“Companies are also wary of falling wages and losing their best talent to competitors without transparency,” says Obloj. “But in the data, the opposite happens — no departures of superstars from organizations become transparent, and in the midst of the Great Resignation, we can’t apply the ’70s lens. and 80, when it was enough to give a high-supported incentive. ”
One example of wage transparency on a large scale is taking place in Iceland, where, as of 2018, companies with more than 25 employees must demonstrate that they pay equal pay for equal work and correct any pay disparities. If companies can prove that they pay equally, they will receive the certification, and those that do not will be subject to a daily fine. ONE Similar program for companies with 10 or more employees was implemented in Canada by the end of 2021, aiming to adjust for all payout equity gaps by September 2024.
Bryndis Alexanders, studio director at Reykjavík .-based software development company Aranja, had always questioned her salary before the equal work pay law was introduced. She explains: “I was promoted to middle manager and got a raise, with my salary increasing by 20%. “I didn’t expect such a big increase and I’m not sure it would have happened without the law.”
Her colleague, Sævar Már Atlason, moved to Aranja from another Nordic IT company, which he insists has no salary transparency and where employees do not disclose their salaries. Although he joined in an almost identical position as a senior software developer, his salary has increased with the move. “100% transparency is a welcome change — it creates better team dynamics, and you get a better sense of market pay to ensure you’re on top of your position,” he said. me”.
Aranja has a transparent salary system and uses salaries based on Reykjavík market rates, which are close to the top of the tech market. But no matter where employees live, they’re all paid the same, so there’s no penalty for moving to an area with a lower cost of living. Technical director Eiríkur Heiðar Nilsson said: “One interesting thing we learned about transparent pay is that it can add undue pressure on new employees to prove they ‘deserve’. with the salary they negotiated. “This backfires, as this is already a stressful period for new hires and we want current employees to help and mentor them without harming them if they’re underperforming.” To avoid this, a lower starting salary is negotiated, with the promise of a performance review after six months when they are moved to the right level.
In some countries, gag clauses are common. 1/5 workers work in the UK It is forbidden to talk about wages with colleagues, and in Australia, pay confidentiality clauses are often written into employees’ contracts.
Under U.S. law, employees have right to discuss compensationand anti-gag provisions are the law in 21 statesprohibits employers from requesting salary history information from job applicants to prevent prior wage discrimination.
