Pay Transparency — I have a hypothesis. Pay transparency is bad for companies that don’t pay as well as their competitors.
I think that it’s even worse for public sector employers.
You’re probably familiar with the concept of FOMO. Well, the fear of missing out is pretty significant for a high-quality candidate who now explicitly knows that someone doing his identical role in the private sector makes double or even triple his salary.
This is particularly true for innovators at public space organizations who work in analytics, advanced technologies, or even IT.
Last week, we wrote about knowing your worth. Well, this becomes an interesting concept when you make a value comparison in dollars.
Public space employees are typically paid less than their industry counterparts. Does that mean the work they do is less valuable?
Not in our eyes. Public service in any shape or form is valuable. It just turns out that the value doesn’t stack up that well when measured in dollars.
Fortunately for employers, some of these major pushes for pay transparency will only be enacted as the economy slows, interest rates rise, and the labor market loosens.
For example, the City’s new law on salary inclusion in job postings won’t go into effect until November. The state of the economy is going to be different in six months than it is today.
Companies that pay a healthy wage and share their wares with their most valuable assets will benefit. Job seekers will see employer generosity and award it with even more competition amongst quality candidates for slots at that company.
Pay transparency will also help close the gender pay gap, as well as silence some of the noise in recent years surrounding the topic.
At the end of the day, information is power. Elon Musk recently made jokes about controlling the teleprompter vs. controlling the country. The same is true of the narrative in the workplace: he who controls messaging controls the conversation. Pay transparency is another way for employers to manage this messaging.
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