Pay Transparency Will Do to Compensation What Zillow Did to Real Estate
The idea for this article was sparked during a conversation with Andrew Noto, author of People Matters.
🔗 Read the full article on People Matters here!
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As a movement, pay transparency has grown from a fringe idea into a standard regimen for compensation teams globally.
If pay transparency were a stock you could have bought 20 years ago, it would look a lot like Apple (up 108,850%) or Nvidia (up 129,131%) today.
Back then, both companies were underrated and seen as niche and maybe even risky. But if you had invested early, you would have seen exponential power-law returns.
Pay transparency is on the same trajectory, both in terms of the amount of data that is being produced and the returns for employers who
proactively define their compensation strategies in the era of pay transparency.
Whether in Zestimates, stock markets, or pay transparency, the market rewards information. Instead of rewarding buyers and sellers of homes or stocks, pay transparency rewards the labor market. Employers compete smarter with access to real-time pay data, workers build trust with their employers and find their rights to information about their own pay protected, and candidates gain confidence in negotiations. It’s a triple win for the entire labor market.
In a lawful context, pay transparency means employers are required to disclose some combination of salary ranges, pay gaps, and related metrics. In most cases, pay transparency measures build on a country’s existing equal pay laws. Nearly 100 countries have enacted formal “equal pay for equal work” laws, with about half of those countries having enacted some form of pay transparency measures.