Pay Transparency: Auckland startup's pay equity initiative

Published 11 July 2024 | 2 min read

In workplaces across New Zealand, a persistent problem remains: employees in the same role often receive varying wages based on factors outside their control, such as age, gender, or background. This disparity not only undermines fairness but also demotivates employees and hinders organisational growth. Despite progress in other areas, equal pay for equal work continues to be a significant challenge, exacerbated by the fact that 88% of workplaces discourage salary discussions. This lack of transparency creates an environment where inequities can flourish unchecked, leaving employers with a critical issue to manage.

The case against pay secrecy

Research from recruitment firm Robert Walters reveals that the vast majority of workplaces discourage salary discussions, perpetuating a culture of secrecy that benefits neither employees nor employers. When employees are kept in the dark about how their pay compares to that of their colleagues, feelings of unfairness and resentment can grow. This lack of transparency not only impacts employee morale but can also lead to higher turnover rates and difficulties in attracting top talent.

Moreover, forbidding salary discussions is increasingly seen as an outdated practice. As noted by John McGill, Chair of Strategic Pay, "forbidding employees to discuss their pay with each other is futile." Social media and other platforms have made it easier than ever for employees to share information, making secrecy policies less effective and potentially damaging to a company’s reputation.

Tracksuit’s transparency approach

In the face of these challenges, Tracksuit, an Auckland-based tech startup, has pioneered a transformative approach to pay transparency. Since its inception in 2021, Tracksuit has implemented 100% pay transparency across its entire team, ensuring that employees in the same role receive equal pay regardless of gender, age, or background. This radical transparency has been pivotal in creating a truly equal and gender-blind salary structure.

Tracksuit’s key initiatives include:

• 100% pay transparency: Every team member knows what their colleagues earn, eliminating any guesswork or suspicion.
• Regular salary discussions: Salary is an everyday topic, making it a normalized part of workplace conversations rather than a taboo subject.
• Focus on career planning: Employees are encouraged to focus on their career goals and how they can achieve them, rather than comparing salaries.
  
  

Benefits of pay transparency

The benefits of Tracksuit’s approach are clear. Pay transparency fosters a culture of trust and openness, which can lead to higher employee satisfaction and retention. Employees who feel fairly compensated are more likely to be engaged and productive. Furthermore, transparency in pay can help attract a diverse talent pool, as potential hires are assured of fair compensation practices.

Additionally, Tracksuit’s success story offers a blueprint for other companies. By adopting similar transparency practices, organisations can move towards a more equitable workplace, thus enhancing their reputation and competitiveness in the market.

Achieving a positive future

For New Zealand managers, owners, and HR professionals looking to replicate Tracksuit’s success, the path forward involves several clear steps:

Commit to transparency

Make a company-wide commitment to transparency in pay. This might involve sharing salary ranges or making individual salaries public within the company.

Normalise salary discussions

Encourage open conversations about salary and compensation. Provide training to managers on how to handle these discussions constructively.

Focus on equity

Ensure that pay is equitable across all demographics. Regularly review and adjust salaries to address any disparities.

Career development

Shift the focus from pay to career development. Help employees set and achieve career goals, reinforcing that their worth is not solely tied to their salary.

The path to pay equity and transparency is not without its challenges, but the rewards are significant. Tracksuit’s experience demonstrates that with commitment and the right strategies, it is possible to create a workplace where pay is fair and transparent.