Pragmatic Solutions to Achieve Pay Equity
I was recently interviewed by Clutch, a B2B research and reviews firm based in Washington DC. Clutch gathered survey data about what job seekers want when searching for a new role.
The data reveals that 32% of job seekers are on the market in search of better pay and/or benefits. I explained that it’s likely some of these job seekers became aware of unequal pay in their workplaces:
Donovan warns that unequal pay can lead to low morale and high turnover.
“Once someone finds out they’re underpaid, they’re no longer your employee,” Donovan said.
When companies fail to provide competitive pay, their employees will seek jobs elsewhere.
Candidates who begin a job search after receiving inadequate pay are especially attuned to the salary companies offer. Companies should be transparent about the salary they plan to offer:
Companies that publish the salary they plan to offer in job listings can stand out from the competition and save time by immediately screening out candidates who would be unsatisfied with a role’s compensation.
If a company doesn’t list salaries publicly, Donovan advises hiring managers to add transparency to the interview process by telling candidates what they plan to offer.
“Just get it out there,” Donovan said. “It’s not a big event. You don’t have to have meetings. Just do it.”
When crafting a job offer, companies should be aware that salary is a top concern for job seekers. Offering equal pay at the market rate can save on long term costs associated with turnover.
Companies that are transparent about the salaries they offer are more likely to build trust with candidates and less likely to suffer from high turnover.
Finally, companies and recruiting firms often stress the overall value of their compensation packages, including both salary and benefits. I explain why this thinking is flawed:
Donovan argues that an employee’s salary directly impacts their ability to participate in other benefits.
“Your end-of-year bonus, signing bonus, life insurance, long-term disability, 401(k) – all that is impacted by your base salary,” Donovan said.
When workers consider their overall compensation, most focus on salary – not benefits.
Employees, not employers, are increasingly responsible for paying into benefits. Due to this trend, employees are less likely to see benefits as a determining factor when searching for a new job.
Overall, companies that are transparent about offering equal, competitive pay are much more likely to hire the talent they need – and convince them to stay.
You can read the full report, including analysis of the data, on Clutch.