07 Sep Gain a Competitive Advantage with Pay Equity
Barely a day goes by without some mention of pay equity.
Whether it’s in the news or in a briefing from your legal firm or HR society, there is quite a buzz about pay equity – and for good reason:
- The National Women’s Law Center (NWLC) published a report based on the most recent U.S. Census Bureau data showing that women earn 80 cents for every dollar paid to their male counterparts across 97% of occupations. The report finds the wage gap is due in part to the fact that women are overrepresented in low-wage jobs and underrepresented in high-wage jobs. But even when comparing women and men in the same occupations, the report finds women are still paid less than men doing the same jobs in nearly every sector of work
- An April 2016 congressional report of the Joint Economic Committee concluded that women working full-time earn $10,800 less per year than a man (based on median annual earnings). Over a career, this adds up to $430,000 for white women, $877,000 for African-American women, and over $1 million for Latina women
- The World Economic Forum’s 2017 Global Gender Gap Report stated that at the current rate of progress, it will take 61 years to close the gender pay gap in Western Europe, 161 years in East Asia and 168 years in North America
Equitable pay is good business
Pay inequities exist, and they are not just a legal issue – there are compelling business reasons for paying employees equitably:
- 34% of employees are not engaged and cite fair pay as the top reason for lack of engagement (Quantum Workplace, State of Employee Engagement study)
- In a 2017 Glassdoor study, 67% of US employees said they would NOT apply for jobs at employers where they believe a gender pay gap exists
- A Gallup study concluded that organizations with high employee engagement have 4.3X higher growth rates than organizations with low employee engagement
- According to Deloitte, gender-diverse companies are 15% more likely to outperform national industry medians, and ethnically-diverse companies are 35% more likely to outperform national industry medians
Now is the time to address pay inequities in your workplace. If employees perceive a pay gap, regardless of whether their perceptions are correct, there is a 16% decrease in intent to stay – according to Gartner, that’s 50% worse than the typical impact of a pay freeze.
Organizations can gain a competitive advantage by getting in front of pay equity perceptions and potential morale, retention, and even legal issues by conducting a pay equity analysis. Once an analysis is conducted, organizations can be transparent by communicating with employees about any pay gaps and what they are doing to alleviate the pay gaps. To truly close pay gaps, organizations can analyze their pay practices to ensure pay is administered fairly. Organizations can also look at their talent management programs to ensure they are promoting diversity.
Gain a competitive advantage by acting now
People are inclined to work for and with companies focused on achieving pay equity. Taking action and communicating this internally can boost morale and engagement. Communicating externally can drive more business your way. Contact Compensation Works today for a free consultation!