Custom Research: Pay Equity: A Look Inside the Different Viewpoints of Employers and Employees

Key Findings from the HR.com and Salary.com 2021 Viewpoint: Diversity, Equity and Inclusion

How employees feel about their company, colleagues, and their day-to-day work is a big factor in the success of that company. Employers often look to gauge their employees on a variety of issues. Has your boss asked you how does work make you feel? Has your company sponsored employee engagement surveys to ask you? What would you say about how your company, your job, your boss make you feel as a person?

Most organizations have some kind of technology or service to ask employees how they feel about what they do and how the company makes them feel. This can come in the form of pulse surveys or annual employee engagement surveys. HR.com and Salary.com got together to create a survey to ask both employees and HR professionals how they feel about diversity, equity and inclusion at their organizations. The perspective is a good comparison between employees and the HR people that help build culture and manage policies and programs intended to overcome bias and correct for issues arising around DE&I.

The study was conducted from March to June 2021 and collected 285 responses from HR professionals and 548 responses from employees. The participants were from a cross section of industry verticals and organizational sizes, ranging from small businesses with fewer than 50 people to enterprises with over 20,000 employees. More than 2/3 of the respondents are from organizations with at least 1,000 employees.

While the research focused on a variety of topics regarding diversity, equity and inclusion, many of the questions focused on how do people feel: about their company and about how they are treated. The research also focused on equity in pay. To read the full report, please click here.

The findings around pay equity were fascinating. Organizations where HR professionals have pay equity tools to detect internal pay gaps were more likely to say that they are being paid fairly and that their peers are paid fairly. They are also four times more likely to say that their organization pays equitably when it comes to race and ethnicity. And three times more likely to say that equitable pay is a top priority for executives. They are also twice as likely to say that they have a formal budget in place to close pay gaps. And they are also more likely to agree or strongly agree that employees in the organization can speak up if they find workplace discrimination.

So, the lesson seems to be that if formal tools are in place to focus on pay equity there is a perception, at least from HR, that their organization’s pay is equitable. It also creates an environment where the organization can talk about issues and work to solve problems around discrimination. This proactive and open approach is far more likely in these organizations than in those without formal tools in place.

As the saying goes, perception is reality and, when it comes to fair pay, the news isn’t great. It’s not surprising that only 53% of employees think they and their peers are paid equitably. It is surprising that only 57% of HR professionals feel their pay is equitable, though 66% say their peers are paid equitably. HR professionals may feel this way because they have access to pay data, much more so than employees do.

As far as a gender pay gap goes, HR professionals who are men are more likely than women to indicate that they feel that they are paid equitably, 67% to 56%. Now it's no shock that male employees feel that pay is equitable relative to women. It is notable that HR professionals who are women are less likely to agree or strongly agree that their organization pays equitably among different races and ethnicities.

When we look at perceived gaps in pay, 42% of employees think that their employer is not dedicated to finding and closing pay gaps. Men are more likely than women to say that their organization is dedicated to closing gaps by 66 to 47%. Forty-two percent is extremely high, indicating that employers will have to make some serious changes. Whether that’s making progress towards pay equity, or simply communicating more effectively about the efforts they do have in place. Employers need to gain employee trust around the issue of pay equity to both attract and retain the best talent.

When asked, 31% of employees and 17% of HR employees say they have “no idea” if pay equity is a top priority for executives. Even more fascinating, is that male HR professionals are nearly twice as likely than female HR professionals to say that equitable pay is a top executive priority (27% to 15%).

Budget size is an indicator of where an initiative lies on the priority list. In our survey, just 23% of HR professionals say that their organization has some form of formal budget in place to close pay gaps. This is obviously concerning since HR professionals need that kind of support in order to be able to close those gaps. It stands to reason then that only 33% of HR professional respondents agree or strongly agree that their organization has adequate pay equity tools to find and remediate pay gaps and inequities.

We know that there are many priorities as companies look to 2022. From retaining and attracting employees during the “Great Resignation” to addressing inflation issues, HR will be facing lot of pressure when it comes to compensation management, as they try to keep managers from overspending.

The reality, though, is that pay equity is a problem for an entire organization, not just HR. It demands clear leadership from the board and C-suite, adequate tools, and a dedicated budget. Together, the elements will provide employees with a pathway to understanding that their organization believes in them.

For full details on the HR.com and Salary.com study, click here.

To learn more about Salary.com’s Pay Equity Suite, visit www.salary.com/pay-equity.