Recapping a panel discussion with the experts
We advise life science companies in offering objective, practical, and fair practices that engage employees and reward progress toward the scientific and business strategy of the organization. This work is both art and science, heavily relational and important to creating a high performing organization.
One of the key challenges for HR teams is not only attracting but retaining top talent in a competitive environment. With talent being a core driver of scientific progress, organizations must ensure they build workplaces where the best minds want to stay and grow. A central piece of this puzzle is total rewards, and an increasingly significant component of total rewards is compensation transparency.
We convened a panel of life science HR executives, legal experts, and data scientists to discuss the topic of pay transparency and its impact on organizations. The following summary captures insights and recommendations for organizations to be prepared as pay transparency laws take effect.
Ann Darda, an accomplished people and culture leader and the managing director of Danforth’s HR consulting practice, led the panel discussion.
“Pay transparency makes the quality of compensation programs visible. If total rewards are approached with rigor, using accurate market data, and the internal pay assessment is disciplined, the increased visibility can bolster trust and act as a competitive advantage.”
Why Pay Transparency Matters
Pay transparency is more than just a legal requirement; it’s a step toward fostering a more equitable, inclusive, and engaged workforce. Suzanne W. King, partner at Pierce Atwood, and an experienced management-side employment lawyer for over 30 years, grounded the conversation.
“While pay discussions used to be taboo, today they are a focal point for many organizations. Understanding the legal framework surrounding pay transparency is crucial for ensuring that compensation processes are not just transparent, but also compliant with state-specific regulations.”
Life sciences companies, particularly those in early-stage development (Series A and Series B), have the most challenges with this transition. In an ideal world, employees would clearly understand how their compensation ties into their daily contributions and the organization’s broader goals. They would also recognize the potential upside of their success, tied to the company’s success. However, we’re not in that perfect world yet. There is still a significant gap between compensation philosophy and employees’ understanding of it. This is where HR teams need to step in to bridge that gap, especially as pay transparency laws add another layer of complexity.
Action Step 1: Legal Groundwork
Suzanne talked about the importance of understanding the legal framework surrounding pay transparency laws. For HR teams, the first step is to familiarize themselves with state-specific regulations. Massachusetts, for example, has anti-discrimination laws and an important pay equity law that must be considered as employers prepare for pay transparency. .
She also said that HR teams should work closely with legal experts to ensure their compensation structures are compliant with these legal obligations. Transparency is not just about posting salary ranges—it’s about ensuring the entire compensation process is lawful and rooted in fairness.
Action Step 2: Data-Driven Compensation Strategy
Zach Esrig, data scientist and head of CompGrid Biotech, a new compensation dataset specifically designed for Biotech and Life Sciences companies, highlighted the importance of data in building a robust pay transparency system. HR teams need to leverage data to create compensation packages that are both competitive and compliant. Tools like CompGrid can offer insights into industry-specific compensation trends, helping HR teams set salaries that attract top talent while staying within legal boundaries.
Creating data-driven compensation models also ensures that organizations can justify their pay structures in a transparent manner, which will be essential as employees gain more visibility into their peers’ earnings.
“HR teams need to leverage data-driven compensation tools to ensure transparency. It’s not just about meeting legal requirements—it’s about creating compensation packages that are competitive and justifiable, especially as employees gain more insight into pay across the board.”
Action Step 3: Transparent Communication with Employees
Finally, Janice Clements-Skelton, a senior HR consultant for Danforth, a strategic and hands-on human resources leader with more than 30 years of experience working with C-suite teams across the life sciences sector, emphasized the importance of communication. Once your pay structure is legally compliant and data-backed, it’s crucial to communicate this clearly to your employees.
HR teams need to develop comprehensive communication plans that explain the company’s compensation philosophy, how pay is determined, and how employees can grow their compensation over time. Transparency doesn’t stop at the paycheck—it’s about making sure employees understand the entire compensation journey.
“Transparent compensation is about more than just salary figures—it’s about giving employees a clear understanding of their potential growth. HR teams must communicate their compensation philosophy effectively, ensuring that employees feel informed and empowered.”
Conclusion
As pay transparency laws become more prominent, life science HR teams must stay ahead of the curve by ensuring compliance, leveraging data, and maintaining open communication with their employees. By taking a proactive approach, organizations can create fair, transparent workplaces that attract and retain top talent while complying with evolving laws.
This is more than a legal requirement; it’s an opportunity for companies to foster trust and engagement, ultimately leading to better performance and innovation.