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Post by Rich Moy on Oct 24, 2018 12:00:00 PM

Last June, Fog Creek Software (now Glitch) generated a lot of attention by revealing company-wide salary information to all of its employees. Anil Dash, the company’s CEO, told Bloomberg that this level of transparency would draw much-needed attention to pay gaps across the country. “Transparency is not a cure-all and it's not the end goal,” he added. “It's a step on the way to the goal, which is to be fair in how we compensate everyone.”

Salary transparency, especially in the tech industry, is one of the year’s most talked about talent-acquisition trends. But how much has changed since Dash first spoke to Bloomberg? And will companies continue to make their employees’ salaries public over the next three to five years?

We reached out to HR executives, and continued the conversation with Dash, to get their take.

Salary Transparency is Gaining Traction

In a recent conversation with Dash, he told us that he receives a lot of positive feedback from other businesses about the Bloomberg piece. In many cases, Glitch’s stance on transparency has led other leaders in his network to take another look at their compensation strategies.

“As an established company that’s embraced transparency after almost two decades of being in business, we heard from a lot of other companies that said, ‘We thought you could only do this when you’re first starting out,’” Dash continued. “It’s exciting to see them rethinking that.”

With executives across the industry thinking about fair pay in a new light, will more companies take the leap and be more open about employee salaries? Based on Glitch’s ability to attract tech talent, the answer for Dash is a resounding yes. “We find that, as a small company, we’re able to go head-to-head with the biggest companies in the world for talented people because transparency helps us build trust before they’ve even started working here,” he added. “In a few years, this will be the norm for a lot of competitive companies.”

Policy Will Nudge Companies to Be More Transparent

While salary transparency isn’t yet the norm, Amy Spurling, Co-Founder and CEO of Compt, says that most businesses have already started paying market rates for top talent. This shift, in large part, is due to policy changes on both a local and national level. 

Time Magazine reports that states such as California, Delaware, Massachusetts, and Colorado have passed laws that prohibit employers from terminating workers who disclose salary information. On a national level, regulation was introduced in 2016 that required large companies to include salary information in their annual information filings. Spurling says the United States is heading towards even more of this type of legislation. “In today’s landscape, workers expect clarity around salaries,” Spurling added. “If you want to hire top talent, you need to be clear about where they fall in the stack, and more importantly, the reasons why.”

This is not exclusive to companies based in the United States. Other countries have taken an even firmer stance against salary discrepancies. Earlier this year, The New York Times reported that Britain is combatting pay gaps by forcing companies to publish salary information. Additionally, companies in Australia, Germany, and Iceland are required to report on their pay gaps.

With the sentiment around salary transparency evolving at such a rapid pace, Spurling said it’s up to employers to ensure that they have reliable data on a yearly basis. “Whether you share your employees’ salaries or not, you need to know your data,” she continued. “If you’re committed to transparency, but don’t update your salary ranges on a yearly basis, it could be difficult to attract and retain talent.”

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