Pay Transparency

The Opportunity

Organizations that build transparent, equitable compensation practices attract stronger candidates, retain experienced employees longer, and reduce the legal and reputational risk that comes with pay inequity. Pay transparency is no longer a progressive policy. It is increasingly a competitive one.

The Business Case

Salary history bans have been shown to increase women's pay by an average of 6.2 percent.³ Pay transparency laws in Canada reduced the gender pay gap by 20 to 40 percent.⁴ These are not small numbers. They represent a meaningful shift in who stays, who applies, and how much it costs to replace the people who leave.

Employee replacement costs between 50 and 200 percent of annual salary depending on seniority.⁵ Much of that turnover is driven not by poor performance or bad management but by the perception, often accurate, that compensation is unfair. That perception drives departures even when actual pay is at or above market, which means the cost of silence falls on fair and unfair payers alike.⁸ Disengaged employees cost organizations approximately 34 percent of their annual salary in lost productivity.⁶ Global disengagement cost the world economy $438 billion in 2024 alone.⁷

Pay transparency does not create problems. It surfaces ones that already exist, early enough to address them before they become retention crises or legal exposure.

What the Research Shows

In Massachusetts, women working full time earn 84.3 cents for every dollar earned by men.¹ The gap is wider for women of color. One of its primary drivers is the practice of basing new compensation on salary history, which carries forward every previous instance of underpayment into the next role.²

Pay secrecy does not create silence. It creates rumors. When compensation information is unavailable, employees fill the gap with speculation and comparison. That breeds distrust and disengagement regardless of whether actual pay is fair. Transparency replaces misinformation with facts, and facts are far less corrosive than guesswork.

What Good Looks Like

Good represents accessible baseline practices. Better reflects more intentional investment. Best describes what the most forward-thinking companies are doing right now.

Questions Worth Asking

• Do our job postings include salary ranges, including internal postings?
• Do we ask candidates about their salary history during hiring?
• When did we last conduct a pay equity review, and what did we do with the findings?
• Do our managers know how to talk about compensation when employees ask?
• If an employee suspects they are being paid unfairly, do they know what to do?