Talking salary transparency with the Evil HR Lady

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Talking salary transparency with the Evil HR Lady

Welcome to another exciting episode of All About HR! This is the series for HR Professionals and business leaders who want to future-proof their organization and learn about the latest trends & insights from industry experts, CHROs, and thought leaders. 

Why is salary transparency a must for successful organizations?  In this episode of All About HR season 2, we sit down with Suzanne Lucas — also known as the Evil HR Lady — to talk about pay transparency in the age of remote work and the Great Reshuffle.

Suzanne is a passionate HR consultant, coach, writer, and speaker who makes resumes better, makes conferences sparkle, and makes websites attract HR experts.

In this episode, we’ll discuss: 

  • The reason talking about salaries is still a taboo 
  • How to balance between keeping costs low and paying fair salaries 
  • The impact of legislation on salary transparency 

Watch the full episode to discover how you can help your organization build a well-structured salary policy to win the war for talent!

Transcript:

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Suzanne Lucas: I did see a job listing the other day that said: “Zero to three years, the salary ranges A to B. Three to five years of experience, the salary is from B to C”. And I was like, well, that’s so much better than just having this huge range. So companies will try to get around it, they need to understand that this benefits them to you know. As we talked about earlier, why waste my time interviewing people that won’t take the job? Why? That doesn’t make any sense. And also, if I’m underpaying you eventually, you’re gonna find out.

Neelie Verlinden: Hi, everyone, and welcome to a brand new episode of All About HR. My name is Neelie. I’m your host. And on today’s episode, I speak with Suzanne Lucas. Suzanne is also known as The Evil HR Lady. She is a writer and a speaker. She has a very active, great community on Facebook, and she does many other things. And our conversation is going to be about salary transparency, a topic I think that we can say a lot about.

Neelie Verlinden: Let me welcome our guest. Hi, Suzanne, how are you?

Suzanne Lucas: I am splendid. And happy to be here.

Neelie Verlinden:  Yes, I am so happy that I get to talk to you again. Because before we started to record this conversation, I already told you that I think it was the end of 2020 that we last spoke and I remember then we were obviously thinking about what is going to be next for HR in some sort of post-pandemic era. I remember you already saying that HR was probably going to have to think about what to do with the vaccine mandates or not. So I think that’s the last time that we spoke, Suzanne.

Suzanne Lucas: So much has happened since then. So much. 

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Neelie Verlinden:  Exactly. I know. I know. But so how have you been?

Suzanne Lucas: Well, I have been good. You know, speaking of vaccine mandates. All vaccinated and had COVID. So you know, alright, try to do a little bit of everything. But yeah, things are good. Things are always happening in the HR community, and nothing is the same as it was. We talked in 2020. Everything’s different now. 

Neelie Verlinden: Yeah, definitely. And today, Suzanne, I think we’ve got a super interesting and important topic as well, because we are gonna chat about salary transparency. Now, let me start straight away with an article that you wrote, I think you wrote it for Workable. And it was about salary transparency. And I think one of the things that stood out to me in that article was that you said: We are with salary transparency now where we were 30 years ago with mental health, meaning that people are slowly starting to open up about it. And something else that I thought was very interesting in that same article was you mentioned a Glassdoor survey that said that 70% of employees across seven countries say that salary transparency is a good thing. And yet, hardly anyone talks about it. Now, my first question, then, of course, is, in your opinion, where does that taboo come from?

Suzanne Lucas: We’re told that there are three things that you don’t discuss in polite company – money, religion, and politics. And politics now are so controversial, that unless you know that the people sitting across from you have the same beliefs as you do, you don’t want to bring it up. Religion is not as big of a part of people’s lives now as it used to be. And that leaves money. And money is an interesting topic because I don’t think that it’s proper for me to say, hey, Neelie, how much do you make? Because that’s just weird. But if I were applying for a job at AIHR, I think that’s a legitimate question. You know, just tell me a bit about what I can expect salary-wise, and among coworkers, it really needs to be something that is open. And you know, we had this discussion in my Facebook group, which is called Evil HR lady, and it is a lively, really good group of 16,000 members. So, there are some good discussions going on in there. And you know, one person is like: I don’t want my employees to know how much everybody else is making because they’ll just come and complain to me about it. My response is: If you can’t explain why there’s a difference in the salary, then the problem is with you and not the employees. And of course, there’ll always be people that complain, you know, that’s is always going to happen. But they’re going to complain whether their salary is transparent or not. So if you don’t feel comfortable explaining a difference in salary, the solution isn’t to hide what other people’s salaries are. The solution is to make your salaries at market rate, so that you can sit down with any employee and be like: This is how we calculated your salary. This is why you’re at where you’re at.

Neelie Verlinden: Yeah, absolutely. And this is actually something that I really wanted to talk to you about as well, Suzanne, because you talk about an example in that same article as well, where you say that in the US and some states, there has been some legislation that came out for this reason to try to get more transparency when it comes to salaries. And then it seems that some organizations are willing to go to great lengths to avoid being that open about salaries. Now, you touched on it I think a little bit already on where the problem lies. But why do you think so many companies have an issue with this?

Suzanne Lucas: Part of it is simply that it’s just not done. We just don’t do it. It’s just how it is. We just don’t talk about it. And it can be very difficult to overcome that. I mean, it’s the same thing. That’s why I started out with the comparison of mental health. You know, my great-grandmother died in a mental hospital in 1939. And the family for years and years like to pretend that didn’t happen. And then when it became obvious that we couldn’t, you know, wish it away, then it was like, well, she probably had a brain tumor. And that’s what made her go crazy. And it was just so embarrassing to the family in 1939. And it was embarrassing up until recently. Whereas now, I’m like, oh, yeah, I take antidepressants because I suffer from depression. And everyone’s like, yawn. You know, it took this really long time to get us to that point where some of us and not everybody is willing to talk about mental health. And I’m not saying that salary transparency is as important as mental health. Mental health is far more important than salary transparency. But I think it’s that same thing that we start slowly. And part of that slowness here is saying to companies: Please tell us what your salary range is when you post the job. And there’s no logic to me behind not doing it, because if I’m saying: Oh, I’m only going to come work for you if the job is $75,000. And you don’t tell me what it is, but you have a budget of $55,000? We’re just wasting time. You’re interviewing me for a job I won’t take. I’ve used up my time, you’ve used up your time. Why? Why would we want to do that? And why do companies think that they’re so special, that they could convince me to take a job at $20,000 less than I’m willing to take? Sorry, but no job is that special, you know. Just be honest and upfront about it. 

Neelie Verlinden: I’m wondering, Suzanne, could it perhaps be that in a lot of companies, there just hasn’t really been some kind of well laid out way of how to deal with salaries that are being offered to people? Maybe there’s just a bit of a lack of a structure? I don’t know, I’m trying to understand why this is something that seems to be so difficult for so many organizations?

Suzanne Lucas: There are companies that don’t have a good structure. There are companies that will throw money at one person and not at another because they like that person better or they’re trying to get this person to stay or they’re offering a counteroffer and that’s fine. But when you have two people doing the same job, that can get you into problems. And you know, of course, the laws vary from country to country. But within the US, if you have substantial differences between male and female employees or black and white employees that are doing the same job, you better have a really good justification for that. And there are a lot of companies that don’t. And one of the things that drive me crazy, and this is going to put me on the bad list for recruiters everywhere, is the concept of salary negotiation. I hate it. There’s a market rate for a position. And maybe if you’re hiring me as a salesperson that’s going to have to do a lot of negotiations, then my negotiation skill should be part of how you evaluate my market rate. But if you’re hiring me to do computer coding, why should I make more than you do? We’re doing the same job because I’m better at negotiating than you? So is negotiating part of our job? Does that make me a better coder than you? Of course not. So why do we do this salary negotiation? As a hiring manager, I don’t do salary negotiations. This is my offer, the highest and best. That’s it, I have no problem when someone comes back and asks for more, but I just reiterate: Nope, this is what it is take it or leave it, and I’ve had people leave. And that’s okay. Because I’m not going to pay you more than you’re worth. But that way, all of my employees know that they’ve gotten a fair salary. I am never scared that they’re going to find out their coworker’s salary and say: Hey, why is she making more than I am? We know why. You know, here it is, here. It is all laid out. And if we could get to that point, how much easier would it be?

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Neelie Verlinden:  Absolutely, because I mean, and we’ll talk about this a little bit further on as well, at least I would like to, but because I do think that we will probably see more and more legislation trying to get to more and more transparency about salaries. And I do fear a little bit that for a lot of companies, that will be a bit like opening Pandora’s box because there’s probably going to be some pretty hard to explain discrepancies between the salary of one person and the salary of another person while they are doing the same job. So yes, I totally agree. If we could just like not do all of that, and just be upfront and honest about it already, during the hiring phase, that would avoid a lot of uncomfortable situations afterward.

Suzanne Lucas: Absolutely. And there are going to be a lot of uncomfortable things. And this is something that I see a lot in smaller companies. It’s like, okay, I don’t really know what I’m doing. But I’ve started this company, and you know, I want to hire you. And you say, I want to earn this much. And I say okay, but I haven’t done any compensation analysis. So now, you could be overpaid. You could be underpaid. And if you’re overpaid, you’re not going to complain about it, right? If you’re underpaid, then that comes as a problem. And I hire my second employee, and the second employee says, you know, I want this higher salary. And here’s the data to show you. And I’m like, crap, now I have a choice. Do I give Neelie a raise to bring her up? Or do I just cross my fingers and say, Oh, I hope that she doesn’t ever find out?

Neelie Verlinden: Yeah. This is what seems to happen in a lot of cases. I do wonder here though, Suzanne, what would you say to people then who would argue: Okay, yeah. But you know, a candidate when they apply for a job, they have a certain responsibility as well to know their worth and to know their market rates. What would you say about that?

Suzanne Lucas: I think that as a general rule, it’s very difficult for a layperson to figure that out. Now, I can figure it out and I’ve actually told employees this before. I had one employee who used to complain that she was underpaid. I knew that she was overpaid. And I knew that there was no way she could get another job making as much as she did. And I finally said to her: You know what, I can’t pay you anymore. But please go out and find a new job that will pay you more. And she never brought it up again, because I’m sure she went out and found out: Oh, I am making good money. And she was. And when I say overpaid, she wasn’t like horrendously overpaid. But I knew that on the market, she wouldn’t do any better. And she was a great employee. It’s just that this is the market rate. But how am I supposed to know when I moved? I moved to the Netherlands. How am I supposed to do a really good analysis? I don’t speak Dutch. I’ve never lived there before. You’re the only person I know there. How am I supposed to walk into a company and be like my market rate is this? I mean, I can Google. I can go to Glassdoor. I can, but is that really going to give me an accurate answer. And whereas compensation departments should have access to salary surveys. They know what people are accepting in job offers, they know what people are turning down, and they know when employees leave. Any data that I can get as an individual is lagging data. And right now, there’s been a lot of churn in jobs pretty much everywhere. And we call it this great resignation. And salaries in some areas have really gone up. How much? It depends on your field, on your skills, on how many other people have it. Maybe I’m worth 5% more now than I was last year, or maybe I’m worth 40% more than I was last year. I’m going to know in a year what the market rate was. Now, I’m not going to know what today’s market rate is unless everybody’s open with their salaries. And that’s just going to tell us what’s going on? 

Neelie Verlinden:  Yeah, I think that’s such an interesting one, Suzanne, and I think, Hey, you see this interesting dynamic as well, because I agree with you on what you’re saying, especially if you’re going to apply for a job in a different country. But even in your own country, you probably as an individual looking for a job, you probably always have lagging information, as you said, at the same time. Let’s say, in putting our trust in the hands of the company, and the department or HR, or the hiring manager from the company we apply to, that is also really giving a lot of trust to them. Because from a company perspective, of course, there’s always going to be this balance between, on the one hand, the company’s interests, as in, yes, they want to, of course, pay the best possible salaried employees. At the same time, there’s also always this part where they want to keep the costs low. And then of course, there’s the employee or the candidates’ interest, and they want to get the best salary that they can get in the market. 

Suzanne Lucas: Keeping your cost low can sometimes bite you. And there was a restaurant manager in the United States at Applebee’s, who wrote this memo, and it kind of went viral. So people maybe have seen it say: Oh, with the increase in gas prices, people will be willing to work more hours, blah, blah, blah, we’ll be able to pay people this. Okay. Now he’s got some faulty logic, but let’s assume that his logic is correct. And that they can pay people less. That’s going to cause an increase in turnover. It costs on average 5000 US dollars to train an entry-level server in a restaurant, you know, it would be so much smarter to say we want to slow down our turnover. So rather than paying people less, let’s give everybody a $1,000 retention bonus every six months. That’s $2,000 a year, less than the cost of turning one person over there. Your employees are coming out ahead. You’re coming out ahead. You know that. But the thing is turnover costs aren’t black and white the way payroll costs are, I can say, but this is my cost of payroll. This is what it is. Finished. Done. It’s in a nice box. Turnover costs are more squishy than them. How much time did it take me to train the new person? How many mistakes did that person make while they were being trained that caused us to have to give free food to someone or to rebake a dish or all of those things? And as an experienced server, I can handle six tables. As a new server, I can handle two. So now I’ve got to pay two servers to do the work of one. Those costs are not black and white. And so businesses often overlook them. And when you say okay, it costs $5,000 to train a new waitress. How much does it cost to train a new VP of Finance? And you say: Oh, well, the VP of Finance, he has all the experience, you know, when he doesn’t know, your systems, your policies, your history. All of those things take time to learn. You can be a super genius and still needs to be trained and it’s still cost money.

Neelie Verlinden:  Yeah, yeah, no, totally. I think this is a very valid point. And I’m really glad that you also gave this concrete example There’s also a proposal that came from the European Commission. And it’s about legislating pay transparency and also enforcement measures for all types of workers in the EU Member States. My question really is, Suzanne, how much can we really expect from this kind of legislation? Also, looking at what we see happening in the US?

Suzanne Lucas: It depends because sometimes when I’m looking at jobs listings, I’ll see a salary range of 57,220 to 8000. That tells you nothing. That tells you absolutely nothing. That’s a company being like: I’m complying with the law. Well, not. And that’s exactly what they’re doing. And if you argue with them, they’ll say, but it really depends on the person’s levels, and blah, blah, blah. I did see a job listing the other day that said: “Zero to three years, the salary ranges A to B. Three to five years of experience, the salary is from B to C”. And I was like, well, that’s so much better than just having this huge range. So companies will try to get around it, they need to understand that this benefits them to you know. As we talked about earlier, why waste my time interviewing people that won’t take the job? Why? That doesn’t make any sense. And also, if I’m underpaying you eventually, you’re gonna find out and you’re gonna leave, and maybe you’re not going to tell me why you’re leaving. Maybe you’re just gonna say, like a lot of people do, Oh, you know, I really love my job here. But this new opportunity came up, and I just couldn’t pass it up. I’ll miss you guys so much. You know, that’s what people say when they leave jobs. That happens to nobody. Nobody leaves a job that they love, that they feel like they’re being treated properly. They leave because there’s a problem. And sometimes it’s because of salary. And set turnover is very expensive. And let’s keep that in in mind. I don’t like releasing the data on gender pay gaps, though. And the reason why is that, if I am a vice president, and Steve is an admin, we have a huge gender pay gap. And when you just say, Oh, look, women make 200,000 euros a year, men make 50,000 euros a year, what a horrible sexist company, if there’s no context around it. And the other thing is in a lot of European countries, there are requirements that you can allow people to work less than full time if they wish. And for whatever reason, women are the ones that want to work 80%, 75%, 50%. If you’re looking at overall salaries again, that is going to make it look worse. And even if you gross it up and say: Okay, you’re working 50% and earning 50,000. So we’ll say that your full-time equivalent is 100,000. But you’re not going to get promoted as quickly working 20 hours a week as you are against someone working 40 or 60. And it’s not because we’re racist, sexist, whatever. It’s that you’re not learning all the things that you need to learn to move to that next level as quickly. And so I’m always concerned when people talk about gender pay gaps. What you need to look at is the gaps in similarly situated jobs. If I’m an accountant, you’re an accountant, we both have the same number of experience, the same level of experience, we should be making very, very close to the same wage. But if I’m an accountant, and you’re a nurse, maybe they should be the same. Maybe they shouldn’t. I don’t know, how do they compare? It’s not something that we should do, but I understand the sentiment behind it.

Neelie Verlinden:  Yes, but from what I understand, I mean, if there’s probably still a lot of room for improvement in terms of how we are calculating these gender pay gaps, I should say, I think there’s something to say for the fact that we should really make sure that we are comparing apples with apples. 

Suzanne Lucas: Absolutely. And we need to be comparing apples to apples. And that I would like to see. That makes sense to see. Because I want to know whether women are making the same amount as men. And interestingly enough, Google did a study of their own employees. And they found out that when you compare those apples to apples, women were making more than men, but companies sometimes are like that. But also that you should know, overall, women tend to make, in similar work to men, same number of hours, same experience, when you control for all of that, they make about 98 cents on the dollar of what men make. It’s still lower, and it needs to be one to one. Absolutely. But it’s not this huge pay gap that we hear people talking about. Because when you do similarly situated people, they should be making the same amount.

Neelie Verlinden:  We are totally aligned on this one. Suzanne, I think. Now, what I would also love to talk about since you know, this podcast is called All About HR, you are the evil HR lady. So, you know, let’s chat about HR’s role in this as well. I think from what we’ve discussed so far, you know, we’ve touched on the legislation initiatives, both in the US and in Europe, but these are all like external factors. And I think that we probably both agree that you know, these kinds of things, these kinds of big changes, and also changes in mindset, they ideally come from within the company, right? Let’s say, you know, some of the people in our audience, they’re working in a company, and they really want to take some steps when it comes to salary transparency within their organization. What are some tips that you could give them, you know, when it comes to that?

Suzanne Lucas: First of all, what HR needs to do is start with a salary analysis of the company. And to determine where your gaps are. Where are our problems? And every company has them. They sneak in, things happen, you know, it’s very difficult to keep everything perfect. You need to start there. Because before you can convince senior management to be more open about salaries, you need to make sure that your salaries are something that you’re comfortable being open with. And so the first step for HR is to do that salary analysis and take a look at whether you are paying people not only at market rates, but are you paying the same across gender, race, whatever lines? Also, something that is a new problem is people working remotely. And this is a huge question, because we all accepted that you make more if you live in New York City than if you live in rural Iowa, and nobody blinked at that. That’s just, of course, you do. But now I take my New York City job, I’m doing the exact same work. And I go back to live in my hometown of rural Iowa, should I get a pay cut? It doesn’t make any sense. But for the last, I don’t know, billion years, we’ve accepted that salaries are higher in New York City than in rural Iowa. But now we have to look at it in this different light. And so you need, as a company, you need to decide. And it’s been really interesting. A lot of big tech started out saying: We’re gonna cut salaries of people that move out, and people are like, why I’m bringing the same value to the company, I’m just sitting someplace else. And no company said: Hey, why don’t you go ahead and work remotely. But our company is based here, you know, in this low cost of living thing. And if you move to San Francisco, we’re going to increase your pay. No company said that. It was all on the cutting line. So you need to think about that. But first, you’ve got to look at those things, then you’ve got to convince managers that the world is not going to end if you just put salary ranges on your position. If you don’t do this, legislation comes after you. That’s what we’re finding in the EU. That’s what they did in Colorado. New York City has that legislation going into effect I think in May as well, because you can either do it voluntarily or the government does it for you. It’s far better for you as a business if you do it voluntarily, then there are no regulations to follow. You can just do what’s best for your company. But if you can start doing that, then HR needs to demonstrate, look, the candidates we’re getting are on the same page as we are and we’re getting higher acceptance rates or whatever or you find out why we’re not getting any applicants. Oh, maybe it’s our salary and then you can adjust for that before you spend all of this time and effort interviewing people only to find out that people won’t take the job in the end. And you really need to learn to put it in financial terms, because your CEO, your head of finance, they speak dollars or euros or whatever they speak. And in HR, we have a tendency to speak feelings and fairness, and what is right and wrong. And CEO, he wants to know, tell me about the money? How is this going to benefit my company? And there’s plenty of stuff to show that it can benefit it, but you’ve got to be able to show it.

Neelie Verlinden:  Yeah, totally. Very interesting that you say that Suzanne. Because, you know, HR needs to learn to speak money. And I think one other thing that I was thinking when I heard you talk about this is that this time right now, where so many companies are actually having to rethink their salary policies anyway because so many people working remotely now. And yes, a lot of people also that they moved to other areas and stuff. So this is a topic at the moment for companies. So why not grab this opportunity to basically completely review and maybe rethink our salary policies, including the transparency bit? I think this is. in a way, the perfect time for it, right?

Suzanne Lucas: I fully agree with you. Now is the time. You have salaries coming up in a lot of areas, and it’s forcing discussions. People are really talking about things now. Now, they’re not talking about it openly in the terms of, I say, you know, like I said in the beginning, how much money do you make. People aren’t doing that. But they are posting things online, anonymously. There’s this huge community on Reddit called Anti-work, and they’re a little bit wacky. But leaders need to be aware of what’s going on because they’re discussing job offers. They’re not naming company names, and they’re not naming themselves, but they’re discussing job offers, and they’re discussing salaries, and people are learning their rights. And of course, those vary from country to country. But in the United States, you have an absolute right to discuss your salary with your co-workers. As long as you’re not a manager, if you’re a manager, then that is another story. But for the average person, you have the absolute right to walk up to your coworker and say, Hey, this is how much I make. People didn’t know this. And they are starting to find this out now. And this knowledge is power. And so businesses can either hide from it and have the government step in like it’s happening in the EU, like it’s happening in Colorado, like it’s happening in New York City, and force you to, or you can say: Gosh, this is what candidates want to know, this is what employees want to know. Absolutely.

Neelie Verlinden: Now, Suzanne, we always have a part in our podcast where I get to ask my guests about three things basically. And so the first one is what is, in your opinion, the biggest cliche that exists about HR?

Suzanne Lucas: The biggest cliche that exists about HR is that HR is always going to take the side of management. And we’re not that way. What we’re doing is taking the side of the company’s well-being. And sometimes that means taking the side of the manager. And sometimes that means taking the side of the employee. And we really need to investigate before we take a side in any dispute and figure out what is best for everyone, and treating all of your employees fairly and legally is good for the company.

Neelie Verlinden: Well, I have nothing to add to that. Suzanne, thank you for that one. And now the other thing I always ask is if you can share an epic win, and an epic fail with us, and I mean, I’ll leave it up to you to decide which one you’d like to start with.

Suzanne Lucas: Oh, boy, um, so I can do my epic win and epic fail in one story. So here’s my epic fail. I was running a salary increase program for 30,000 employees. And there was a group of salespeople. But we were going to sell off a division of the company. Okay? so the salespeople were going to the new company, right? And the head of the sales division came to me and said: We’re not going to give increases to these people, even though everybody else in the company is going to get a raise on January 1. These people weren’t because we’re selling them off in March or whatever, though, so we’re not going to give them. And I said this is a very bad idea. They will not be happy. And if you have employees quit, the deal might fall through. Because the company that’s buying it is also buying the Sales-trained people, right? So if you have people quitting because they’re unhappy, that’s gonna damage your deal. It is not going to be good. Did they listen to me? Of course not. And it was a spectacular failure. And then they had to come crawling back. And then I had my win when they’re like: Okay, yeah, we need to give these people raises. So, um, you know, it looks like a failure at the beginning, because nobody listened to me. But then that turned out that I was right.

Neelie Verlinden: Yeah. And then there was the win.

Suzanne Lucas: And then there was the wind. 

Neelie Verlinden:  Nice one. I don’t think we had a fail turn into a win on the show before. And also it was related to the topic that we talked about. So this is fabulous.

Suzanne Lucas: I try. Yeah.

Neelie Verlinden: Thank you so much, Suzanne. I mean, thank you so much for joining me today. I really enjoyed our conversation. I hope you did, too.

Suzanne Lucas: I always enjoy speaking with you.

Neelie Verlinden: Thank you so much. And to our audience. Thank you so much for tuning in to a new episode of All About HR. I hope you enjoyed it just as much as I did. And I hope to see you soon for a new episode of All About HR. Bye.

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