Is Your Company Reputation at Risk Without Pay Equity?

Over the past decade, we’ve seen movements such as Black Lives Matter and #MeToo. People want justice for George Floyd. Others are revolting about the unaffordability of housing and demanding an increase in the national minimum wage. We are witnessing a huge push for equality in society, and businesses should be conscious of this.

Clutch conducted a survey and found that 68% of customers value social responsibility as the most important attribute when supporting a company. SurveyMonkey surveyed consumers of which 73% said pay equity and fair labor practices are extremely important to them. Furthermore, 53% said they’d pay more for a product that supports their social values. You can start to see how pay equity is vital for a company’s reputation.

The Financial Impact of Pay Equity

According to the Level Playing Field Institute, the cost of losing and replacing more than 2 million American workers each year due to unfair treatment and discrimination is $64 billion. This coupled with lost productivity, employee mistrust, and a damaged reputation, the financial burden can be exponential.

Additionally, you can drain time and resources resolving pay discrimination complaints. It could even lead to issues with the Equal Employment Opportunity Commission (EEOC) and legal complications. This will no doubt be in the public eye, wreaking public relations havoc. In turn, it becomes difficult to retain and attract talent, creating even greater financial burdens down the line.

How Pay Equity Impacts Company Reputation

Let’s face it, you can find anything on the internet. That includes honest reviews about your company and what it’s like working there. And they may not always be good ones. When you’re not treating your employees equally, don’t be surprised if this information surfaces on the web for others to see. Would you apply for a job if you’ve read about pay disparities between men and women at that company?

If a discrimination lawsuit does surface, this will be public knowledge. Depending on the size and influence of your company, word could spread very quickly. Take the recent FIFA World Cup in Qatar. What overshadowed excitement about soccer was the reported discrimination, wage theft, and other human rights abuse.

For the success of any company, it’s vital to paint the right picture. How you’re seen externally directly impacts your consumer base and the candidates you attract. When you’re not sending the right message, you tarnish your reputation.

Fostering a Culture of Fairness

With more access to data and the tools to calculate a role’s market value, ensuring your company pays fairly can be the difference between you being an employer of choice or not. Fostering a culture of fairness is the right thing to do and it’s crucial for business success.

Consider what will make your employees feel most appreciated at work. Though it’s hard to please everyone, some expectations are universal. People want to know they can speak up and that they will be heard. You may not even realize that you’ve offended or upset someone until they bring it up. Encourage open communication so that when issues do arise, your employees feel like addressing them will end productively, not negatively.

It's also important to celebrate your employees. Acknowledge outstanding performance in front of the whole team. This method will reinforce the capabilities of all your employees, regardless of their gender, ethnicity, or age to encourage a supportive team mentality. You should also practice empathy when some workers are at a disadvantage. Fostering a fair workplace will reflect well on your reputation.

Tips for Establishing & Maintaining Pay Equity

Are you worried about how your pay practices can reflect on your company? If so, it isn’t all gloom and doom. Acknowledge what you need to change and act on it. If not, great! You may find our tips on how to maintain pay equity useful regardless.

Research is a fundamental step in achieving pay equity. You must understand how comparable positions are paid on the market. You could also use tools such as Salary.com’s CompAnalyst to create pay ranges based on your specific industry and location.

Auditing your pay practices regularly is essential. This process involves evaluating salaries, bonuses, promotions, job descriptions, and even hiring practices. By doing so, you can address any gaps that arise before they become issues.

Employee feedback is a great way of receiving perspectives on fairness right from the source. Conducting anonymous surveys will welcome honest feedback on specific jobs and the whole organization. Consider this information when adjusting pay practices.

Take Home Message

At the end of the day, pay equity is important for several reasons, both for the employees and the employer.

Hannah Williams, founder Salary Transparency Street, said in an interview with CNN Business, “Salary transparency is everything. The lack of transparency right now and gatekeeping makes it so easy for people in corporate to take advantage of women, minorities, and people with disabilities. It just leaves that door wide open.” However, as employees gain more confidence, fewer employers will be able to get away with this.

When your pay practices aren’t fair, you’re jeopardizing your reputation. Rather than tarnishing how people view your company and losing consumers because of it, take control and do what’s right. Pay equity should be part of your company branding. Building a culture of fairness and transparency isn’t a chore, it’s a tool.