Workers doubt employers' commitments to closing pay gaps

Dive Brief:

Close to half of employees surveyed by Salary.com and the HR.com Research Institute — 42% — said they do not think their employer is dedicated to closing pay gaps, according to a Nov. 2 report.
HR and employees may not agree regarding company treatment of pay equity; while 66% of HR professionals surveyed believe their peers are paid equitably, only 53% of surveyed employees said the same.
However, 57% of HR professionals said they are likely to report pay equity issues, compared to only 37% of employees. Notably, employees surveyed said they were more likely to suffer consequences of reporting pay equity issues compared to HR professionals.

Dive Insight:

Pay equity has come into the spotlight in recent years, prompting more organizations to say they conduct pay parity reviews to counteract pay disparities unrelated to job differences, a Society for Human Resource Management report showed earlier this month. Pay equity reviews also bolster trust in HR departments, the report showed, and organizational transparency about pay practices can boost trust overall.

To get there, employers may need to begin with a pay audit, experts previously explained to HR Dive. This audit should look across roles, demographics and locations to ensure any egregious errors can be corrected immediately. Managers and supervisors should also be trained to ensure they manage performance and compensation reviews fairly, experts said.

Perhaps one of the most important tools in an employer’s toolkit is pay transparency, various surveys and reports have shown. Many forms of pay equity training are "fix-the-women" initiatives, focusing on negotiation skills, but a December 2020 working paper published by the National Bureau of Economic Research concluded that "differences are less pronounced when it is clear that something is negotiable and what the bargaining range is" and that "ambiguity amplifies the difference." In essence, employers that are upfront about salary ranges and compensation tend to have lessened pay disparities, the paper noted.

Notably, women in revenue-facing roles — typically positions that can lead to the C-suite — said in a March report by Women in Revenue that pay transparency is a desirable perk that could keep them in their jobs. Pay transparency, as well as mentorship programs and improved work-life balance, all could keep women in such roles long term, the report said, and improve company metrics regarding diverse leadership in the long run.