Benefits and Compensation, HR Management & Compliance

Companies Are Reviewing Pay Structures

The conversation about pay parity, encouraged by the entertainment industry, appears to have impacted other industries as well.

“Several female performers have come forward to reveal that their male colleagues and co-stars made, in some cases, significantly more money for the same work. This disparity is not limited to the entertainment industry by any stretch. Employers in all industries at companies of all sizes are examining their compensation structures to ensure their workers are being paid fairly for their contributions, regardless of sex,” said Andrew Challenger, vice president of global outplacement and executive coaching firm Challenger, Gray & Christmas.

Survey Shows

A survey of 150 human resources executives, conducted by the Challenger firm in January, which includes companies of all sizes in various industries across the United States, finds 48 percent of companies are reviewing their compensation policies to guarantee pay parity, focusing on gender due to the recent #MeToo and #TimesUp movements.

Another 17 percent are not reviewing their policies, while 28 percent say they are already paying male and female workers equally.

Wage Gap

In releasing its survey findings, the Challenger firm cites research from the Institute for Women’s Policy Research, which finds, on average, women in the United States earn 80 cents for every dollar that men earn. This number can be even lower in certain industries and for women of color.

Yet, the Challenger firm recognizes that there is controversy surrounding the figure.

What makes the wage gap so controversial is that the idea of equal opportunity is ingrained deeply in American culture, the firm says. People who believe the wage gap is a myth argue that women are not being paid less than men, but rather women are choosing to enter lower-paying careers and prioritizing family over career aspirations. In addition, they point out that in some positions, women make more than men.

“Most importantly, regardless of whether or not the wage gap exists in any measurable form, companies, employees, and managers should do everything they can to make sure that equal work means equal pay across the board,” said Challenger.

Ensuring Pay Parity

One way companies could ensure pay parity is by implementing salary transparency, allowing workers to see what their colleagues and superiors make. In a survey conducted by Challenger, Gray & Christmas in November 2014, 55 percent of human resources executives indicated that companies should practice salary transparency in some form – either full salary transparency or providing a range of compensation for each position for workers to review.

However, despite the desire for salary transparency, only 3 percent of companies surveyed in January 2018 execute salary transparency, allowing employees to view compensation ranges for each position. Ninety percent of companies do not implement any kind of salary transparency, while 7 percent provide salary information on a need-to-know basis.

“If salary transparency is not an available avenue, other tactics can help ensure employers are creating cultures that value pay parity. These include regularly reviewing job descriptions, making pay parity a priority on the Board and C-Suite level, or engaging a third party to analyze compensation structures,” said Challenger.

Salary transparency may not be popular, but 31 percent of survey respondents recommend engaging outside counsel to audit compensation structures.

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