Equal Pay Day was observed this week, March 15, for the first time in its 26-year history, signaling a narrowing of the pay gap in the United States.
Equal Pay Day commemorates the number of additional days that women must work in a new year to earn what men earned the previous year.
We are seeing the subject of compensation become more transparent as business leaders work to combat and overcome workplace inequality and discrimination.
Why Is It Important to Recognize Equal Pay?
Equal pay is in high demand right now, with more than a third of employees believing their employers aren’t paying them fairly and 70% of Gen Z employees willing to switch jobs for more pay transparency. Pay equity is a critical strategy for addressing long-standing disparities in how people are treated at work based on their gender, ethnicity, and other identifying characteristics.
What Does Today’s Pay Equity Mean?
Although the pay gap has narrowed in recent decades, it remains a problem. Women are still less likely than men to receive a pay raise or bonus for taking on more responsibilities or changing roles. If business owners want to ensure their company’s long-term viability, it is their responsibility – and in their best interests – to participate in and address pay inequity.
It’s important to consider how businesses approach to pay equity. Many leaders believe it is sufficient to implement pay equity policies for new hires but neglect to address compensation for existing employees. By turning a blind eye to any rudimentary policies already in place, the problem will only get worse until you start to see negative consequences.
Read How to Get Employees To Work Together.
Closing Wage Gaps by Race and Gender
Compensation decision-makers must have access to data in order to understand how to achieve pay equity in their organization and track progress.
Business leaders can check whether their impact matches their intent by analyzing HR data within their organization.
When performing this type of analysis, having the right tools can help you get better results. Our team at MCDA CCG assists business leaders in finding the right solutions for their company, allowing them to access real-time data to analyze pay within their organization and identify potential pay gaps, allowing them to resolve them more quickly.
The New Employment Challenges of Today
It’s possible that the pandemic has posed new challenges for employers attempting to achieve pay equity in their workplace. Leaders may find it more difficult to track where their employees work – and the legal requirements that apply – as the number of remote workers grows.
Regulations differ by location, with minor differences between states. In addition to these differences, U.S.-based companies with Canadian employees must understand how Canada defines and evaluates pay equity differences in comparison to the United States. In terms of pay equity, Canada has a completely different system.
Companies are finding it increasingly difficult to keep up with changing requirements and laws, with new rules and reporting requirements emerging every year. This emphasizes the importance of business leaders prioritizing employee locations and understanding the legal requirements in each jurisdiction. This adds to the difficulties and potential consequences of failing to comply with pay equity regulations.
Pay Equity in the Future
Pay transparency is becoming more popular, to the point where some jurisdictions now require employers to include salary ranges in job postings, and others are considering similar legislation. This trend corresponds to job seekers’ increasing desire to assess salary potential before submitting their applications.
This trend coincides with job seekers’ increasing desire to assess salary potential before applying for a position; it has the potential to improve candidate engagement and possibly reduce candidate ghosting by allowing job seekers to clear that important hurdle before engaging with a potential employer.
Last Thoughts
Pay equity is driven by strong policies, and intentional practices ensure that it is achieved. Working toward pay equity the right way necessitates a holistic view of your entire organization, as it is linked to nearly every HR incentive, including recruiting, retention, and company culture, as well as DE&I progress.
Whether you need assistance developing company policies, training programs, or selecting and implementing data visualization tools, our team of business advisors will assist you by tailoring solutions to your specific business model rather than relying on generic quick fixes. For a free consultation, contact one of our MCDA CCG team members, and we’ll walk you through how your company can support pay equity to retain employees, strengthen company culture, and advance diversity, equity, and inclusion (DEI) progress!
Learn more from business and read 5 Ways To Make Your Employee Selection Process More Effective.
