Many HR leaders are navigating a new world when it comes to setting and sharing information about compensation.
Fourteen states and Washington, DC, will have pay transparency laws in place by the end of 2025, and sharing salary ranges for open roles has become the default practice for many employers. Meanwhile, multinational employers are responding to laws being enacted abroad, such as the European Union’s pay transparency directive, which takes effect next year.
It was not surprising then to see a packed house at a May 19 WorldatWork Total Rewards session in Orlando titled “Connecting transparency with pay strategy.” An informal survey of the room showed many total rewards practitioners are still figuring out their approach, with most raising their hands to say their organizations offered “some” level of transparency, rather than a high level, or none at all.
HR Brew gathered insights from HR professionals in attendance about how pay transparency is changing employers’ compensation practices.
Communication demands transparency. “Over half of HR leaders say communication of total rewards is a top priority,” said Tauseef Rahman, a career practice growth leader with Mercer who spoke at a session on data and decision-making, citing figures from the consulting firm’s 2025 global talent trends survey.
And yet, Rahman added, only 31% of HR leaders say increasing pay transparency is a top priority. “The question we have is, if it is a top priority to communicate total rewards, how can you not be transparent about your total rewards? How can you communicate something without saying what it actually is? And that’'s the challenge that organizations are facing as we go through this work.”
Start here. “The most important decision” employers make in this process is “deciding how transparent they want to be,” said Gail Greenfield, EVP of pay equity and total rewards strategy and solutions with software firm Trusaic.
“Looking at, are we going to just be compliant? And there’'s nothing wrong with that….versus, all the way on the other end of the spectrum,” Greenfield noted. “That’'s the place to start because all your other decisions follow from your decision of how transparent you want to be.”
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No rush. “The last couple of years, companies have really been rushing to compliance,” said Glizcel Ditto, executive director of client solutions with HRSoft. One symptom of this practice was job postings with extremely wide pay ranges that some employers posted “just to be compliant, without really putting any thought to how they got to those ranges.” After New York’s pay transparency law took effect, for example, the gap between the low and high ends of some ranges was $100,000 or more, CBS News reported.
Ditto added, “I think that’s a dangerous place to be, because you’re already setting a precedent for what your quote, unquote, ‘strategy’ is…you need to make sure that you’re not just rushing to be compliant, that you’re actually putting some thought into the pre-work that needs to happen.”
Pandora’s box. “In some ways, being transparent opens more questions,” said Sara Hillenmeyer, senior director of data science at Payscale. “Companies that I’ve worked at where the ranges were not transparent, it was easy to tell an employee, look, you did great this year. Here’s your 3% raise.”
As employers reveal more information about how they pay, workers are likely to have questions about where they fall in the range, and what their career progression looks like. Hillenmeyer said, “None of our customers are immune to those questions…You have to have your house in order before you can open the door a little bit.”
Prioritizing communication. “We encourage employees to talk to their managers,” said Swati Radhakrishnan, senior director, global compensation with Adobe. The company has put time and resources toward educating managers about its pay philosophy, and training them how to have conversations with employees about pay decisions, she noted.
“The managers are the only ones who can tell [employees] why they are where they are on the range. Context is everything—without context, the range is just a number. And from our perspective, we wanted these conversations to happen.”