Research from XpertHR and Executive Networks shows there is a disparity in pay discussions between genders, with a quarter (25%) of female employees reporting no salary conversations with their managers compared to just 16% of male employees. The findings come as the World Economic Forum warns that the economic gender pay gap will take another 268 years to close, while achieving global gender parity will take nearly 136 years, an increase from its previous estimate of almost 100 years.
XpertHR and Executive Networks surveyed 1,000 HR leaders, business leaders, and employees across the US and UK and the different results between genders shows how gender biases are impacting transparency conversations. For organizations to make progress on advancing pay equity, effectively communicating how pay is determined and advertising reasonable pay ranges to all employees is critical for organizations who seek to close today’s widening pay equity gaps.
Lack of pay transparency still prevails
More than three-quarters (76%) of male employees agree that they have a good understanding of how pay is determined at their organizations, but a lower proportion of female employees (61%) said the same. This disparity leaves organizations open to inequal pay practices, posing attraction and retention issues as employees seek organizations that are moving towards a fairer future of pay.
Half (50%) of managers believe communicating the factors that impact pay to employees is their biggest challenge in addressing pay transparency. However, two-thirds (63%) of senior leaders surveyed said that their organization already trains managers on how to conduct pay transparency conversations. This suggests current training practices are likely ineffective. Concerningly, the remaining third (33%) said no manager training is offered – a clear indicator that pay transparency and open, honest salary conversations are likely not priorities at these organizations.
The pay transparency priority disconnect is further represented with findings showing that seven out of 10 leaders (71%) said that current pay transparency practices are effective, while only 39% of workers agreed. This divide between employees and leadership creates a culture of distrust impacting workforce engagement and productivity.
Erasing pay secrecy
If pay secrecy is left unaddressed, organizations will likely see little, if any, progress toward a future of fairer pay practices. Transparent and fair pay practices are a business differentiator that serve to attract and keep workers while building inclusive and high-performing cultures.
Zara Nanu, CEO of Gapsquare, part of XpertHR, comments: “When organizations look inwards, empowering managers with the right data insights enables them to host pay discussions with confidence. The right data insights also enable organizations 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, Executive Networks and author, adds: “There is no doubt that pay transparency is a top priority for top-performing organizations. Ensuring your organization 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.”
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