Discussions about pay equity have become more prominent in recent years, as there is growing awareness of the gender pay gap and other forms of pay inequity.
If your employees haven’t started asking more about pay, best believe they might come asking soon. It’s essential to prepare to answer these questions to avoid raising eyebrows.
Digging The Roots: Gender Wage Gap Still Exists
According to the Pew Research Center, women in the United States earn 82 cents for every dollar men earn in 2022. This rate hadn’t changed much when women earned 80 cents on the dollar in 2002, indicating slow progress in closing the pay disparities.¹
Earlier this year, the U.S. Bureau of Labor Statistics (BLS) released data to give a breakdown of median income to salary and wage workers. The researchers found that for most full-time employees, the median weekly earnings were $1,059.
Women’s median earnings were $958, or 83% of men’s earnings.² Due to these differences, governments and organizations are intensifying their efforts to close race and gender wage pay through transparency.
Pay Transparency Trends Will Continue To Grow
In 2023, pay equity laws are poised to play a crucial role in eliminating pay inequity in the American workforce. These laws have been designed to promote greater pay equity by mandating that employers reveal the pay range they are willing to offer for a given role.
The ultimate goal of such transparency is to provide employees with the tools they need to negotiate fair pay, thereby reducing pay gaps that disproportionately affect women and minorities. Several states, including New York, California, and Washington, have adopted the wage transparency legislation.
The trend is projected to continue as there are legislation drafts in South Carolina, Massachusetts, and other jurisdictions. According to a recent survey by WTW, approximately 17% of businesses are voluntarily revealing pay range details, and at least 62% of employers are planning to disclose pay rate information in the coming days.³
Aside from the benefits reported to come with wage transparency, such as an increase in the number of candidate applications, 38% of businesses that revealed their pay rates are experiencing a growth in queries from their current employees, and 27% are witnessing a rise in questions from potential candidates.
How to Address Employee Concerns About Pay Equity
In today’s world, DEI is critical to maintaining a healthy and thriving work culture. However, you need to ensure that the company’s pay practices align with these values and be proactive about it.
1. Conduct a pay equity audit.
To be one step ahead, conduct a pay equity audit to identify any pay disparities within the company. A pay equity analysis or audit should review job descriptions, employee qualifications, years of experience, performance evaluations, and other relevant factors to determine if there are any disparities based on race, gender, or other factors.
Once the audit is complete, the data can provide the insight you need to make necessary adjustments to ensure that employees are paid fairly and equitably.
2. Develop a culture of transparency.
Transparency is essential when it comes to compensation practices. Rather than being defensive, be open and honest with employees about how their salaries are determined, what factors are considered, and what opportunities exist for advancement and pay increases.
Employees should have access to the information they need to understand how their pay compares to others in the company and what steps they can take to improve their earnings.
3. Foster open communication.
Some state regulations regarding wage transparency mandate that employers disclose salary ranges for job postings, transfer opportunities, or promotions. While in some states, employers are only required to disclose such information upon a candidate’s request.
Either way, employees are bound to come looking for answers upon pay disclosure. Allow them to express themselves. You can also be proactive by gathering feedback anonymously or organizing one-on-one meetings.
These should be used to identify areas for improvement and create action plans that address employee concerns.
4. Establish a clear pay equity policy.
To reinforce your effort, there should be policies and procedures outlining the company’s commitment to paying employees fairly and equitably. The company policy should include guidelines for determining compensation, performance evaluations, promotions, and other factors that impact pay.
It should also establish a process for employees to raise concerns about pay equity and a commitment to address those concerns promptly.
5. Equip yourself with fundamental knowledge.
Pay transparency laws tend to differ from state to state. You should research and review the ones applicable to your region and industry. It helps you avoid any legal issues by ensuring that you’re compliant.
6. Hiring managers and HR staff should be duly trained.
This is to ensure that compensation decisions are fair and unbiased. The training should include information on conducting performance evaluations and setting compensation levels.
Common Questions Employees Have About Pay Equity and Sample Answers
Here are the top three questions employees tend to ask about fair pay structures:
1. What is a salary range, and how is it used?
A salary range is the minimum or maximum compensation companies are willing to offer for a particular job position. It’s a benchmark that helps determine the appropriate compensation for an employee based on experience, skills, and performance.
The goal is to provide a fair and reasonable compensation package equivalent to an employee’s talent. So when establishing salary ranges, companies should consider various external and internal factors such as industry standards, job responsibilities, geographic location, and budget constraints.
This provides a framework for setting expectations for every employee or potential candidate.
2. How is my pay determined?
Pay is based on various factors that all play a role in determining one’s compensation. Consider job responsibilities, skills, experience, and qualifications required for the role and the current market rates of the position. All these factors come together to create a fair and competitive wage for employees.
Job market and industry standards are constantly changing, so reviewing and adjusting pay scales ensures that every employee is fairly compensated for their hard work and dedication.
Ensure that your compensation packages reflect the value you place on your employees and their contributions to the company.
3. Why don’t I make as much money as my peers?
Understand their concerns about your compensation and be open to communication.
Every employee’s situation is unique, and you should strive to compensate everyone equally based on their contributions while also taking their experience, performance, and the responsibilities of the role into account. If you can, try revisiting their background to see if anything has been overlooked.
You can also meet with HR, who can provide more insight into the factors considered in determining their salary.
PARTNER WITH ACS PROFESSIONAL STAFFING TO ENSURE EQUITY IN PAY STRUCTURES
As much as you’re trying to invest in a culture of transparency, working with a staffing partner that understands how pay equity works makes the job much easier.
This is where ACS Professional Staffing can help you. Here, we put business needs at the frontline and help companies attract the best candidates through a transparent recruitment process.
You’re one click away from achieving your hiring goals. Contact us today to learn more about how we can help.
1. Pew Research Center. “The Enduring Grip of the Gender Pay Gap.” Pew Research Center, 1 Mar. 2023, https://www.pewresearch.org/social-trends/2023/03/01/the-enduring-grip-of-the-gender-pay-gap/.
2. “Median earnings for women in 2022 were 83.0 percent of the median for men.” U.S. Bureau of Labor Statistics, 25 Jan. 2023, https://www.bls.gov/opub/ted/2023/median-earnings-for-women-in-2022-were-83-0-percent-of-the-median-for-men.htm.
3. “More North American organizations plan to disclose pay information, survey finds.” GlobeNewswire, 14 Sept. 2022, https://www.globenewswire.com/news-release/2022/09/14/2516203/0/en/More-North-American-organizations-plan-to-disclose-pay-information-survey-finds.html?tpcc=nlcfodaily.