Over the past several years, there has been an increasing call for employers and job boards to be more open about the compensation levels of various job roles. However, many nonprofits, including mid-sized organizations, are struggling to get their compensation practices structured to a point where they feel comfortable about publicly posting salaries. Employers always have been able to post salary and benefits information on the Charitable Advisors job board if they choose. We encourage it, but do not require it.
There seems to be at least a couple lines of thinking that are driving this conversation about salary transparency:
1) Equity: Many people believe if a job is worth $50,000, it should pay $50,000. It is ethically wrong to hire someone who was underpaid in their last job, previously discriminated against, or desperate enough to take a new job at $40,000 — or whatever lower amount — and perpetuate their underpaid situation. Publicly posting the compensation amount or range ensures that applicants are less likely to be taken advantage of.
2) Reduce wasted effort: This situation applies to both applicants and employers. While an employer can make the argument that applicants should know the approximate pay range of a prospective job, there are holes to this thinking. For instance, some positions are atypical, applicants don’t always do their homework, and some employers pay below or above the market rate. In this instance, there are time-saving benefits to disclosing the salary of a job. If an employer pays well, then posting the compensation will likely attract more candidates. However, if the employer pays below market, only applicants who are willing to accept less will apply, reducing the employer’s time sifting through applicants who will ultimately demand better pay.
On the surface, posting compensation appears to be a simple decision. However, as you dig deeper it can get more complicated. Many organizations, especially smaller organizations, and organizations without a dedicated HR professional, have hired various employees over a number of years and brought them on board at pay rates that were based on a range of criteria, including level of experience, amount of budget flexibility during the respective hiring periods, the salary the candidate was willing to accept, and the organization’s urgency to fill a position at the time.
Over time, job responsibilities evolve, employees get promoted or job titles change. As a result, you can have multiple employees performing similar jobs at different pay rates or others working in high- or low-level positions whose pay isn’t representative of their responsibilities. On top of those variables, rising wages could mean a new hire may make more than someone who has been with the organization for years. Overall, an organization’s compensation levels across various staff and positions may not make much sense. Publicly posting a job at a given salary could likely alienate current staff.
While we are sensitive to the challenges of increasing transparency around salaries, we believe it is naïve of employers to presume that their staff members don’t already know what each other are making. We also believe that staff, especially those in the nonprofit sector, also recognize that funds are limited.
Your board can play a role here by developing a compensation philosophy and partnering with the CEO/executive director to identify sufficient resources that support some compensation adjustments. These measures could effectively increase pay equity and reduce employee turnover.
In a perfect world, every nonprofit would have a salary range for every job — one that recognizes variables such as industry demand for that type of role and levels of education and experience. These organizations also would establish similar salary ranges for jobs requiring similar levels of skills and experience. Most HR consultants do this type of work on a regular basis.
Get an inside look at how one nonprofit developed transparency around pay rates in How One Organization Built a Job “Architecture” to Reach Pay Equity in Chronicle of Philanthropy. The article details the multi-year process that a mid-sized nonprofit took to prepare to post pay ranges. (May require subscription to the Chronicle to access.)
Bryan Orander, President