The CHRO’s Checklist: Preparing for Pay Legislation in CA

Whether required by law or demanded by workers, pay transparency is no longer an option for U.S. employers, especially those with employees in California, where pay transparency laws go into effect on January 1, 2023. With similar regulations beginning to gain traction nationwide, business leaders are urged to start implementing pay transparency best practices now.

In the most recent episode of High Growth Matters, we are joined by California resident Gianna Driver. She serves as Chief Human Resources Officer (CHRO) and generously shares her experiences and lessons learned as she has worked to prepare Exabeam for the upcoming pay legislation.

This blog has been adapted from that conversation and covers:

• Cultivating excitement for pay transparency
• How to prepare for pay legislation implementation
• Preparing your leaders to answer tough questions
• Compensation software and comp tools to help

Don’t miss the full episode: The CHRO’s Checklist: Preparing for Pay Transparency in CA

Pay transparency — exciting, and something to prepare for

With pay transparency regulation enforcement in California quickly approaching, many businesses are unsure how to move toward compliance. Some are nervous about the upcoming challenges, but many are excited, including Gianna.

“The purpose behind pay legislation is to ensure accountability and pay equity,” she says. “In a world where there is still a disparity between similarly qualified folks, pay legislation are wonderful ways to help organizations and leaders be accountable.”

A world where pay transparency is promoted and enforced is incredibly exciting, especially in regard to attaining equity. But, unfortunately, achieving true transparency is no easy task.

Fortunately, experts like Gianna Baker are willing to share their experiences, triumphs and challenges in their preparation to help guide other HR professionals and business leaders forward. These are some of the guiding principles and practices that Gianna helped implement at Exabeam.

The CHRO's preparation checklist:

Education beyond leadership

Education is key to pay transparency and can’t be limited to leadership and management. At Exabeam, there is a heavy focus on content and materials preparation aimed at employee training and education.

In light of impending pay legislation, organizations will have to start publishing salary ranges — without proper context-setting regarding those ranges, current employees may become confused or upset.

“It's super important that we're preparing our leaders with content, information and materials, so they can authentically engage in those conversations,” Gianna says. “Many factors go into pay, and not everyone is in the same situation.”

Foster passion, interest and dedication

According to Gianna, achieving compliance and, ultimately, pay transparency is much easier when employees and leaders are passionate about the topic and foundational values.

“I have found that when the board is focused and passionate about something, it really helps the leaders and organizations take that topic seriously,” she says. “At Exabeam, the board is equally passionate about pay equity, diversity, inclusion and belonging.”

One way to foster this passion and interest is to provide frequent updates and information regarding the business’s progress around these significant efforts. Don’t be afraid to produce roadmaps, statistics and plans and share them with employees.

Ensure top-down championship with appropriate strategy

When an organization is in a start-up phase, or just beyond, it is easier to rely on a single board to guide company practices and decisions. However, when an organization grows, and more layers are added to the hierarchy, there is an increasing need for specialized committee subsets.

According to Gianna, Exabeam’s Compensation Committee has been instrumental in their journey towards pay transparency.

“The Comp Committee is a subset of the board tasked with overseeing the organization's compensation and total rewards practices. It's an accountability arm,” she says.

Finding a committee structure or strategy that fits your business needs can greatly ease the strain of establishing consistency across all compensation, from base pay to incentive and variable pay.

Focus on condition-setting

According to Gianna, there are a few guiding principles to keep in mind when moving toward compliance. While she cites being communicative, proactive and working with honesty and integrity as prerequisites for achievement, she says condition-setting is a vital next step.

“Whenever you’re looking to institute a new program, it has to be anchored in something,” Gianna says. “At Exabeam, we anchor pay transparency programs and education programs in a global leveling project.”

Creating a framework defining job architecture and hierarchy can establish pay transparency as part of an organization’s culture. Business leaders can define benchmarks and provide information that determines exactly why an employee is placed where they are within a salary range.

Beyond the benefits of condition-setting concerning pay transparency, it can also clarify career pathway development, retention, culture development and employee satisfaction.

To learn about all the tips, tricks and practices that have driven Gianna’s team forward, listen to the latest episode of High Growth Matters.

What to do with tough questions (and when CHROs need to consult experts)

In many situations, publishing salary ranges will result in difficult conversations as current employees may wonder why they aren’t placed at the mid-upper part of a range. Enabling leaders to address tough questions thoughtfully can mean the difference between satisfaction and resentment.

At Exabeam, Gianna and other HR leaders have created mandatory training and education programs that utilize workshops, content, presentations and role-playing exercises. These sessions explain where the organization is currently with pay transparency efforts and where leaders can go for more information. They also inform employees about existing pay ranges and explain their meaning.

Gianna and her team also provide training on how HR business partners should answer questions. “There is a train-the-trainer model as well,” she says.

Finally, Exabeam has incorporated a Compensation and Total Rewards team as the ultimate go-to.

“They're the experts for any sort of true curveball difficult questions,” Gianna says. “They really do the heavy lifting and play a critical role in ensuring equitable practices.”

If you enjoyed this post, you’d appreciate our conversation, where we take a deep dive into the topics covered here today and beyond. Take a moment to listen to the full High Growth Matters episode. If you like what you hear, please consider leaving us a rating and bookmarking the podcast to be notified each time we publish a new episode. 

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