Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Firm Uses Salary Transparency to Close the Gap
Transcript
- Lucas: Luna, I want to start with a number that stopped me cold: the median woman working in tech in 2025 earned eighty-two cents for every dollar a man earned. For Black women, it was sixty-three cents. We've been talking about this gap for decades, and the needle has barely moved. Luna: Right. And every few years a new study comes out and everyone says 'we need to fix this.' But what does fixing actually look like in practice? Lucas: Exactly. So today I want to look at one company that tried a pretty radical approach: full salary transparency. Not just posting ranges on job listings, but making every single employee's pay band visible to everyone in the company. No secrets. Luna: That sounds terrifying to most HR departments. How did it actually play out? Lucas: Well, the company is called EquiPay Solutions—mid-sized, about eight hundred employees, based in Denver. They rolled out a three-part system starting in early 2024. First: every role has a public pay band with a minimum and maximum. Second: starting salary is set by experience tier, not by negotiation. They call it 'no haggle pricing' for compensation. Third: they do an annual pay equity audit and share the results—the actual numbers—with all employees. Luna: No negotiation? That's a big shift. So if you're a great negotiator, you can't get more than someone who's less assertive? Lucas: Exactly the point. Research has shown over and over that negotiation tends to favor men and white candidates. Women are less likely to initiate salary negotiations, and when they do, they're often penalized for it. By removing negotiation entirely, EquiPay hoped to remove that source of bias. Luna: But doesn't that also cap high performers? Someone who's really exceptional might feel undervalued if they can't negotiate above the band. Lucas: That's a fair concern. What EquiPay did was build in a performance-based bonus system that's also transparent—everyone knows the bonus formula. So base pay is standardized, but total compensation can still vary based on performance. And they argued that the trade-off—less individual variance in base pay for more systemic fairness—was worth it. Luna: Okay, so they rolled this out. What happened? Did people quit? Did the pay gap actually close? Lucas: So here's the data they released in early 2026. When they started, the combined gender and race pay gap was about twelve percent. After eighteen months of full transparency, it dropped to under two percent. That's not perfect, but it's a dramatic shift. And turnover actually decreased slightly—they lost fewer women and people of color than before. Luna: Huh. I would have expected some backlash. People who were being paid above the band might have felt exposed. Lucas: There were some uncomfortable conversations. A few senior engineers who had historically negotiated higher salaries saw that newer hires in the same band were close to them. But EquiPay handled that by grandparenting existing salaries—nobody's pay was cut. And they found that once the initial awkwardness passed, trust actually increased. Employees reported feeling like the system was fair, even if they personally weren't at the top of the band. Luna: So transparency didn't cause the chaos that many leaders fear. It actually built trust. Lucas: That's the headline, yes. And it lines up with broader research. A 2023 study from the Journal of Applied Psychology found that pay transparency reduces the gender pay gap by about twenty percent, and it doesn't hurt job satisfaction—in fact, it often improves it. Luna: But I imagine not every company can just flip a switch on transparency. What are the prerequisites? You need accurate job classifications, you need to have already addressed any major pay inequities before you publish the bands, otherwise you're just broadcasting your own bias. Lucas: Absolutely. EquiPay spent nine months cleaning up their data before going public. They had to standardize job titles—they had like forty different titles for basically the same engineering role. They also ran a preliminary pay equity audit and made adjustments before anyone saw the bands. So transparency was the final step, not the first. Luna: And what about companies that can't afford to raise everyone's pay to close gaps? That preliminary adjustment can be expensive. Lucas: It's a real barrier. EquiPay spent roughly one point two million dollars on those adjustments. But they framed it as a long-term investment in retention and fairness. And they're a profitable company, so they could absorb it. For a startup or a small business, that might be harder. But there are ways to phase it in—for example, starting with new hires and promotions, and adjusting current employees over a couple of years. Luna: One thing I wonder about is the effect on external hiring. If you publish your pay bands publicly, you might lose some negotiating leverage with candidates who are used to haggling. But I guess the trade-off is you attract candidates who value transparency. Lucas: Right. And EquiPay found that their applicant pool actually became more diverse. They got more applications from women and people of color, presumably because those groups were more confident they'd be treated fairly. So it's a recruitment advantage in competitive markets. Luna: Let me push back a little. Some economists argue that transparency can actually lead to lower overall pay because it reduces information asymmetry that employees can exploit. If everyone knows the band, no one gets a premium for being a great negotiator. So total labor costs might go down, which is great for the company, but maybe not for the highest performers. Lucas: That's a valid point. And there's some evidence that in highly transparent systems, top performers may need to rely more on bonuses or promotions to differentiate themselves. EquiPay's response was to make sure bonuses were generous and tied clearly to measurable outcomes. They also created a faster promotion cycle for high achievers—so rather than fighting for a raise within the band, you compete to move into a higher band. Luna: That makes sense. It shifts the competition from negotiation to performance and career development, which is arguably more fair. Lucas: Exactly. And it aligns with DEI goals because performance metrics, if designed well, can be more objective than negotiation skills. Of course, performance metrics themselves can have bias, so you have to be careful. EquiPay uses a combination of manager reviews, peer reviews, and objective output data. Luna: So what's the bottom line for our listeners? If someone is in a position to influence compensation policy at their company, what's the first step they should take? Lucas: I'd say start with the data. You can't fix what you don't measure. Run a pay equity audit—there are now several affordable tools and consultants that do this. Then identify the biggest gaps and make a plan to close them over time. Then consider introducing salary ranges in job postings, which is already legally required in several states. Full internal transparency might be a step two or three. Luna: And for individual employees listening? What can you do if your company isn't transparent? Lucas: You can ask. Some states have laws that protect your right to ask about pay ranges. You can also use sites like Levels.fyi or Glassdoor to research market rates. And if you're considering a job change, prioritize companies that are transparent about compensation—it's a signal of broader cultural values. Luna: You know, talking about this reminds me why we do this show. We spend a lot of time on concrete strategies that actually move the needle on equity. And I think that's valuable. Lucas: I agree. And it's also why we keep the show ad-free—so we can focus on what works, without any sponsor pushing a product that may or may not help. If you find this kind of practical conversation useful and want to support that independence, there's a simple way: buy me a coffee dot com slash fexingo. That's all lowercase, buy me a coffee dot com slash fexingo. It helps us keep doing the research and talking to companies like EquiPay. Luna: Yeah, every little bit helps. It's a small gesture that lets us stay focused on the content, not the commercials. Anyway, back to EquiPay—one final thought. I think the most surprising takeaway is that transparency actually made people happier. That's not what the skeptics predicted. Lucas: Right. The fear is always that transparency will breed resentment. But what EquiPay found, and what other studies show, is that most people care more about fairness than about being at the top. If the system is transparent and seems fair, they're satisfied even if they're not the highest paid. That's a powerful insight for any leader. Luna: And for the rest of us, it's a reminder that we can advocate for transparency without being naive about the challenges. The data is clear: it works. Lucas: Exactly. So if you're listening and you want to push for pay transparency at your company, start with the audit. And if you want more episodes like this, you know where to find us. Until next time. Luna: Take care, everyone.