How Pay Transparency Builds an Inclusive Culture
By Association for Diversity in Financial Talent
More than one in four Americans believe employers should embrace the concept of pay transparency within job postings, and 61% are more likely to apply for positions when salary ranges are listed, according to a survey conducted by cloud compensation software provider Beqom.
Currently, the pay gap between men and women remains despite political efforts and public interest to address it. Polls show most of the public feel there should be a national law supporting gender pay gap figures.
As of January 2022, it is estimated women still earn approximately 19% less than men but that’s not true for companies that embrace pay transparency. Companies that embrace pay transparency, see the pay gap closing. Women who work for the federal government, where pay information is public, made 82% of what their male counterparts made. However, in the private sector where pay transparency is not made available, women earned approximately 79% of what men made.
In a candidate’s market, commitment to diversity is essential for organizations to be competitive. Millennials, who are the largest working generation, seek DE&I programs at their prospective employers before making a job decision. Employees who know their colleagues’ pay perform better than those who don’t, according to a study published in the Academy of Management Journal. Moreover, pay secrecy resulted in decreased employee performance.
Equalizing pay is a critical step toward creating an inclusive workplace, yet it’s often at the bottom of the priority list for organizations. For DE&I initiatives to succeed, employees must feel seen, included, and appreciated. Employees who trust their employers and see transparency around pay can seek comfort in the fact that they are not being paid less than their colleagues in the same role, purely because of their gender, race, age, or difference. This creates a feeling of inclusivity and builds a cohesive workplace culture leading to improved employee appreciation and performance.
Join ADFT today and see how our financial partners can help you find your future.