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Study: Employers miss the mark on pay equity

22 Sep 2022 11:14 AM | Bill Brewer (Administrator)

A Black person with tattoos types on a tablet in the office

Many equal-pay-for-equal-work initiatives focus on women, but it’s so much more complex than that, the research notes.

Published Sept. 22, 2022 by Caroline Colvin

Three out of four executives said they consider pay equity to be a “moderate” or “high” strategic priority; 7 in 10 workers said they feel that compensation is also an “important” priority for their organizations, a UKG report published Sept. 19 suggested. 

But within that same pool of 453 corporate executives and 3,005 employees of all ranks, half of employers and 38% of employees admitted that their company did not have a pay equity program.

In comparison, about a quarter of employers and a quarter of employees could point to “a well-established program” in place. The remaining respondents said they had just started a program or that it was “ineffective,” and 24% of employees told UKG that they didn’t know either way.

This study, done in partnership with the Harvard Business Review Analytic Services, takes the temperature of prevailing approaches to equity strategy. It also emphasizes the importance of intersectionality. 

Many equal-pay-for-equal-work initiatives have been tailored to women — something UKG reconfirms in its study — but the phenomenon of pay disparities is much more complex than gender discrimination. It’s “an intersectional issue that cuts across race, color, and sexual orientation,” the report said.

UKG surveyed employers generally and, specifically, employers of efficient, well-established equity programs (called “leaders” by UKG) regarding which social groups were the focus of their pay initiatives. Both groups were aligned on tackling the gender pay gap and racial inequities in compensation. Employers — as opposed to those deemed leaders— lagged behind in creating pay programs that included the LGBTQ community, workers with disabilities, people over 50 years old and religious minorities.

In the report, Brian K. Reaves, UKG’s executive vice president and chief belonging, diversity and equity officer, pointed out that gender-based pay discrimination has been illegal for decades. Still, the pay gap “widens even further when you look at intersectionality such as Black, transgender, and immigrant women.”

A factor that is often glossed over was the culture of silence around salary and compensation. Overall, 34% of workers surveyed told UKG that silence is a “major obstacle” to implementing equal pay. Black, Hispanic and Latinx were twice as likely as White workers to remain silent, researchers observed. Asian-American employees were also more likely than White workers to remain silent.

In turn, workers of colors feel like they are most in need of help: 35% of Black employees, 26% of Asian Americans, and 20% of Hispanic and Latinx workers told UKG that racial discrimination factored in whether they had opportunities for advancement. This rings true even at the baseline, where 32% of Black and 25% of Asian, Hispanic, and Latinx employees said that racial discrimination factored into their salaries or hourly rates. Salary negotiation abilities were also a pain point, causing workers of color more distress than their White peers.

Researchers said the task of attaining equity “requires a deeper examination of varying perspectives and a more granular look at pay data.” While no one-size-fits-all equity fix exists, UKG’s solution recommends doubling down on collecting demographic data on compensation. Specifically, researchers suggested employee pulse surveys — “an opportunity to collect ongoing, anonymous feedback to help organizations know how their people feel” — as an option.

“Business intelligence and analytics tools that rely on data also allow organizations to see where inequities exist, so they can ensure fairness throughout the employee lifecycle,” researchers said in the press release.

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Source: HR Dive

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