SHRM All Things Work

Hannah Williams on the Case for Pay Transparency

Episode Summary

In this episode of All Things Work, host Tony Lee is joined by pay transparency advocate and CEO of Salary Transparent Street Hannah Williams to discuss the pay transparency and practical steps employers can take to achieve it.

Episode Notes

Many workers are pushing their employers to be more open about pay to help ensure that historically marginalized groups such as women and people of color are treated fairly. In this episode of All Things Work, host Tony Lee is joined by pay transparency advocate and CEO of Salary Transparent Street Hannah Williams to discuss the pay transparency and practical steps employers can take to achieve it.

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Episode transcript

Episode Transcription

Speaker 1: This episode of All Things Work is sponsored by Safeguard Global. Do you want to hire remote workers abroad? You can start today with Safeguard Global. Safeguard Global acts as an extension of your HR team, helping you grow into new markets with ease. Hire onboard and pay employees in over 170 countries around the world. Get top talent like a local with Safeguard Global. Learn more at safeguardglobal.com.

Tony Lee: Welcome to All Things Work, a podcast from the Society for Human Resource Management. I'm your host, Tony Lee, head of content here at SHRM. Thank you for joining us. All Things Work is an audio adventure where we talk with thought leaders and taste makers to bring you an insider's perspective on All Things Work. Today, we're discussing pay transparency. Many workers are pushing their employers to be more open about pay and specifically, who earns how much for which jobs in an effort to help ensure that women and people of color in particular are treated fairly. Joining us today to talk about this issue is Hannah Williams. Hannah is the founder and CEO of Salary Transparent Street, which strives to encourage businesses of all sizes to implement pay transparency. Hannah launched her efforts when she realized that her salary wasn't where it should be compared to others in her field, and she wanted to do something about it. Hannah, welcome to All Things Work.

Hannah Williams: Thanks so much for having me, it's great to be here.

Tony Lee: Well, it's our pleasure. So, why don't you start by telling us how you got interested in salary transparency. I mean, you started your career as a data analyst, right?

Hannah Williams: Yeah, I was, a numbers gal.

Tony Lee: Cool. So, how did you get to where you are now?

Hannah Williams: Yeah. It's been kind of a topsy-turvy journey, lots of ebbs and flows along the way. I've been trying to perfect this pitch and I really can't get it under three minutes. There's so many things that I went through in my career that really put me where I am today. Basically, if I think about pay transparency and my introduction to it, I'm only 25 years old so I graduated college in 2019, so really my entire career has only been about three years long, not too long, but in that time I had a lot of jobs. I job hopped a lot and went from one job to the next, really increasing my salary every time I moved.

I started at $40,000 when I graduated. And when I quit my most recent job to do STS full time, I was making $115,000 a year, which was great until you gain a little bit of perspective with my career. And I realized when I was at my fourth job, I was making $90,000 a year, and I realized that I was significantly underpaid, believe it or not. I was supposed to be at the $115,000 mark, which is where I eventually went to. And basically, that was my introduction to pay transparency. I learned the hard way that I was incredibly underpaid and that you can negotiate your salary and you should. And that's something that I never really knew about before. So, that was really my introduction to it. Kind of a little late in the road but got me to where I am now, so yeah.

Tony Lee: So, how did you figure out you were being underpaid and what made you think you were being underpaid?

Hannah Williams: Yep, market research. So, what happened was, this was like 2021, height of the Great Resignation, I was doing remote work and I got an offer to join this government contracting firm, making 90K, as a senior data analyst. And when I joined the team, I had another colleague and they fired him within a month of me starting. So, this was not ideal for me because it was a small team and I was brand new. So, basically when they fired him, my workload doubled. And they didn't replace him either and didn't really tell me what they were going to do. So, over the next few months, I just gained increasingly more burnt out. I was literally working sunrise to sunset for this company. And I started asking myself, "90,000, that's great, but is it worth the work that I'm putting in and the output?" I just felt like I was doing a lot more than what 90K was allotted to me.

And so really, it's not like I found a pay stub and I was like, "Oh my gosh, gasp, shock factor, I'm underpaid." It was market research. It was something that I'd never done before. I had always approached salary negotiation, well, talks about salary with recruiters from the standpoint that they ask you what's your expectation for salary. And I would just kind of tell them every time I moved up I would add 10 to 20K. Because I was like, "Yeah, if I'm moving up, it's worth it to leave for 10 to 20K. I never really factored that I could look it up and try to make sure that I was paid market rate. That sounds so silly to say, but I really never learned that. No one taught me that in school.

And so, I did a quick Google search, senior data analyst, Washington D.C., two and a half years of experience, how much should I be paid? And the number I got back was a real punch in the gut. It was around 110, 120. And I was at the 90K mark. So, I knew that I was significantly underpaid. And I went back to the company, I put together all my market research, I put it in this nice beautiful letter, also adding in what I brought to the company, the metrics, the value I added, the value I added to the contract. They sat on it for about three months, kept pinging me back and forth, "Oh, check back in a week. Check back in a week."

And then they told me flat out, "You can't negotiate your salary. You can't negotiate a raise until you've been with the company for a year. And even at that point, you can't negotiate for more than 5%," which was significantly less than I was asking to be paid fairly. So, I learned really the hard way that not negotiating your salary and not being prepared for conversations like that and also not having the access to pay transparency not only leaves you in the dark, but if you do end up in a job where you're underpaid, that compounds over time and eventually, you're going to lose out on a lot of money over time compared to other candidates that are paid fairly. So, that was my wake up call really.

Tony Lee: Yeah, and it's interesting because I think and hearing you talk about it, there might be some real generational differences in how employees view their pay. I mean, you're on the cusp of Gen Z, young, young millennial, old, old Gen Z, right?

Hannah Williams: Yeah, I'm right on the bracket. People are always like, "You're Gen Z," and I'm like, "I always thought I was a millennial." I never know.

Tony Lee: Yeah. But right in that area, you're among a lot of other people, research has shown, 90% say they're happy to share what they make. If you ask baby boomers that, less than half are willing to share what they make. So, do you think there's a different approach to pay transparency depending on how old you are?

Hannah Williams: Oh, definitely. And I mean, I see it with my interviews. When I go out and I do the interviews, my fiance's my cameraman, we always joke, it's kind of like a social experiment every time we go out. Because we see a lot of trends and discrepancies amongst people we ask based on how they want to respond to the question. And those discrepancies show that people in an older generation, like older age bracket, I'd say about over 40 to 50 definitely are a lot less willing to share, a lot less willing to even talk about pay transparency compared to anyone under 30 that we ask. It's really interesting.

Tony Lee: And any thoughts as to why?

Hannah Williams: I think that it's a matter of, if you're spoonfed an ideology from corporate America and this capitalist structure, we have that talking about your pay is rude and not appropriate at work, it's unprofessional, and you're spoonfed that for several years and decades, it's tough to change that mindset because it's kind of what you grow up with and you don't question it. But now, we really live in a generation where we have so much access to this data and holding companies accountable. And I think that values, like moral values in society are really becoming something that matter to a lot of candidates, like employees in the job market. So, not only is it kind of transparent, this conversation because of the technology that we have today and our ability to talk about it with one another, you can't hide from it, but also we have this idea that we want to work for companies that represent our values, that stand up for us, that care about us, that reflect our values, and that's one of them. So, I really think that's what's happening.

Tony Lee: Yeah. All right. So, let's go to kind of the root problem of not having pay transparency. I mean, Payscale came out with a study that showed that for every dollar earned by a white man, and I'm going to run through this little group here, Hispanic men earn 91 cents, Black men 90 cents, white women 82 cents, Black women 79 cents, and Hispanic women 78 cents. So, what does that say about how employers are compensating their employees?

Hannah Williams: Oh, I mean, data doesn't lie. It just shows that we're not paying minorities, women, people with disabilities, the LGBTQ community, anyone that falls in that group where you are able to be victimized by unconscious biases or any type of discrimination, you're not going to be paid fairly, like your odds of being paid fairly compared to white men are very slim. I think that it's great that the data's coming out. That's one of those things that we're looking at it right in the eye and we want to try to find a solution. And so, pay transparency is one of those things that will eliminate a lot of those barriers where those pay gaps come into play.

Like women, based on studies and research, are less likely to negotiate. But also, when they do negotiate, they are compensated less than men who negotiate for the same amount just based on those unconscious biases. So, when you remove the whole, "I don't know how much I should be making. I don't know what to ask for. I don't know what to negotiate for. Should I negotiate because I'm worried that I might look greedy if I do," when you remove all of that, you make it a lot less equitable. It's a much more open culture, inviting culture and accepting culture, but that transparency will also correlate to equitable salaries.

Tony Lee: Mm-hmm, all right. So, let's talk about practical steps now that employers are taking, employees are taking, job candidates are taking to try and remedy this. So let's start with, for example, Indeed, right? Indeed, the job site, has announced that they're going to start posting salary ranges for every job even when the company doesn't provide them. So, is that a good first step?

Hannah Williams: Yeah. And actually, Indeed is our latest Salary Transparent Street partner which is, a part of the reason we partnered with them because of this movement. I think that that's a great first step. It would be much better if the companies chose to provide that salary instead of putting the onus on Indeed if they choose not to. But it's a good step in the right direction. Baby steps is how we'll get there.

Tony Lee: Yeah. So, let's take the New York City case as maybe a step next step to that. For those who don't know, New York City's law is requiring job postings to show a salary range. Now, it was supposed to have gone into effect, it has not yet, it's still pending. Some New York City Council people had gotten feedback from businesses, especially small businesses, saying this would harm them. But do you think that's the direction we need to be taking?

Hannah Williams: Yeah. I truly think that the end goal is federal legislation across the board is that pay should be listed in the job description. It should be listed in any open job out there, it should be listed within companies. And there's different levels of pay transparency that you can have within a company. It can be that thing where you list the salary in the job description, it can be internally to a department, it can be internally to the company, or it can be externally. Like Buffer is a great example of a company that really has gone to the complete extreme level of pay transparency that right now you can Google what a custodian makes there.

So, I think that it's important for companies to examine what their employees want and how they fall on that spectrum of pay transparency. But ultimately, it needs to start at the negotiation table. Like when people join the company, that transparency needs to be upfront. So, it starts with listing it in the salary, in the job description, and then it starts further on with managers having a good sense of how to explain to people within a company why they are paid what they are and using metrics and data to validate that. I think that's really what transparency is and what people want. It's not to look at, to compare themselves to their colleagues, it's to understand why they're paid what they're paid and then also for the company to be able to validate that with data.

Tony Lee: Right. So, if you're advising a company who is trying to figure out how to do this in a fair way, the number one pushback we hear is, "Well, okay, maybe we'll post a range, but we don't want to post specific." Because if we have three people in this job right now and they're all earning, let's say they all earn $60,000 a year, and we need to hire a fourth person for that team and we can't find anyone who's willing to work for 60, so we have to pay 70 to get them to come in, well, you're then going to have a salary compression problem where you now have to give big raises to the other three, or you're not transparent. You don't let them know that the new person coming in is earning more and you hope they never find out. How would you address that from a company standpoint?

Hannah Williams: I mean, the second that you're hoping that your employee doesn't find out something that you did, you've crossed a line. I think that that's something that your employee wouldn't be grateful for. And ultimately, companies always try to place responsibility and blame on their employees for not being loyal to them, but companies aren't displaying loyalty back to their employees either. Because loyalty is trust, which means transparency and sharing information. And the second you're saying, "I hope they don't find out that I did this," you've lost that. So, it's really a moral decision and it's a decision that a company, it's a crossroads, which way do you want to go. Ultimately, the negative repercussions are a lot worse if you choose not to pay your employees equitably regardless of how that compresses your budget.

Tony Lee: Yeah, no question. I mean, Great Resignation is a great example of the repercussion. And actually, before we get away from legislation, I just want to ask you about one other thing. So, the state of Colorado has a law on the books that forbids companies from asking about a job seeker's salary history, right, in a way to try and get greater transparency and greater equality. And of course, what has happened is that you've got a number of companies that are actually putting in their ads that, "We'll interview all candidates for this position. Unless you work remotely from Colorado, you won't be considered." Does that surprise you?

Hannah Williams: No. I mean, companies have to look out for themselves too. And I get that, it's just a matter of, I think companies need to understand what they want from their employees and how they want to grow. And growing comes with working with your employees and being flexible and trying to understand what they need. And so, that is really a complicated issue, is the whole remote work salary transparency thing, it's a tough one to navigate. But I think that with communication comes a lot of solutions and discussion to try to find the best way to move forward for all their employees. So, they just have to lean into that discomfort and talk to people.

Tony Lee: Yeah, no, it makes perfect sense. All right. Let's talk about another aspect of this which is, you're in the Washington D.C. area, and I'm sure some listeners when they heard the salary that you were earning at 25 years old thought, "Geez, I've been working 20 years and not earning that much." Then again they may be not in data analyst type positions and they may be in much lower cost of living situations in different parts of the country. How important is that to think about with salary transparency, especially now that companies are hiring people to work remotely anywhere? Do you pay someone in San Francisco, or D.C., or New York differently for the same job than you do somebody who's in Wichita, Kansas?

Hannah Williams: Mm-hmm. I think that question raises a lot of red flags and puts people on alert like, "Oh, I'm being taken advantage of." But you also have to understand, and this is on the onus of employees, to understand how market research works and how the power of a dollar in different areas. A dollar's going to go a lot further in rural Kansas than it will in San Francisco. And so, it really goes back to that data, right? And looking at the economy, and market research, and companies understanding that, if you pay someone $60,000 in San Francisco, after that's weighted for inflation, and cost of living, and where people are located, what does that look like?

Because ultimately, if they're doing the same job, they should be paid the same. But when you weigh those salaries for cost of living, that is going to look a little different. Employees need to understand that if you're making $50,000 in Kansas and someone's making, for the same job making 90,000 in San Francisco, look at their costs, the cost to live there, the cost of rent, the cost of housing, the cost of school, all these things add up, that it is more equitable than you think when you take that into account. It needs to be very clear how that's determined. So, companies need to understand that communicating why they choose to make the decisions that they do with pay is almost more important than the decisions they actually make because it needs to be understood by your employees.

Tony Lee: Yeah, perfect point, employee communication is critical. And you made a mention earlier I wanted to loop back to, which is making sure that people managers are communicating effectively and are trained effectively so that they can ask the right questions in interviews and all that. Yeah, so how do you recommend companies do that?

Hannah Williams: Yeah, one of the issues, I just read this really great article, I think it was on Harvard Business Review about how pay transparency does lead to pay compression. And in their research they found that the reason for this pay compression isn't because of the decision itself to be transparent within a company, it's because lower level managers, the people that are direct managers for lower level employees, those managers don't work in HR. They don't have that specific training on how to discuss pay with your colleagues. And we know that because it's not happening now. That wasn't my experience. When I went to my manager and found out I was underpaid, he was like, "I don't know what to tell you. Here's another person you can talk to." And I had to go up the ladder to find an answer.

And so part of me, my response is, I feel bad for those managers because a lot of responsibility is placed on them to have the answers to these complicated questions that their employees will ask. But you're a manager, your goal and your role is to communicate with your employees and make sure that they're heard and that their questions are answered. And so, I think really that falls back to companies investing in really great training for their managers to ensure that that communication is happening, and also training on companies to understand why DEI programs are important and how to invest in them. Those go really hand in hand, I think.

Tony Lee: Yeah. Well, this is great advice, we really appreciate it. That's going to have to do it for today's episode of All Things Work. A big thank you to Hannah Williams for sharing her insights into pay transparency. And before we get out of here, I want to encourage everyone to follow All Things Work wherever you listen to your podcasts. And also, listener reviews have a real impact on a podcast visibility. So, if you enjoyed today's episode, please take a moment to leave a review and help others find the show. Finally, you can find all of our episodes on our website at shrm.org/podcasts. Thanks for listening and we'll catch you next time on All Things Work.

Speaker 1: This episode of All Things Work is sponsored by Safeguard Global. Safeguard Global is a company that's making it easier to hire people all over the world, whether you're looking to hire a remote worker in a specific country or expanding your global workforce into new territories. With Safeguard Global, you can hire workers quickly and compliantly, streamline onboarding and gain data analytics insights all with local HR support. Hire top talent anywhere, in any way with Safeguard Global. Learn more at safeguardglobal.com.