42% Of Employees Say Their Employer Is Not Dedicated To Closing Pay Gaps

• The 2021 Viewpoint: Diversity, Equity & Inclusion report found that almost half of employees do not think their employer is prioritizing closing the pay gap.  
• The report also found that while HR professionals report pay equity issues more often, employees are more likely to suffer consequences when reporting these issues.  
• Fair pay practices are not just an important corporate value or a tool for managing compliance risk, but they’re key to talent attraction and retention.  

42% of employees do not think their employer is dedicated to closing pay gaps, according to the 2021 Viewpoint: Diversity, Equity & Inclusion, a new survey by Salary.com and the HR.com Research Institute.  

The research provides insights on views of HR executives vs. those of employees to help understand the state of diversity, equity, and inclusion in the workplace. 

The report also found HR pros and employees are not on the same page when it comes to pay equity:  

• Only half of surveyed employees (53%) say they are paid equitably or believe their peers are 
• A larger proportion of HR professionals (66%) believe their peers are paid equitably 
• HR professionals and employees are more aligned when it comes to how leadership prioritizes equitable pay: only 17% and 18%, respectively, say it is a top priority among the executives in their organization 

“Pay equity is a fundamental element of the employer-employee relationship, yet 42% of employees surveyed say their employer is not dedicated to closing pay gaps,” said Lenna Turner, Director of Diversity, Equity and Inclusion and a Compensation Consultant at Salary.com. 

Addressing Pay Equity 

HR respondents (57%) suggest they are more likely to report pay equity issues, which is far more than employees (37%). This may be because HR has more access to the training and the workforce data necessary to uncover discrepancies in pay.  

While HR professionals report pay equity issues more often, employees are more likely to suffer consequences when reporting these issues (44% vs. 17%).  

Budget Breakdown 

Fewer than one-quarter of HR professionals say their organization has a formal budget allocated to closing pay gaps. This lack of budget could be the reason why just 33% of HR professionals agree or strongly agree that their organization has the proper tools to detect internal pay gaps. 

HR professionals who say their organization’s pay equity tools successfully detect internal pay gaps and inequity are more likely to: 

• Say they themselves and their peers are paid equitably 
• Have pay equity among different ethnicities/races 
• Make equitable pay a top priority among executives 
• Have a formal budget allocated to closing pay gaps 
• Have employees speak up if they witness or experience workplace discrimination 
• Have DE&I initiatives that are adequately staffed, funded and measured 
• Say their organization celebrates diversity 

An audit is a critical tool that can give employers the information they need to identify pay disparities and opportunities to improve equity. Through an audit, an employer can determine if discrepancies can be explained by legitimate, nondiscriminatory reasons. 

Pay differences generally can be based on seniority, education, job-specific experience, and other legitimate business reasons, but when pay differences cannot be explained, the audit provides an employer with the opportunity to correct the issue. 

“In the wake of the pandemic, it’s even more critical that management and their employees see eye to eye when it comes to diversity, equity, and inclusion. Employees value these issues immensely but are not seeing their companies do enough work in this area,” said Debbie McGrath, Chief Instigator and CEO of HR.com. 

These discrepancies might be a factor contributing to the Great Resignation  

After months of disruption and uncertainty, many workers are considering leaving their positions in a trend that’s been termed the “Great Resignation.”

The U.S. Bureau of Labor Statistics announced that a record-breaking 4.3 million Americans quit their jobs in August. The Great Resignation can be seen across virtually all industries. 

One study found that 41% of the global workforce would consider leaving their current employer within the next year. 

Businesses in future will need to provide workers with more autonomy, purpose, equity, and flexibility (along with better pay and benefits) if those businesses wish to attract and retain top talent.

If HR is not willing to fix pay gaps, employees will find work elsewhere that fits their needs better.  

Pay equity will attract top talent

Fair pay practices are not just an important corporate value or a tool for managing compliance risk. Creating and communicating about fair pay practices is also a core strategy to develop a vibrant, high-performing, engaged workforce, which can potentially help to minimize competition in this current labor market.  

To accomplish this, HR leaders can: 

• Take a close look at employee total compensation, including both base and incentive pay, to identify any pay gaps 
• Utilize industry benchmarks as a point of comparison to determine how best to address any issues 
• Examine recruiting practices and guidelines given to those in hiring positions to negotiate salary and incentives for new hires 
• Properly train managers who are responsible for performance reviews and associated pay increases on equitable pay practices 
• Update HR technology to better monitor and analyze total compensation and track against organizational goals for gender pay equity 
• Broadly communicate to managers and associates company policies on equitable pay practices to ensure transparency, according to Workforce.com 

By ensuring employees are paid equitably, employers can increase efficiency, creativity and productivity by helping to attract the best employees, reduce turnover and increase commitment to the organization,” Cheryl Pinarchick, an attorney with Fisher Phillips told SHRM.