“Pay transparency laws are changing the information balance, shifting from a spectrum where the employer held all the information to one where the employee has more information, more light,” says Helena Almeida, Vice President, Managing Counsel in the Human Capital Managing Group at ADP (No. 14 on DiversityInc’s 2022 Top 50 Companies for Diversity list).

Proponents say that pay transparency laws can close the gender and racial pay gap, attract workers and boost employee engagement and productivity. While there are benefits to pay transparency laws, there are potential consequences companies need to consider.

Legal Challenges 

When Colorado’s law took effect in 2021, some employers tried to evade the law by saying Coloradans need not apply for specific positions. 

“What’s important to know and that wasn’t mentioned enough, is that it was a very small set of employers that were saying that and they were quickly brought into compliance with the law,” says Andrea Johnson, Director of State Policy at the National Women’s Law Center. “We’re in a bit of a culture change around transparency. We’re seeing some knee-jerk reactions from employers who have always felt that it’s to their advantage to be as secretive as possible.”

At the beginning of 2023, new pay transparency laws were enacted in California, Washington and Rhode Island. The laws include bans on employers asking about salary history to mandates that employers provide pay ranges during interviews upon request. 

New York City’s law, which rolled out in 2022, requires employers to list the minimum and maximum salary on all job postings, promotions and transfer opportunities. Workers have the right to sue employers who may face civil penalties of up to $250,000 for violations.

“There are justifiable reasons why pay might be different among employees, experience, performance, education, a seniority system and others,” says Dr. Sean Edmund Rogers, Vice President and Chief Diversity Officer at the University of Rhode Island and member of the PhD Project. “If similar employees are making significantly different salaries, managers will need to be crystal clear about why that’s the case. Or else, they’re opening their firms up to legal challenges.”

In response to the laws, some employers have implemented compensation changes throughout their companies, regardless of location.

“If an employer is based in that jurisdiction, but also other jurisdictions, many will say let’s apply this rule across the board because it’s not a complex regulatory regime,” says Johnson.  “It’s a relatively simple measure with significant gains in attracting talent, avoiding wage gaps and liability.”

Tension in the Workplace

Pay transparency laws allow workers to determine how their pay compares to colleagues in similar roles. This could lead to resentment if some workers are paid more to do the same job, resulting in low employee morale and high turnover rates.

“This is perhaps one of the biggest issues with the pay transparency developments – how leaders and employers manage employee reactions to their own and others’ pay,” says Rogers. “As workers become more aware of what their coworkers make and their employer’s pay practices, they will understandably want to know why they make what they make relative to others, particularly others with the same job title or that perform similar work.”

According to a Gartner study, only 32% of employees believe they are being paid fairly at work. Of the employees that view their pay as unequal, 13% are less likely to be engaged at work. Companies must be prepared to answer complex questions about pay differences or workers may perceive injustice or inequality.

“We are hearing of employers taking the time to look through their payrolls and the ranges they’ve been offering for different positions and ask – are those ranges associated with the position? Or is it associated more with the person who happens to apply? Is that related to race? Is that related to sex?” asks Johnson. “That deep, thoughtful analysis and having conversations with employees about how they set pay and what the justification is – those conversations are important because transparency makes people feel like they’re being paid fairly.”

Women aren’t feeling as valued as men in the workplace and pay inequality is one of the reasons. In 2020, women were paid 83% of what men earned. The gap widens even further for women of color. All companies in the 2022 DiversityInc Top 50 Companies for Diversity list and the DiversityInc Hall of Fame have systemic efforts to detect and correct pay inequity. Regression analysis controlling for variables like location and experience and engaging external consultants are some tools Top 50 companies use.

“If you’re asking for a 10% to 15% increase over your prior pay – which is common in a job negotiation – a woman’s gonna have to ask for a lot more than her male counterpart,” says Johnson. “That all plays together and makes negotiations rife with bias. What pay transparency does is help to level the negotiating playing field.”

READ: 8 Salary Negotiation Tactics for Black Women 

Compressed Pay 

One of the unintended consequences of pay transparency laws is pay compression. Pay compression occurs when there’s little difference between employee pay regardless of one’s knowledge, skills, experience or abilities. 

“We’re still learning why this might happen, but one potential explanation is that transparency acts as a force that keeps managers in check and keeps them from doling out unjustifiably different salaries for similar jobs or employees,” says Rogers. 

Some research suggests that laws in places like New York City can result in lower wages for some workers. ADP says employers should evaluate their compensation structure and pay ranges for each position and determine the impact of criteria like education, experience and tenure. 

“This isn’t about sticking a number on a posting and calling it a day,” says Almeida. “It’s about using this as an opportunity to look at what you’re paying for a particular role, what the differences are and what the justification is. That allows you to look at your data and your policies and see if there’s anything about the compensation policy that might be impacting pay.”

Benchmarking data based on roles, industries and location can help a company see how its pay stacks up against its peers. 

“If you can see what other people are paying for similar work, you can determine if your salary is competitive,” says Almeida. “My salary isn’t as high as what so and so is posting for this particular position, in this jurisdiction or this market. But how else can I attract talent?”

READ: Pay Transparency Laws are Crucial for Women of Color: Here’s Why

Compensation Conundrum 

Not all employers can pay top salaries when recruiting candidates. Depending on the state or city, forms of compensation like commissions, stock grants or bonuses may not be included in pay transparency laws. 

Some companies are thinking beyond the pay and focusing on benefits and other perks in their job descriptions. Research from the Society of Human Resources Management (SHRM) found the compensation and benefits employees want and what employers think they want are often misaligned. Employees said they are most interested in generous paid time off, flexible and remote working options and paid family leave. However, benefits aren’t as transparent as salaries.

“It’s important for employers to communicate about all the pieces of a compensation package because that helps them tell their full story of what they’re offering and who they are,” says Johnson. “It also helps workers make sure they’re getting fair pay, fair benefits or other compensation. It’s not just with pay that we hear of discrimination and pay gaps. It’s also sometimes in the benefits that are given. A woman might not get as good a compensation package as a man.”

Benefits and perks aside, Johnson says alternative forms of compensation can’t take the place of an employee’s base pay.

“The main source of income for most people is their job,” she says. “That’s what allows them to do all sorts of things – buy a house and pay for groceries. While employers want to provide the whole compensation package and information about that, I don’t think that lets employers off the hook for making sure that their base salary is strong.”

The nature of law enforcement work quickly caught up to Marshall as his naivety and optimism were soon replaced with a cynicism he describes as “unhealthy.”

“As much as I tried to fight it, the reality was that my job was extremely negative,” Marshall said. “Seeing the fights, abuse, accidents, deaths, (the effect of) drugs, alcohol and people regularly lying to avoid getting into trouble. I began to look for a way out.”

At first, Marshall, a member of the Sault Ste Tribe of Chippewa Indians, was hesitant to make any drastic changes as he lived in his hometown, close to family and friends, so he began investigating online MBA programs that could help him start a new chapter in a different profession. After meeting his now wife, Brittany, things started to change for Marshall and when she left to attend Western Kentucky University. In the end, the desire to be with her was too great, so Marshall decided to resign from law enforcement and join her at the university.

Despite leaving law enforcement, Marshall took some important lessons away from his time as an officer.

“The biggest lessons from my time in law enforcement relate to emotional and social intelligence, which are key elements of leadership,” Marshall said. “Officers’ emotions often set the tone for their social interactions. To keep an interaction moving in a positive direction, without escalating, I had to learn to keep my emotions under control. However, sometimes being too calm would actually be aggravating to the person to whom I was speaking. That’s where social intelligence came into play. My default was to remain calm, but I had to constantly observe the other person (or people) to see the effect that my words, tone, posture and actions were having on others and adjust accordingly. It was a constant game of chess.”

Through the MBA program at Western Kentucky, Marshall was able to have some life-changing experiences.

One opportunity he reflects on was the chance to join members of WKU’s EdD program on a trip to Lyon, France for an international business symposium, in which professors from around the world would teach three-day seminars on their particular areas of expertise.

“Not only was this my first time out of the country, it also provided a chance for me to get to know Dr. Randy Capps, who led the trip for WKU students,” Marshall said. “After the trip, Dr. Capps invited me to work with his consulting firm, Leadership Strategies Group, as an independent contractor. At first, I conducted 360-degree assessments and surveys in the manufacturing and healthcare industries. Then I began doing leadership training and leadership coaching for clients in manufacturing, healthcare, government and education. After a few years, I decided to start my own consulting business and that’s when things really began to take off.

His business, known as Amoeba Leader, has allowed Marshall to let his personality shine through, something that has helped him land bigger and longer contracts with clients than a more formal or traditional business approach.

Why Pursue a Ph.D.?

For Marshall, the success of his own business was satisfying, but while he enjoyed coaching, speaking and training leaders, he found himself emerging from the experience with more questions about leadership than he could answer on his own.

“The more questions that emerged, the more complicated they got, eventually surpassing my ability to answer them,” Marshall said. “Getting a Ph.D. was the logical next step to develop the necessary skills to answer my leadership questions.”

But beyond seeking an answer to his own questions, Marshall credits The PhD Project with planting the seed in his mind to pursue a Ph.D.

“They planted the initial seed with their persistent yellow postcards and, ultimately, I attended the annual conference in Chicago,” Marshall said. “Prior to that, I had never considered a Ph.D. My impression was that Ph.D. research consisted of working really hard to throw a little crumb into a pie dish, but nobody seemed concerned with making a pie. In other words, I wasn’t sure that I wanted to spend years of my life researching something hyper-specific if nobody was going to use it to affect actual change.”

Despite his preconceived notions, Marshall pressed forward, confident that attaining a Ph.D. would help answer his leadership questions. He earned a Ph.D. in Leadership and Organizational Science from Binghamton University, something he now views as the natural progression of the goals he had when he started his career in law enforcement.

“I started my career wanting to make the world a better place and that hasn’t changed,” Marshall said. “I was drawn to this because leadership and organizational science can be applied in nearly any domain because the topics are relevant in so many areas. Understanding leadership and organizational science make it possible to have a profound impact throughout society.”

These days, Marshall shares his expertise as an educator, working in Creighton University’s Heider College of Business as an Assistant Professor of Management. Working with young people has been a positive experience as he gets to tap into their enthusiasm and passion while simultaneously helping them overcome their greatest weakness, a lack of experience.

The PhD Project’s Annual Conference

Marshall cites the annual conference as a key moment in his career and it’s something he’s proud to have taken part in as a speaker over the years. This year, the conference is set to take place on March 24 and 25.

“The PhD Project changed my life,” he says. “The annual Chicago conference brings together students and faculty from various business disciplines to share their experiences with prospective Ph.D. students. The conference gives those students a sneak preview of the entire Ph.D. lifecycle including tips on how to prepare for the GMAT or GRE, 1-on-1 feedback sessions on Ph.D. application packets, insights into the different disciplines, first-year papers, comprehensive exams, dissertations, the job market and alternative pathways post-PhD.”

Additionally, dozens of highly rated business schools participate in a recruitment fair so prospective students can meet with university representatives to learn more about their particular programs.

Just as important, the conference introduces prospective students to The PhD Project family, a support network from the time someone is a prospective student all the way until they retire. There are student associations for each discipline to help students through each step of the doctoral journey.

One caveat, the conference is invitation only. To be considered, those interested in attending must hold a minimum of an undergraduate degree or be entering their senior year of college by the time they attend the conference. The PhD Project is a diversity initiative for Black/African American, Latinx/Hispanic American and Native Americans. The deadline for application is Feb. 12.

For more information, email Cristina Pazos at cpazos@kpmg.com

COVID-19 reared its ugly head, disproportionately impacting the economic, emotional and physical well-being of Black Americans. A recession followed, worsening the employment outlook for Black workers. 

Also in 2020, a wave of civil unrest rocked the nation triggered by the murder of George Floyd by a white police officer and the shootings of Ahmaud Arbery, Daunte Wright, Breanna Taylor and countless other Black individuals. 

“This series of events moves people. In fact, they continue to move people,” says Maurice Jones, CEO of OneTen. “Many folks began to ask the question that a lot of us had already asked and answered – is America as good as we think we are and as good as we can be? A handful of corporate CEOs answered that question. No, we’re not as good as we can be and the private sector can do something about it.”

The Founding of OneTen

Days after the murder of Floyd, a group of executives, including Ken Chenault, Chairman and Managing Director of General Catalyst and former Chairman and CEO of American Express and Ken Frazier, Merck’s Executive Chairman of the Board and former President and CEO, pledged to ‘do something about it.’

In December 2020, nearly 30 companies, including Merck, American Express, IBM, Target, and Whirlpool, founded OneTen. The goal of the coalition is to upskill, hire and promote one million Black Americans in ten years into family-sustaining jobs that provide opportunities for advancement. 

“We can do something about the disparities that are tearing this country apart,” says Jones. “The private sector can lead and where we should look is jobs because that’s what the private sector does better than anybody else.”

Almost one year later, OneTen is making progress toward improving the outlook for Black families for future generations.

“We effectively started in March of 2021. From March of 2021 to September of 2022, this coalition of now 70 plus companies hired and promoted over 73,000 Black workers that don’t have four-year degrees into family-sustaining jobs,” says Jones. “It is off to a robust start.”

Emphasis on Family-Sustaining Jobs

The median annual wage for Black workers is $10,000 lower than that of white workers, according to McKinsey & Company research. Blacks tend to be concentrated in low-wage jobs with less opportunity for advancement.

OneTen defines family-sustaining jobs as positions that don’t require a four-year college degree for a candidate to perform successfully and pay a wage that is sufficient to raise a family. Family-sustaining careers are in various industries, including healthcare, information technology and manufacturing. As of 2021, a family-sustaining wage ranges between $58,000 and $90,000 and more, depending on where you live. 

“The idea of opening up opportunity and creating generational change for folks that maybe wouldn’t have had those family-sustaining wage jobs, it changes the entire economic outlook of our country,” says Kelly Ryan Bailey, Head of Growth and Marketing at AdeptID. The software development company has partnered with OneTen to improve the hiring outcomes for Black talent with its technology. 

“From an organizational standpoint, we believe many people are being overlooked. A lot of companies could be more successful if they could see the true value, the hidden gems available out there,” says Bailey.

OneTen also categorizes family-sustaining jobs as ones that provide opportunities for advancement and have a low risk of being automated. While Black professionals are more likely to be ambitious than their white counterparts, they face high promotion gaps. In addition, Black people are overrepresented in 11 of the 30 jobs most at risk of automation. 

Removing Degree Requirements 

While a growing number of companies have been eliminating degree requirements because of the talent shortage, 75% of new jobs still require a bachelor’s degree. 

“Think about all that Black talent that is leaving HBCUs (Historically Black Colleges and Universities) every year,” says Keith Brown, Director of Community Impact at Randstad (No. 21 on DiversityInc’s 2022 Top 50 companies for Diversity list). “What is happening for those individuals who are three credits shy of a four-year college degree? What does their journey look like? How do they engage in the workforce and create opportunities for their families where they are productive members of society?”

Not having a college degree can hinder Black workers from certain positions and impact their earnings potential. Race-based pay inequities are significant contributors to the racial wealth gap. The average difference in net worth between white and Black families is $143,000. 

“All jobs that pay $40,000 or more, on paper, 71% of them require that you have a four-year degree just to compete for the job,” says Jones. “When you look at all Black talent ages 25 or more in the workforce today, 76% of us do not have a four-year degree. You have a systemic barrier in the form of a credential that keeps folks from earning their way into the middle class in America.”

Instead of using credentials when hiring and promoting workers, OneTen focuses on the competencies needed to succeed. 

“The whole point of OneTen is to create a skills-first culture among our hires and our employers where skills become the dominant factor of success across the entire talent journey,” says Jones. 

Partnerships in Action 

Being a partner employer with OneTen requires a ten-year commitment from a company’s CEO.

“What that means is they’re going to put jobs on the table that pay a family-sustaining wage and don’t require a four-year degree,” says Jones. “Secondly, they’re going to remove four-year degree requirements on jobs where they don’t need it to get the skills they’re looking for.”

Northrop Grumman (No. 20 on DiversityInc’s 2022 Top 50 companies for Diversity list) joined the OneTen coalition in 2021. The defense, aerospace and security company has pledged not only to train and hire Black workers but also to design educational and employment solutions to retain and advance underrepresented talent.

“We continue to invest and engage with trusted partners to grow and support a diverse talent pipeline,” said Melanie Heitkamp, Vice president, Talent at Northrop Grumman.   

Randstad is working with OneTen through its TRANSCEND initiative, which addresses the divide between skills and opportunities and prepares diverse talent for jobs in in-demand industries.

“When you think of it from the perspective of sourcing and screening minority talent into organizations, we recognize that being a talent-focused organization and client-centric was in direct alignment with our corporate social responsibility strategy,” says Brown. “Since we’ve joined the coalition, we’ve doubled-down on that effort.”

OneTen also partners with talent developers – organizations that provide Black talent with wraparound services to support their training and job transition. At the heart of OneTen is its Career Marketplace, which improves hiring outcomes for employers and connects Black talent with jobs, powered by AdeptID’s automated smart technology solutions.

“I am always careful to say this technology doesn’t solve every problem, but it is something that helps humans move faster,” says Bailey. “Once the technology runs through the OneTen eligibility for jobs on their career marketplace, there is a check from a human from the employer to agree or not agree to the options that AdeptID technology has offered them in terms of the appropriate jobs.”

OneTen supports the entire worker by filling gaps in services offered by employers and talent developers. Program participants are provided with need-based services for a limited time, including childcare assistance, financial literacy tips, mentoring support and transportation access.

Attracting and Retaining Black Talent 

Despite the best intentions, research has shown that many companies struggle to build diverse workforces. OneTen’s partner companies are asked to become a community of practice, where they share the best practices for recruiting, retaining and advancing Black talent. 

“When you take transferrable skills and incorporate the appropriate skilling apparatus to support that talent journey, those competencies will be well integrated and aligned for success for those individuals,” says Brown.

Partner companies can meet their OneTen goals in three ways: directly hiring Black talent through OneTen or another channel, upskilling and promoting Black talent within their organization into a family-sustaining job or referring partner suppliers and business partners to hire Black talent.

“We are so excited to see over 70 plus organizations across the country, the largest brands you can think of, then to be able to engage 100 plus talent development organizations,” says Brown. “Never before has talent acquisition been engaged with talent developers in this context.” 

Looking to the future, Jones says he sees the opportunity gap for Black workers improving. 

“The number of companies that understand that skills are better predictors of success on the job than credentials and experience and the number of companies understanding the business proposition and are attempting to build their muscles to be skills first cultures, I don’t think we’ve ever seen the movement of this volume in my lifetime,” he says. “I’m encouraged by what I’m seeing.”