Pay Bias Hurts Hiring, but Many Companies Lack a Strategy
Three in four companies have conducted a pay equity analysis that uncovered wage discrimination.
Nearly half of businesses acknowledge that their approach to pay equity hurts their ability to attract talent. Nevertheless, one-third do not have a pay equity strategy in place, and 54 percent doubt that their company complies with global standards.
The 2024 Pay Equity Report from compensation platform beqom surveyed salary and compensation decision-makers in the United States and the United Kingdom to compare how companies approach pay equity.
“Our survey shows employers grapple with addressing wage discrepancies and promoting fair compensation,” said Tanya Jansen, the company’s co-founder and chief marketing officer. “They understand the urgency in confronting wage gaps but find themselves navigating a complex web of regulatory requirements and stakeholder demands.”
Research found that employers struggle with compliance complexities, particularly at the global level. Nearly three-quarters of employers said they have analyzed their compensation strategies and shared existing gender pay gap statistics with employees and/or external stakeholders, yet just 41 percent are aware of global pay equity standards.
Strategies for dealing with pay equity and transparency are also mixed. Most employers are at least looking at pay equity and discovering underlying problems. Three in four companies have conducted a pay equity analysis that uncovered wage discrimination (64%), promotion disparities (57%), below-market salary ranges (54%), pay compression (53%), gender pay gaps (48%), and other issues.
The encouraging news is that many companies are taking positive steps to close existing gaps and foster transparency, including:
- Listing salary ranges within new job descriptions (81%).
- Increasing salaries because of inflation and economic standard of living costs (68%).
- Implementing a process for continuous feedback (67%).
- Increasing pay to correct existing pay gaps and salary inconsistencies (65%).
- Providing a clear structure for bonuses and performance review processes (65%).
- Increasing salaries based on performance (65%).
- Implementing companywide performance review processes (62%).
- Offering more resources to help employees better understand their total compensation (61%).
- Making executive pay visible and public knowledge (47%).
- Disclosing the pay ratio for executive officers and median employees (29%).
“As the job market becomes more competitive, pay equity and transparency are crucial differentiators,” Jansen said. “Our report revealed that there is still significant ground to cover. However, the progress, effort, and positive energy around pay equity integration are encouraging signs. Employers have myriad opportunities to demonstrate their commitment, unlocking and retaining talent. By understanding the job landscape trends and pay equity practices, organizations will be able to shape effective strategies that will benefit both the worker and long-term business goals.”
From: BenefitsPRO