The importance of pay transparency

Recent research has revealed that Canadian women are typically earning up to $3.79 less than their male colleagues per hour, [1] and this has raised many questions for employees across all industry sectors. Discrepancies based on race have also been identified. In franchising, it is important to lead the way in demonstrating pay transparency and pay equality.

This is important not only because the franchise industry is such a large employer but because it is the right thing to do. It is time to start the awkward conversations, normalize pay transparency and have open and honest conversations about salaries to ensure that all workers are being fairly compensated for the work they do and that gender, age and race have no part in skewing peoples' incomes.


Why pay transparency is important

It is unfair and wrong for people who do the same job to earn different salaries based on their gender. Employees understand that colleagues with greater levels of experience may earn more than they do, but when the salary disparity relates purely to age, sex or race, it becomes discrimination.

Pay transparency is also beneficial for businesses to benchmark their salaries against those of their competition, ensuring that their staff are fairly compensated and that their earnings are in line with industry norms.

Pay transparency also helps staff to bargain more effectively during salary negotiations as they know what the average salary is and can make an effective case for why they feel they should earn more.

The 2021 Pay Equity Act requires all employers in federally regulated sectors with a workforce of greater than 10 employees to identify and correct any pay disparities. Although franchising is regulated at the provincial level rather than the federal level, it makes sense to adhere to these standards wherever possible.


How to be transparent about pay and salaries

The first thing to do is review existing staff salaries and identify any disparities that are unrelated to skill set, experience level or time served and correct them.

Second, all new job postings should include the salary or expected salary range that the role will attract.

Finally, it is essential that employees are not penalized for talking about or comparing their salaries. An open and honest culture must be encouraged as this will ultimately improve staff satisfaction and could even reduce rates of attrition.