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Show Them The Money - Why Salary Cloaking Must End In The Nonprofit Sector

By simply adding a salary to your job advertisements you are helping tackle pay gaps, inequity and catalyzing social mobility.

When you buy a new house, you’ll likely go to a real estate aggregator like Zillow or Redfin, enter your search parameters (which will be primarily determined by your budget) and then identify which homes you might want to tour.


The price for the home is listed which will help you decide whether you want the house or can afford the mortgage at that price, and sellers in most states are mandated to make a disclosure statement should anything be wrong with the home.


This is a transparent process front loaded to avoid wasting everyone’s time or seeing deals fall through. It would be odd to enter into escrow without having an understanding as to the cost of the house or a figure agreed to in principle.


So why is the process different for individuals searching for jobs?


Job hunting and hiring has changed dramatically over the past 20 years. Jobs will find the right person now via algorithms and the ability to share opportunities with your peers happens in real time across direct messaging and social media apps (imagine having to clip out a newspaper ad and mail it to someone!). And with that, the advantages that employers had long held in recruitment and contract negotiation are being eroded at a scale in which unions could never have imagined.


The power is now beginning to shift towards a new workforce demanding flexible working schedules, working for those that actively espouse the values of a positive corporate social responsibility and that they now have unique access to insights on workplace culture via websites such as Glassdoor.


Couple this with the fact that workers change jobs several times in their career rather than remain with the one company and companies need to do a lot more to attract and retain talent while forcing internal reflection and action on their own issues and limitations.


Right now, we are in a unique period of history where all the pieces are in place to turn the table upside down and  set out on the path to real pay equity and wage fairness.


But then again that’s the corporate angle, yet one in which the nonprofit sector can draw up the blueprints.


So how can the nonprofit sector begin to take the lead and tackle this challenge especially when wages are traditionally low in the first place? Well, it’s complicated, and structural, but within immediate reach if there is a genuine long-term commitment to addressing it.


Firstly do the internal work and review your own structures;


Policies & Procedures


I previously worked in a role where 6 of the 8 employees were Director level or above and the only people of color were the two folks that weren’t. This wasn’t by design, it was an organization that was fiercely committed to social justice and equitable philanthropic practices, it was just that the organization grew quickly and there were difficulties in identifying people for what were very much emerging, niche roles. Policies were put in place to make hiring practices more inclusive – words used in position descriptions, equivalent experience vis a vis educational requirements and actively identifying and expanding networks of which to share the opportunity including black and hispanic chambers of commerce, urban leadership groups etc.


So that lies the question, over time, has your organization’s structures, policies and procedures evolved or become dated?


Job Descriptions


This also relates to the organizational chart. Are there too many levels of management? Do employees know their pathways for career growth within the team?


Many staff are not set-up for long term success at nonprofits due to a lack of planning by leadership who often hire folks at the top of their bands or create titles that enable little growth or the ability to develop essential management skills beyond the scope of their day to day duties – including managing staff.


This should be articulated before new staff are hired to set expectations.


Job standardization, realignment and a potential reorganization (with a commitment to no layoffs if necessary) should occur at this point too if positions have similar duties and/or are skewed because of tenure or scale. This includes eliminating irrelevant requirements such as lifting 25lbs, having a driver’s licence for office roles and for all that is good in this world, the line stating ‘other duties as assigned’.


Compensation


Once positions have been finalized a thorough review of remuneration must occur with appropriate salary ranges established and linked to CPI increases, with associated budgeting taking into account baseline merit increases.


This should be shared with each staff member in a way where they understand where they are, where they can go and most importantly how they can get there.


New staff should be placed on the first rung on the ladder and cause to be shown if they are to be placed at the mid-point. If there isn’t room for promotions in the short to mid-term then at the very least they should be afforded yearly pay increases rather than be trapped at the top of the band.


Pay Audits


Once the structures are in place to ensure people are remunerated adequately and fairly, with their growth a key focal point of the organization’s values, then one final step must occur and that is related to current pay gaps and equity.

  1. Ensure salary ratios between your highest and lowest earners are within acceptable industry standards.

  2. Review current salaries, identify where gaps may exist between individuals doing the same job and then correct that issue. Bring all pay up to the highest level not bring people down to the median.

  3. Ensure labor laws are not being violated with contract, per diem and part-time workers and that interns are remunerated. Wage theft is a common practice for low wage and undocumented immigrant workers and has no place in the social sector.

  4. Repeat annually.

Pay gaps and pay equity are different in this regard and your board would be well served by understanding the nuance. If you are leading this charge ensure that the narrative is that this review is to tackle organizational disparities across gender and race in line with the mission and values of the organization.


Once your own house is in order, it’s time to go out and find that perfect candidate, and you will, if you jettison some of the practices that have long plagued the sector and seen generations of workers have their earning capacity diminish over their lifetime. And to think that’s not even including the larger effects that broader social and economic factors have had in reducing the earnings of women and people of colors over the same time.

So what are those next steps?


Salary Cloaking


This is the simple first step in making fair and equal pay a reality for the sector.

Salary cloaking is the process of posting a job without the salary range and one that brings with it a plethora of other problems and compounding effects of which we have simplified below:

  1. It perpetuates the wage gap – I think we covered this one but it’s important to note that salaries in the nonprofit sector are already lower to begin with.

  2. It discriminates – women and people of color are more likely to opt out of applying for roles as they don’t think they meet the requirements.

  3. It’s deceitful – it’s important to build trust with a prospective employee, not go through the process, have them get emotionally attached to the role and then leverage this connection to have them consider a situation they would not have begun if they knew of the salary range in the first place. A great remedy to this and to ensure this situation doesn’t happen vice versa is to reaffirm the salary and benefits package prior to them moving forward in the hiring process. There’s a reason it’s called cloaking – the very definition means to hide, cover or disguise and while it might not be on purpose, it certainly can’t be justified as a budgetary constraint.

  4. It’s a complete waste of time – why spend time reviewing resumes, organizing and participating in interviews and running background references just to reach an easily avoidable impasse in salary expectations.

  5. It’s expensive – as above, time is also money.

Salary History


Asking for someone’s salary history has now been banned in 18 states and a number of cities and for good reason as it can result in pay discrimination, shifting the negotiating power into the employers hands. This must be expanded nationally.


Past income shouldn’t matter, and these new state laws effectively stop the practices of tying salary offers to past earnings. As we mentioned before, having set salary ranges for each position and sharing it in job ads will effectively mean people are paid for their experience and qualifications. It allows upward mobility and higher lifetime earning potential, meaning a happier and more motivated workforce – critical components for nonprofit retention.

Some states have also prohibited employers from taking disciplinary action against employees that have shared or discussed pay with their coworkers, another step forward in important worker protections.


So what action can you take?


Firstly, just do it. Just add your salary to your job descriptions and advertisements. It’s free. If you feel that your salary is too low for the role you are seeking then either don’t post it or realign the skills accordingly, maybe even taking a chance on someone who doesn’t quite meet the requirements but has a high ceiling and would benefit from your organizations investment in them.


Find Your Champions


We would definitely encourage individuals, nonprofit, membership organizations and representative bodies to reach out to elected officials and unions to schedule a meeting to discuss these items. Find your legislative champion and help move it forward by rallying the sector behind the cause.


Establish Industry Watchdogs


Nonprofit Associations, University’s that focus on nonprofit research or another publicly funded entity would be wise to steward this discussion, act as a knowledge broker for advocacy efforts and play watchdog for a new era of salary transparency. Current sector wide salary reports are not nuanced enough to tell the real story with larger entities skewing salary range estimates for certain positions.


Instead, this watchdog should aggregate and annually report out on advertised salaries and create a bot that routinely responds via social media should a job be advertised with no salary included.


Job Boards


Make the salary a required field for those wishing to advertise their role.


A Shared Onus on Grantmakers


Organized philanthropy could do a number of things here in regards to supporting this practice. Firstly advocating for salary cloaking and prohibiting the disclosure of salary history across all levels of government and secondly weaving this into their funding contracts.

Should grants be project based and have the hiring of new staff as part of the budget projections, then this should be reviewed to ensure that the salary is fair and reasonable for the work outlined and the caveat that any advertising of this role include the salary.


As Dumbledore once said, “I don’t need a cloak to become invisible” 


Many people feel invisible and that their experiences and skills are not marketable. This is a false assumption and one historically entrenched in parts of our society that has been exploited in small ways to maximize profits, stretch budgets, of which have ultimately left folks leaving hundreds of thousands of dollars in lost earnings on the table.


Closing the pay gap and unraveling the compounding issues of pay inequities (remember, there is a difference!) are all within reach if we have the energy to make smart, pragmatic changes. It’s a generational commitment that can be identified from an individual’s first day of work, so let’s support their upward trajectory and the economic benefits to our society that come with it.

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