Introducing the Josh Bersin Definitive Guide to Pay Equity

Pay equity is a concept that has been part of the national conversation for at least half a century. In recent times, however, it has evolved to become somewhat of a buzzword. In practice though, it is a concept that strives for workers to receive equal pay for equal work, no matter what their personal attributes are.

Through both state and federal legislation, organizations in all 50 states need to address issues regarding pay equity in relation to gender, race, national origin, and other protected classes. Here at Salary.com, we have commissioned a Global Industry Report in collaboration with The Josh Bersin Company to produce The Definitive Guide to Pay Equity. Let’s begin by introducing to you what you can expect to see in the guide.

An Introduction to the Definitive Guide to Pay Equity

The pay equity study that is the foundation of The Definitive Guide to Pay Equity comprises 448 companies and their 24 management and HR practices. The study highlights how there has been a lack of progress in relation to pay equity within organizations. For example, 95% of companies in the survey aren’t demonstrating high maturity when it comes to pay equity.

This means that they are either ignoring the topic altogether (until legal action prompts them to react) or approach the concept as a sporadic project which aims to discover issues. Once these issues are discovered, many companies treat them as isolated incidents and dismiss them. As this is the case, it is common for organizations to stagnate in their pay equity practices and fail to progress or address any of the root causes.

The 5% of companies that excel enjoy the benefits that pay equity brings them. These benefits include higher profitability, enhanced customer satisfaction, as well as being a standout company in the market for job seekers. Below is a diagram that helps introduce you to the business impact of pay equity excellence.

Thinking Seriously About Pay Equity

In the current climate, businesses are struggling to adapt to a world with slow economic growth, high inflation, a tight labor market, and high levels of employee burnout. As a result, more organizations are turning to pay equity as a solution. This is due to the positive effect it has on employee engagement and retention levels.

As well as this, a “healthy organization” is fostered by making pay fair and equitable. In the research conducted, it was found that out of 91 organizational well-being processes, fair and equitable pay is the most impactful strategy. This means adjusting and evaluating management practices to make them equitable from the ground up.

When thinking seriously about pay equity, there are a number of variables to consider. To effectively tackle the concept, you must examine closely the basic framework of what work is in your organization. This means asking questions such as:

• What does it mean to do “equal work”?
• How do you know if people receive “equal pay”?
• What jobs are comparable?

This is just an example of a few questions you can ask - you can find more questions in the guide. Although challenging, it can lead you to have a clearer understanding of the ins and outs of your organization. As well as this, it can help you identify any areas needed for improvement.

The Difference Between Pay Gap and Pay Equity Analysis

When approaching pay equity, it is important to note that pay gap analysis and pay equity analysis are two different topics. To conduct a pay gap analysis, you need to have basic demographic and pay data that you can use to identify the raw, or unadjusted pay gap. A pay equity audit differs as it goes into individual issues which will help find any pay disparities and find ways to address them. You can see in the table below how they differ in more detail.

Does Pay Transparency Support Pay Equity?

To answer this question, it is useful to take a look at recently introduced pay transparency laws. In states such as California, Delaware, Massachusetts, and Oregon, it is unlawful for employers to ask about a candidate’s salary history. Doing this helps reduce pay inequities and instead puts everyone on a level playing field.

As well as this, several states have instituted pay transparency laws that mandate that salary ranges are shown on job postings and shared internally with other employees. Disclosing salary ranges like this enables employers to be transparent about salary from the start. Sharing job postings internally allows employees to see where they lie on the pay scale also.

Check Out ‘The Definitive Guide to Pay Equity’

The Definitive Guide to Pay Equity will equip you with all the knowledge you need to have a deep understanding of pay equity. Through what is outlined, you will be able to create a plan for achieving pay equity, identify what’s most important, assess your organization’s current pay equity situation, and define the actionable steps toward achieving excellence in pay equity.

Read more from this series:

• Definitive Guide to Pay Equity
• Pay Equity Framework
• Pay Equity Maturity Model
• 5 Key Findings of the Definitive Guide to Pay Equity