Perhaps unsurprising to many, it appears there is a disparity in pay discussion between genders, with 25 per cent of female employees reporting they have had no discussions about their salary with their manager – while only 16 per cent of male employees said the same.
The new findings from human resource consulting firm XpertHR and HR firm Executive Networks coincide with the World Economic Forum‘s Global Gender Gap Report 2023, warning that the economic gender pay gap could take another 268 years to close, while gender parity is still almost 136 years away – an increase from its previous estimate of under 100 years.
The pay equity study found that as much as 76 per cent of male employees have a good understanding of how pay is determined at their organisations, while only 61 per cent of female employees said the same.
This disparity leaves organisations open to unequal pay practices, posing attraction and retention issues as employees seek organisations that are moving towards a fairer future of payments.
Half (50 per cent) of managers believe communicating the factors that impact pay to employees is their biggest challenge in addressing pay transparency. However, 63 per cent of senior leaders surveyed said that their organisation already trains managers on how to conduct pay transparency conversations. This suggests current training practices are likely ineffective. Concerningly, the remaining 33 per cent said no manager training is offered – a clear indicator that pay transparency and open, honest salary conversations are likely not priorities at these organisations.
The pay transparency priority disconnect is further highlighted by the fact that 71 per cent of leaders said that current pay transparency practices are effective, while only 39 per cent of workers agreed. This divide between decision-makers and employees creates a culture of distrust, therefore impacting day-to-day productivity in the workplace.
‘Pay transparency is a top priority for top-performing organisations’
With such a disparity between males and females, organisations must address these issues regarding pay transparency. Transparent and fair pay practices are a business differentiator that could help attract and retain workers while building inclusive and high-performing cultures.
Zara Nanu, CEO of Gapsquare, part of XpertHR, comments: “When organisations look inwards, empowering managers with the right data insights enables them to host pay discussions with confidence. The right data insights also enable organisations to create a culture that moves pay discussions away from a solely HR issue into one that engages the entire workforce in a comfortable and open discussion.”
Jeanne Meister, EVP of Executive Networks, adds: “There is no doubt that pay transparency is a top priority for top-performing organisations. Ensuring your organisation has the necessary understanding of how to tackle fair pay practices is not a competitive action – it is a business imperative.
“Without effectively and transparently communicating pay determinants and salary ranges, employees are left in the dark on pay structures, compounding the gender pay gap further. Looking ahead, leaders must narrow the divide between how transparency measures are perceived amongst employees and managers and create a framework that aligns the entire workforce.”