Signs Gender Pay Gap and Broad Pay Equity Analyses are Becoming Standard Practice
Organizations are making significant inroads into pay equity initiatives, according to results from the Pay Equity Practices and Priorities Survey by WorldatWork, the leading nonprofit professional association in compensation and Total Rewards and the producer of October is Pay Equity Month. The survey assessed the current state of pay equity-related work, and the degree to which the focus within organizations is expanding beyond pay to other areas that may contribute to unintended inequities, such as workforce representation, benefits programming and culture.
- Gender and broader analyses. Gender pay gap (79%) and broad pay equity analyses (71%) are becoming standard practice for organizations, with remediation strategy execution (55%) and remediation option evaluation (52%) following close behind; 9% of organizations do not have gender pay gap analysis on their radar.
- Recruitment and hiring practices. Addressed (or anticipated to be addressed) at one point between 2018-2020 or receiving regular attention in relation to pay equity work: recruitment practices (88%), individual pay determination decisions (83%), hiring practices (83%), diversity and inclusion programs (82%), selection practices (81%).
- Other areas of examination for potential bias or factors in pay disparities. To identify or reduce potential biases, organizations are looking on an ongoing basis at market data (73%); performance management practices (69%); health care, well-being and retirement benefits (58%); paid time off and flexibility benefits (55%); and dependent/elder care benefits (35%).
“This survey and the ‘Pay Equity Practices Survey of C-Suite and Reward Leaders’ conducted earlier this year confirm what has become increasingly apparent — pay equity is one of the single fastest growing topics the HR profession has seen in decades,” said Scott Cawood, president & CEO, WorldatWork. “It’s not just about salary, though. Organizations are expanding their understanding of areas where potential bias or gaps may exist and they are working to address issues linked to the concerns around any personal attribute being used in any process that ultimately impacts salary, including hiring, promotion, and feedback systems.” For example, while the survey reveals positive movement towards pay equity remediation, benefits programs are receiving the least amount of attention when looking for potential biases that may contribute to pay disparities. Understanding of how benefits programming can skew to attract or serve one group over another is beginning to emerge.
“The finding about performance management practices is intriguing,” said Cawood. “One-third (32%) of organizations are not looking at performance management practices in the context of pay equity, despite the often subjective nature of those programs. The level of scrutiny for all pay-related systems will only increase in the next few years. In the future, performance management programs will have to adhere to updated frameworks in order to be bias-free. We know, anecdotally, that organizations that do look at performance management in the pay equity context are experimenting with removing many pay practices to prevent or reduce bias.”