffer and GitLab offer transparent pay-level information.
If there was limited information, they had to adapt or guess what was best for the company and learn as they recruited. Sometimes their decisions did not scale or work for them as the company grew. They’ve adapted their salary levels to be unique to the company’s values, but they are consistent across all teams.
Candidates can refer to LinkedIn, TikTok, and meetup groups to check the market for quick salary information.
Should salary be listed in the job description?
Dave is all for it. Teal lists salary in every job posting. He says that it sets expectations. People forget that a salary is based on a budget. Sometimes the salary is not just about a candidate’s value.
It signals to the market what a company can afford.
Kelli says that the best resources will depend on where the company falls on the salary percentile. Remember that “market rate” is fairly ambiguous. It’s more important to have a sound business strategy on salary than just setting salaries according to the market value of your industry.
For a candidate, Levels FYI can provide salary information on coding roles.
Kelli warns that candidates should carefully understand the numbers in any salary database. The numbers might not be the total compensation. She suggests gathering as much data as possible and using an average for your range.
What are some tips for addressing a low salary offer?
Find data that shows the offer is not market value.
Caitlyn also suggests asking about other variable pay, including equity. Are these items included in the offer, or are they separate? Make sure you understand where the delta is. Then, offer concrete examples of other companies providing larger salaries and ask why your offer is lower.
What are some tips for addressing a low salary if you are already working at a company?
Caitlyn says that is a difficult problem to address. Understanding pay levels and why you are paid at that rate is important.
Ask the HR expert at your company how compensation levels are structured and how that structure fits your experience and performance.
Then, bring data that shows the gap to your manager, ask for transparency, and try to work together to see if anything can be done.
How can I navigate the assumption that I want to leave or have become a liability when I ask my employer the compensation question?
Kelli says it depends on your relationship with your manager and company.
Not getting a salary increase may not be a reflection of you. It could be a budget issue.
Like Caitlyn, she recommends you research your company’s method of assigning salaries and encourage transparency with your HR department because it’s good to know either way.
Dave stresses that your manager probably doesn’t want to lose you. They may not react negatively to the question.
If you feel like your manager cares about you, deliver the question in a way that asks to understand, not confront or make an ultimatum. Instead, talk about your value and contribution to the company.
If you think your manager will retaliate, start looking for another job so you can have an offer in hand when you have the difficult pay conversation.
WRAPPING IT UP WITH SUPERPOWERS
To wrap up, Shannel asked the panelists what superpowers they might have to help those needing HR or DEI assistance.
Caitlyn’s superpower is data. She has plenty to share. She can also help companies make the transition to transparency.
Kelli loves figuring out how things work and then sharing the information so others don’t have to. On the candidate’s side, she can help find salary resources, and on the recruiting side, she can help teams develop a better hiring process.
Dave has tested and failed a lot. He says that what he’s learned is valuable information for risk-averse people, and he is willing to share it.
The panel ended with an invitation to connect with Shannel and the panelists on LinkedIn and TikTok. We hope you’ve learned a ton and will read more about this important topic and other topics on women in tech on our blog.