This week, March 15, we saw Equal Pay Day come earlier than ever in its 26-year history – signifying a shrinking pay gap in the United States.
Equal Pay Day marks how many additional days women must work into a new year to earn what men made in the previous calendar year.
As business leaders work to tackle and overcome inequality and discrimination in the workplace, we are seeing the subject of compensation become more transparent.
Why Recognizing Equal Pay is Important
Equal pay is currently in high demand, as more than one third of employees feel their employers don’t pay fairly and 70% of Gen Z employees would consider switching jobs for increased pay transparency. Pay equity is a key approach in combating the timeworn differences in the way people are treated at work based on their gender, ethnicity, and other identifying factors.
What Does Pay Equity Mean Today?
In recent decades we have started to see the pay gap shrink, but it’s still a problem. In fact, women are still less likely to receive a pay raise or bonus for assuming more work responsibilities or changing roles. If business owners are working towards business longevity, it is their responsibility -and in their best interest- to take part and address pay injustice.
The way in which businesses approach pay equity matters. In many cases, leaders think it’s enough to implement pay equity policies amidst new hires but fail to address compensation with their existing employees. By turning a blind eye to any meager policies already in place, the issue will only compound until you start seeing the negative impacts on your company.
Closing Racial and Gender Wage Gaps
Leaders in charge of compensation decisions must have access to data to understand how they can achieve pay equity in their company and monitor progress.
Analyzing HR data within your organization is how business leaders can check whether their impact aligns with their intent.
Using the right tools to perform this kind of analysis can help you get better results. Our team at MCDA CCG helps match business leaders with the right solutions for their company, allowing them to access real time data to analyze pay within their company and identify any potential pay gaps, so they can be resolved faster.
Today’s New Employment Challenges
It’s possible that the pandemic has created some new challenges for employers striving for pay equity within their organization. With the dramatic increase in remote work, leaders may have a more difficult time tracking where their employees work – and the legal requirements that apply.
Regulations vary by location, with small differences from state to state. In addition to these differences, U.S. based businesses with employees in Canada must understand how Canada defines and evaluates pay equity differences than the U.S. In regard to pay equity, Canada has a very different framework.
Requirements and laws are ever changing, with new rules and reporting requirements emerging every year, companies are finding it increasingly difficult to keep up with compliance. This emphasizes the need for business leaders to prioritize where employees are located and understand what is legally required in each jurisdiction. This compounds the challenges and possible consequences if you are not in compliance with pay equity requirements.
The Future of Pay Equity
There is a growing movement in support of pay transparency, so much so that some places require employers to include salary ranges in job posting and other jurisdictions are considering similar legislation. This trend aligns with the increasing demands of job seekers to assess salary potential before sending in their applications.
This trend aligns with the growing demands of job seekers to evaluate salary potential before even applying to a job; it could help improve candidate engagement and possibly reduce candidate ghosting by allowing job seekers to clear that important hurdle before engaging with a potential employer.
Strong policies drive pay equity and intentional practices ensure its progress. Working towards pay equity the right way requires a comprehensive view across your entire organization, as it ties into nearly every HR incentive — including recruiting, retention and company culture — as well as diversity, equity and inclusion (DE&I) progress.
Whether you need help creating company policies, training programs or selecting and implementing data visualization tools, our team of business advisors will help you by providing solutions catered to the unique model of your business – rather than relying on generic quick fixes. Reach out to one of our MCDA CCG team members for a free consultation and we can walk you through how your business can support pay equity to retain your employees, strengthen your company culture and drive diversity, equity and inclusion (DEI) progress!
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