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Study: Only 1 in 4 workers say their employer is transparent about pay

Study: Only 1 in 4 workers say their employer is transparent about pay

Pay transparency is crucial in the modern working environment, and the negotiating process might resemble a game of poker rather than a transparent exchange about the importance of compensation.

Nowadays, one in every four employees believes there is a widespread lack of pay transparency and fairness at their companies. Indeed, only 23% of workers believe their company is clear about how employees are compensated and that it is okay to inquire about their salary according to the results of a recent survey [PDF].

Pay transparency. Source:

Nearly half of workers (46%) believe they are not paid adequately compared to persons in the same function at other organizations, and more than a third (37%) think they’re not paid fairly compared to their internal colleagues. 

This notion of unequal pay does not bode well for firms in the midst of robust competition for talent, especially given that remuneration was identified as the top priority by respondents when considering a company for employment.

Lack of pay disclosure

Moreover, not only are there fewer pay discussions between managers and employees, but there is also a knowledge gap among those managers on how pay is calculated. Half of the workers polled said they had never inquired about how their boss calculated their compensation.

How is pay determined. Source:

Half of the workers said that they had never inquired management about how their compensation is calculated in the poll. Intriguingly, of the 49% who inquired, half said that their management was unable to answer the question satisfactorily, and 17% stated that their manager was unable to answer the question at any time.

How is pay determined response. Source:

David Turetsky, from, said:

“The pressure is on for organizations to pull back the curtain on pay, educating managers on their prevailing pay philosophy and how to communicate it. I expect when we conduct this survey next year, we’ll see movement in that direction.”

One-quarter not comfortable discussing salary 

In general, employees do not feel comfortable discussing their salaries, and just one-quarter have discussed wage information with both friends and colleagues, indicating that compensation talks are not exclusive to the employee/manager relationship.

Companies seeking to win the fight for talent must not overlook organizational culture, which rates second only to income regarding what people value in a company when choosing which one to work for. Flexibility in terms of where and when one works, as well as prospects for professional growth, ranked third and fourth, respectively, after organizational culture. 

However, given that startups have laid off almost 100,000 workers since the pandemic broke out, pay transparency nevertheless remains an issue despite the current labor market conditions.

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