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Pay equity analysis needs to be integrated as a key process of the rewards function. 4: Pay equity requires an ongoing commitmentĬlosing pay gaps can’t be an ad-hoc initiative. The bigger the organization and its payroll, and the wider the gaps, the faster that cost is accelerating. In short, it probably won’t ever be cheaper than it is now to address this element of pay equity.įor a typical large company, that cost is growing by as much as $500,000 a year.
#HYPE EQUITY FULL#
“Ten years ago, that 7.4% figure was a full percentage point lower, and ten years from now, it will be close to 10%,” says Krasniewska. 3: It will never be cheaper to achieve role-to-role pay equity than it is today “HR owns this gap and has an obligation to close it before it becomes a serious problem for the organization,” says Krasniewska. This is the role-to-role gap, which HR leaders can resolve with rewards structures. The remaining gap - 7.4% - can be directly ascribed to gender. However, that number doesn’t reflect only pay discrimination: 9% is attributable to choice of occupation 6% to organizational factors like size, industry, or geography and 5% to human capital factors like differences in education and experience. That’s even more than the 20% that is generally reported. Our research shows the average organization’s gender pay equity gap is 27% - that means the average pay for male employees is 27% higher than for women. As workforces become more diverse, organizations become increasingly vulnerable to pay inequities. By that time, women will make up almost 50% of the EU labor force. labor force will be comprised of women and racial and ethnic minorities. 2: Compensation can’t fix everything, but is responsible for a very real partīy 2027, almost 60% of the U.S. “Role-to-role gaps are clearly something compensation leaders can and should address.” No. “HR can’t directly and immediately control environmental factors, although they can collaborate more broadly to influence them,” says Gartner HR advisory leader Anna M Krasniewska. Examples are long-term systemic workforce trends such as the concentration of women in certain lower-paying occupations and industries, and the cumulative effect motherhood can have on careers.Ī role-to-role gender pay gap - like male nurses earning more than female nurses - can be targeted through compensation practices. One is the group-to-group pay difference, which stems from environmental factors other than gender or race. While ‘pay equity’ is used as a catch-all term, there are actually two types of pay gaps. Here are five things most companies don’t realize about the pay-equity issue. “ Role-to-role gaps are clearly something compensation leaders can and should address”
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#HYPE EQUITY HOW TO#
To succeed, it’s important for organizations to know what they can control and how to target their efforts for comprehensive and sustained progress on pay equity.
#HYPE EQUITY DRIVERS#
As the pressure for pay equity rises, HR leaders are key drivers of a comprehensive, orchestrated response. The credibility issue is well-founded: only 28% of organizations are confident that they have closed pay gaps between employees performing similar work (role-to-role pay gaps). While pay discrimination based on gender has long been illegal in many major markets, pay gaps remain - and Gartner research shows only one in seven employees believe their organization is making a credible effort to close them.
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These are just a few of the women who have sued their employers over pay inequity. A service center manager at Citicorp, the principal flautist at the Boston Symphony and fourteen partners at major New York law firm Chadbourne & Parke.