WorldatWork Survey finds 70% of organizations are taking action on pay equity.
SCOTTSDALE, Ariz., Jan. 17, 2023 /PRNewswire/ — WorldatWork’s “Pay Equity Study” finds an increase in organizations acting on pay equity.
The survey revealed 70% of organizations were taking action on pay equity in 2022, a 10% increase since 2019 and a 4% increase over 2021. Only 2% of organizations reported not having pay equity on their radar. Three-quarters of organizations reported that they have been doing pay equity analysis for three years or more compared to two-thirds in 2021.
Organizations taking action on pay equity cite “it’s the right thing to do, to build/maintain a culture of trust and to remove bias against protected classes” as the main reason for doing so. The potential cost to fix pay inequities is cited as one of the largest barriers for companies that have pay equity on their radar and have not yet acted.
“Increasingly employees want more transparency on how they are being paid and why,” said Sue Holloway, CCP, CECP, compensation content director at WorldatWork. “With more pay transparency legislation being implemented, pay equity has garnered more attention from organizations.”
Organizations are increasingly concerned about the legal risk of pay inequity; since 2020 the proportion citing “mitigating legal risk” as very or extremely influential to their organization’s choice to pursue pay equity has increased by 20% to 71%.
While organizations have begun to include more types of compensation in their pay equity analyses, most organizations could improve their pay equity analysis by being more inclusive of all types of pay.
- Nearly all include base pay in their analysis or are thinking of including it in the next year.
- More than half include or hope to soon include short-term incentive plan payments (e.g., annual bonuses, profit sharing), and sales commissions/incentive payment.
- Nearly half include or anticipate including long-term incentive plan equity/stock-based grants.
- Even the least-frequently included types of compensation, such as special one-time equity/stock-based grants are (or likely will soon be) included in pay equity analysis by more than a quarter of respondents.
“If companies conduct an analysis only on base pay, they could be leaving out important elements of total compensation. Including bonus payouts, equity grants, and other kinds of compensation results in a more holistic analysis.” – Emily Cervino, Head of Fidelity Stock Plan Services Industry Relationships and Thought Leadership
- Just over one in ten share the high-level results of pay equity analysis publicly.
- Only a quarter share the high-level results with their employees.
- And only a third even share the fact that they are doing a pay equity analysis with their employees.
The survey, fielded in conjunction with Fidelity Investments, was conducted to gather information on Diversity, Equity, and Inclusion practices, specifically to quantify trends in pay equity. WorldatWork invited its broader membership and customer base to participate in an electronic survey on pay equity initiatives. A total of 534 responses were received, representing organizations of different sizes and across multiple industries with employees in the U.S. Email invitations were sent directly to participants on July 18, 2022 and at two-week intervals; the survey closed on September 7, 2022.
WorldatWork brings together the best professionals from around the world to provide the foremost education, leadership and community dedicated to elevating employee experiences and organizational performance. For over 65 years, WorldatWork has set the standard in rewards best practices, professional development and human capital leadership. Over 90% of the Global 500 companies trust and rely on WorldatWork education and certified professionals to power their employee rewards, engagement and retention efforts.
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $9.6 trillion, including discretionary assets of $3.6 trillion as of September 30, 2022, we focus on meeting the unique needs of a diverse set of customers. Privately held for over 75 years, Fidelity employs more than 60,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.
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SOURCE WorldatWork
