Desire for Fair and Equal Pay Bridges Gaps

Compensation can be a complicated issue, but one thing is clear: people want to be paid fairly for the work they do. Pay equity, regardless of political party, gender, race or other demographic characteristic, has become a major issue for employers and employees alike. 

A recent survey from Willis Towers Watson found that only half of employees believe they are paid fairly compared with workers who hold similar jobs, both within and outside their own companies. Only 52 percent of companies have a formal process in place to ensure there is a fair distribution of compensation, according to a separate survey from Willis Towers Watson. 

Apparently, a lot of people are left with questions about the fairness of their compensation, and among women, this could have something to do with the oft-cited "gender pay gap." When comparing average pay levels as of 2015, women earn 80 cents for every dollar earned by men in the U.S, according to a report from the American Association of University Women. At the current rate of progress, the AAUW estimates that pay equity between the genders will not be reached until 2152. 

However, legislation at the state level may help speed things along, such as pay equity laws recently passed in California, New York and Massachusetts. The Massachusetts law bans asking for salary history information during a job interview, protects the right of employees to discuss their salaries, and requires equal pay for comparable work. 

Pay equity is an issue that has support across different political groups and demographics, according to Lisa Maatz, AAUW’s Vice President of Government Relations and Advocacy. Pay equity seems to be less partisan at the state level, and it seems likely that "states will continue to press on with pay equity legislation," Maatz said. 

Sarah Fleisch Fink of the National Partnership for Women & Families also sees broadening support. "There is really a growing consensus among employers, employees, the public, that there is a pay gap issue," she told Bloomberg BNA. 

But it’s not a simple problem with an easy fix. "We know the reasons are complicated, and the solutions to reduce and eliminate the gap are multifaceted," Fink said. 

Abolishing salary history inquiries from hiring employers can help to eradicate one of the root causes of pay inequity, according to Pam Jeffords, partner at Mercer and contributor to the Mercer report, "When Women Thrive," which covers research about women in the workplace. "The pay history perpetuates the situation because you inherit the pay equity issue that the prior company had," she told Bloomberg BNA. 

Greater pay transparency is another solution to closing pay gaps. "The more transparency there is, the more pay equity there is for everyone," said Maatz. Even if companies require a certain level of secrecy for competitive reasons, they can opt to reveal pay bands, she said. 

Transparency also happens to be something that’s desired and accepted by a growing number of employees, particularly younger workers. 

"As the workforce changes, companies have to adapt their structure because millennials will not see the same boundaries. We could see companies disclosing pay beyond the basic requirements on their own, to attract millennials and be more competitive," Adeola Adele, ‎Employee Practices Liability Product Leader and Cyber Thought Leader at Willis Towers Watson, told Bloomberg BNA. 

If transparency gives workers a better understanding of the total rewards picture and how their pay correlates with what they do, it can also lead to increased engagement and retention, according to Nancy Romanyshn, rewards consultant, Talent & Rewards at Willis Towers Watson. 

"Employees are asking for more pay transparency and what goes into pay decisions. It becomes an opportunity for employers to look at programs, to make sure rewards are effective and drive business," Romanyshn said. 

She added that organizations need to define job descriptions, responsibilities and competencies to set fair pay levels. Even though rapidly changing roles can make the task difficult, it is well worth the effort to document jobs and competencies, whether it is to avoid litigation or to engage employees and retain valuable talent, she said.

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