Women in Pennsylvania are paid 79 cents for every dollar men are paid, amount to an annual wage gap of $10,507. The pay gap is worse for women of color, as Asian women are paid 81 cents, black women are paid 68 cents, and Latinas are paid 56 cents for every dollar paid to non-Hispanic white men.
As the conversation around equal pay continues, pay transparency can help close the pay gap, enable women to effectively negotiate for higher pay, create closer employer-employee relationships employee and create a fairer workplace.
When hiring managers are open about employee compensation, it puts all applicants in a more equitable position to make informed decisions about job offers, said Kelly Grace, professor of management.
Transparency among employees could also push people to defend their salaries, as they have context for what other employees are earning, said economics professor Shreyasee Das.
“Maybe you and I are in the same office, and you find out you get paid a little less than me,” Das said. “That might make you go and say to HR, ‘Look, I think I should be paid a little more.'”
Although talking about personal income may seem taboo, it can help women feel more comfortable and normalize discussions about salaries.
With transparency, women could renegotiate a new salary more comparable to that of their colleagues without feeling shy because they would have evidence to support their unfair compensation claims.
Women often feel less comfortable negotiating their salary than men, with 74% of men and 58% of women feeling comfortable doing so, according to at Indeed Hiring Lab.
Women feel uncomfortable negotiating because it goes against society’s values, such as being nice and getting along with others, Grace said.
“All the social things that women traditionally value and are good at seem compromised when you’re in a situation where you’re really asking what you’re worth,” Grace said. “Let’s be clear, we’re not asking to be over-rewarded, we’re just asking that that compensation reflect what we’re worth.”
These negotiations can contribute to the empowerment of women, even if the result is not an increase in wages. This can open the door to other opportunities like a signing bonus.
Pay transparency helps companies attract better employees because the conversation around compensation can help build a stronger relationship between employees and their company, said Laura Craig, associate director of Temple’s Career Center.
“It helps these candidates make more informed decisions, it likely leads to more sustained engagement over a longer period of time between candidates who will soon be future employees and the employer,” Craig said.
By being transparent about wages, companies can also improve unity among workers, promote diversity and increase productivity, as this prevents companies from hiding structural inequalities such as wage discrimination, according to to World at Work, a non-profit organization.
Because transparency creates fairer and more equitable workplaces, employers and hiring managers need to make pay scales visible to both current and potential employees.
While pay transparency benefits both employer and employees, only a quarter of employees say their employers are transparent about pay, CNBC reported.
The gender pay gap did not improve over the past 15 years and it’s time for employers to do their part and use pay transparency to help close the gap.
“It encourages female workers to apply to places where salaries are transparent, because they are more sure of knowing all the information,” Das said. “They also know this place cares about pay transparency, they care about the gender pay gap.”