Today, 14 March, is Equal Pay Day in the US.
Every year the day shifts because it represents how many extra days women have to work into the new year to earn the same as their male colleagues. This year, the number is 73 days because of stagnating progress around pay parity in the US.
In fact, data by Visier shows that the gender pay gap has actually widened between 2021 and 2022 from $0.85 to $0.84. This means for every dollar a man makes, his female counterparts make 84 cents, or 16 cents less.
This decline is actually the first Visier has recorded since it first started analyzing the data of 15 million employee records in 2017.
And it undermines the progress being made towards Equal Pay International Coalition (EPIC) predictions of pay equity by 2030.
To meet that deadline in seven years, annual gender pay equity must increase by two cents every year. However, if the US remains at its average rate of change for the past five years, parity wouldn’t be reached until 2036 – six years late.
Of course, if 2023 sees a similar decline to 2022, then pay parity could take even longer to be achieved.
Transparency is key to pay equity
Talking about the data, Visier’s head of research and value Andrea Derler shares with UNLEASH: “This decline, from $0.85 to $0.84, may not feel significant on its own, but it shows a clear halt in progress.
“It will take dedicated effort for organizations to get back on track, or risk another year of equity erosion.”
But what must employers do to drive positive progress towards pay parity?
According to Derler, “in order to recoup gains, movement towards greater pay equity for women requires increased transparency and accountability within businesses”.
She adds: “Employers have a responsibility to inform their employees as to how pay scales and salaries are determined with greater clarity on the process behind compensation decisions, including the key metrics used to decide salaries, bonuses and pay rises.
“By sharing and benchmarking the facts and trends behind pay, organizations can make better, fairer decisions and close the gap more effectively.”
WTW’s senior director work and rewards Tamsin Sridhara agrees. “As consumers, we expect all retailers to outline the prices of their services and products with transparency, so we’re able to make an informed decision before making a purchase.
“Yet when it comes to employment, candidates are often expected to enter the application process without having transparency around what their services are worth.
“Men and women often start the same job on different salaries. This is not corrected over time, leading to ongoing equal pay issues.”
This can be corrected by “all companies being required to tell job applicants the pay for the job and being more transparent on pay during employment.”
Sridhara concludes: “Employees’ expectations are growing, they expect transparency and actions that align with the values that are being communicated, which is why openness around pay is such an important step towards achieving equal pay.”
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