In an earlier blog during this, Women’s History Month, we talked about the benefits of transparency and equal pay—for employer brand and recruiting, for retention and motivation, and for meeting legal requirements. So they’re important.
But even if companies have the will to practice equal pay, do they have the means? What will it take to make pay equity happen? We explore this and provide an easy self-assessment.
Are we heading in the right direction?
A perception gap, or just a gap? Nearly all of the HR professionals we talk to say their companies are committed to pay equity and are taking steps to ensure it. Yet if you ask employees, 51% do not know or do not believe their employers or managers are serious about closing the gender pay gap. So maybe there is an opportunity for improved communication, or maybe stronger actions are required.
No help from COVID. While pay gap consciousness among employers and employees is high, and progress in pay equity has been made over the past 50 years, the momentum towards remediating the gap has taken a hit due to COVID-19. beqom’s 2021 Compensation and Culture Report revealed that nearly a fifth (18%) of employees said pay gaps within their company have increased during the pandemic.
Shifting pandemic priorities. Data from the Confederation of British Industry (CBI) indicates that HR has had to change its focus since the start of the pandemic. In 2019, the CBI/Pertemps Employment Trends Survey showed that 70% of companies were acting to improve gender diversity and reduce the gender pay gap. In the 2020 survey, just under three in five big companies (57%) had increased their focus on gender pay throughout the last 12 months. By 2021, improving gender equality was a DE&I goal for just 33% of companies, while 67% were focused on health and well-being.
A setback for women. The shift in priorities is understandable in the context of the pandemic, still, one could also argue that pay equity is more important now than ever, since women workers were hit disproportionately hard by the crisis. Women make up the majority of the workforce in the sectors that were most affected: retail, childcare, and hospitality. And some research suggests that the gender pay gap will actually widen by 5% due to the pandemic.
What to do?
Fortunately, the technology exists to uncover and fix pay inequities. The first step is to analyze and assess the pay equity situation at your company, not always an easy task in a large organization.
The International Labour Organization (ILO) suggests approaches for closing the gender pay gap, and one key step is “Undertaking a gender pay review in the enterprise to assess whether there is a gender pay gap and to what extent.” That is easier said than done. To do such as assessment requires the ability to:
- Gather and centralize employee & benchmark data
- Establish comparable peer groups
- Identify outliers with automated scoring
- Generate remedial compensation budgets
- Find the root cause with predictive analytics
- Apply AI/ML to predict and prevent future gaps
Are you ready and able?
Making equal pay a reality requires having the systems, tools, and practices that support the needed analysis and remediation. Does your organization have the necessary capabilities to ensure pay equity? Take our short Pay Equity Capability Assessment to find out.