Employees who feel valued, fulfilled, and confident that they belong allow a company to perform its core work better. However, achieving meaningful workplace equity has yet to be established as a critical business imperative for most.
Most organisations fail to recognise that gender pay equity in the workplace benefits everyone – not just women.
What are the key overlooked gains of gender pay equity?
Pay equity is a catalyst for employee growth and development – for everyone
The road to growing one's career at work is frequently under construction. However, when the paths for professional development are established and understood, so are the opportunities for increased earning potential for everyone. A company with engaged employees performs better, and when the company performs well, employees are rewarded, and everyone wins.
Fair pay is a powerful catalyst for organizational transformation because it forces organizations to address the operational foundation on which it is built. This process has helped us clarify our global working model, job descriptions, point of view on titles, salary bands, paths to promotion, KPIs, performance measures, and how we group jobs for equitable decision-making – regardless of identity. When the org chart is easily understood, the pay equity analysis is straightforward – building trust between employees and employers.
Pay transparency helps to undo workplace discrimination
Employee salaries have been driven by the limitless space for negotiation, which favors some groups over others in significant and cumulative ways. Striving for pay equity – regardless of identity – reduces discrimination in pay decisions.
Much of the workplace discrimination around pay equity is because women overall work lower-paying jobs than men and are less represented in the highest levels of business — which is due to a mix of root causes, including unequal access to jobs, promotions, opportunities to collaborate on high-profile projects, pay differentials across gendered job functions, and the negative impact on salaries, advancement, and tenure due to factors such as caregiving responsibilities.
Companies can't hide behind this fearful and individualistic approach to paying employees any longer, with pay transparency legislatively gaining traction worldwide. It's only a matter of time before it's a collective business norm.
Pay equity is good for men
How and why pay decisions are made within an organization are often opaque to employees – creating a sense of confusion and scarcity. We've seen the benefit firsthand of bringing employees close to the HOW and WHY of pay equity by building transparent systems and policies for compensation. We are more fair negotiators with new joiners, our spending is more intentional and impactful around salary review time, and we've built a community of trust.
By clarifying salary bands, we don't make one-off job arrangements that become outliers in a pay analysis. As a result, our communication about the results of our pay analysis is easily understood, and the data to support our approach is indestructible. By determining precise entry-level salaries, we help to close the global pay gap and ensure that men and women are paid similarly for similar work before they even start, establishing a stronger and stronger base over time.
A parallel example is that parents – regardless of identity – are increasingly enjoying the benefit of more public and private sector support for new mothers in the form of longer, job-protected parental leave and pay transparency at work, which equally supports men on their career journey, I'm confident pay equity will do the same.
Pay equity builds trust
According to Mercer's 2022 Global Talent Trends Report, the pandemic has brought organizations and their workers closer together, and workers' trust in their employers is at an all-time high. Post-pandemic, people are reprioritizing and investing their time with and for companies that meet newly defined, basic needs - feeling valued, having work that fulfills them, having confidence that they belong, and enjoying themselves while doing it.
So, in this so-called "new normal," leaders have a unique opportunity to double down on fairness, embrace transparency and build trust by sharing their pay policies, points of view, and analysis results.
It is the era of workplace equity
Future generations and people of all identities benefit from equal for equal work. It addresses racial discrimination and improves business and the economy. It replaces old systems based on outdated mindsets and builds a more sustainable approach to work.
The change to pay transparency will be the most notable shift in the global talent market in decades.
While data specifically on pay transparency and pay equity in Asia is scant, the McKinsey Global Institute estimates that advancing women's equality in the Asia Pacific alone could boost the region's GDP by 12% - or add 4.5 trillion to the region's annual GDP by 2025.
Not doing anything about pay equity is far more costly than taking action
According to Syndio's research, the longer an organization puts off addressing inequities, the more expensive remediation becomes — increasing on average in the hundreds of thousands of dollars and growing every year.
Furthermore, according to Syndio's research, "While remediation has the potential to be costly, it's a small price to pay to communicate your progress before someone else tells your pay story for you. Employees who want answers are digging into company pay on their own and sharing salaries among themselves. Ignoring or avoiding pay and other workplace equity issues now can snowball into big (and expensive) problems down the road, in the form of employee complaints, discrimination lawsuits, and damaged brand reputation."
While staff costs are heavy everywhere, how often have we chased the shiny new object regarding People investments hoping it would solve all of our attraction and retention challenges, only to learn we added more cost with no positive impact on culture? Let's stop getting it wrong by investing in things that don't matter and don't contribute to real business ROI and start going directly to the source - employees - to sharpen our strategic people plans and spend wisely.
If we first pay equitably, we can achieve any other employee-driven goals.
The power shift in the job market from employer to employee and back again has consistently ping-ponged back and forth due to various factors. But soon, when salary transparency becomes the norm everywhere, leaders will be held to the highest standards ever by employees, left with only one choice but to publish their playbook on fair pay.
Michele Prota is the global chief talent officer at Forsman & Bodenfors, the first and only global creative agency to receive the Global 3% Certification and the only creative agency in the top 1% of organizations worldwide to achieve global Fair Pay Workplace Certification.