About two years ago, Rokt, an e-commerce technology company that helps brands such as Wayfair and Lands’ End transact online, published its employees’ salaries in an effort to “enforce fairness and fairness” in its pay structure. began to

But there was another reason. As with most companies, the information was leaking anyway. Rokt’s chief human resources officer, Sarah Wilson, said releasing the numbers for everyone to see seemed less disruptive than allowing them to go through the rumor factory. was broken

“Rewards are like the best kept secret, so everyone knows,” Wilson said. “At the end of the day, Susie earns more of Jessie’s wrath, so instead of getting mad at the system for being unfair, don’t get mad at the employee for sharing.” You know… we wanted to remove all that distraction.”

The fashion industry is notorious for its wide range and often opaque salaries. A store employee or entry-level designer might earn as little as $10 an hour, but an executive or creative her director can easily clear her six- or seven-figure salary.

Experts say the lack of transparency is often intentional. This is how the brand maintains its reputation as a creative paradise of unclassifiable and unconventional types. It is also a convenient way to cover gender and race pay gaps. When salaries are kept secret, female workers may be paid less than male workers, or creative directors may be paid less than junior design assistants by 20. It’s hard to find that you’re earning twice as much.

But the industry faces pressure to be more open. Labor shortages, rising turnover and new disclosure laws in California and New York are turning pay transparency from a liability into a competitive advantage. In addition to this, there is generally a more vocal workforce who can voice their dissatisfaction with unfair wages and the prevalence of remote work on social media. Fashion companies are realizing the benefits of standardizing pay scales and letting the world know about them.

lay the foundation

While some large companies such as Whole Foods and Starbucks now disclose salary ranges for most of their employees, Fashion’s disclosures tend to be limited to advertising base salaries for store employees.

There’s a lot more going on behind the scenes, experts say. Some fashion companies are taking steps to define standard career levels within their organizations. This may include ranks such as junior, senior, director, and job titles such as merchandiser, designer, account her manager.

The next step, according to Jeff Hewitt, partner in the Leadership, Transformation and Organizational Practice at business consultancy Kearney, is to define pay ranges—the minimum and maximum amounts you’re willing to pay someone within a job title or title. is to define

For companies, the essence of announcing salaries is to build trust and improve the company’s overall culture, experts say. But companies can’t do that unless transparent pay is fair.

“Before we can ensure transparency, we must ensure fairness,” says Hewitt.

Rokt’s Wilson said companies need to be careful when creating pay bands not to use too broad a range that hides or exacerbates wage inequality by gender or race. It’s an issue that some laws don’t adequately address, he added.

“Companies should publish salary ranges, which can range from $60,000 to $90,000 for a job,” she said. can be hired for $60,000.”

Salary transparency should help organizations establish and maintain a clear and fair roadmap for career progression within a company, says Paula Reed, president of executive search firm Reid & Co. said.

“When you look at scope, you need to understand what justifies that scope—what people do in terms of performance, responsibility, or business impact,” she said. , what does that person need to do or be responsible for in order to progress to the next level?”

Some aspects of this approach are part of best practices in industries such as banking, finance, healthcare, and engineering. But it’s rare in the fashion industry for companies to take pride in valuing creativity and fluidity over corporate rigor and formality, experts say.

Rokt’s Wilson said, “The allure of the fashion industry itself is creating a much richer and more generous talent pool when it comes to compensation.” “It’s hard to want to pay people more and impact bottom line when they never had to.”

avoid the pitfalls

At best, pay transparency increases organizational trust, promotes fairness, leads to an overall improvement in company culture, and increases hiring and retention. At worst, it will compress compensation, complicate compensation incentives such as stock options and bonuses, and increase the workload of supervisors unprepared to answer difficult financial questions, experts say.

“Payment transparency can backfire,” says Reid. “What you find is that the people at the top of the income scale, even though they are sometimes your better performers, may not have room to move up.

At Rokt, Wilson said the company was proactive in hiring a workforce “philosophically aligned with the principle of having a fixed and transparent career ladder.”

“We also spend a good deal of time in coaching conversations throughout the performance cycle,” she said.

The company also has a “preparatory program” for managers to “learn how to discuss salaries,” Wilson said, and is proactive about fixed pay in its hiring process.

Organizations can be crafty in offering reward incentives other than cash rewards to high performing employees. Perks such as training courses to learn new skills, educational grants, and paid time off can offset salary concerns.

Other financial incentives, such as stock options and cash bonuses, should be formulated on a company-specific basis, said Devin Wheeler, president of management consultancy and executive recruitment firm Bond Creative MGMT.

This is a particularly tricky process for small businesses and start-ups, which tend to favor stocks and lower salaries, he said. For example, as a seed company grows and has more funding to add staff, it needs to find ways to offer competitive salaries to new talent, while maintaining existing salaries, including significant non-cash compensation, and need to adjust.

“Companies need to actively engage with their talent acquisition and HR teams. [to determine] It’s about taking advantage of this opportunity instead of seeing it as a crisis,” Wheeler said. “If companies embrace pay transparency as an important part of their culture, they can use it to build the best teams, products and brands.”