Last week, Payscale released its 2023 Gender Pay Gap Report in observance of (almost?) Equal Pay Day (March 14th). This year’s findings report the uncontrolled pay gap—the median measure of compensation for men and women regardless of factors—inched up one cent, with women making 0.83 cents for every dollar men earn. The controlled pay gap—earnings for women and men who do the same job—remains at a one cent gap. A penny doesn’t sound like much until it does: According to the report, over the course of a 40-year career with a 3% annual increase, the average female worker will earn approximately $70,000 less than her male counterpart, strictly based on her gender. For uncontrolled, the gap is even wider over 40 years at a whopping $900,000.
As the gaps lessens slowly over time, HR continues to make pay equity a priority. Payscale’s 2023 Compensation Best Practices Report (CBPR) finds that 63% of organizations have pay equity as a planned or current initiative. But clearly there is work to be done. According to new research from The Josh Bersin Company, 71% of CHROs and the C-suite view pay equity as a key factor in people strategy but only 14% have allocated budget to achieve it.
“Considering that pay equity has been on the agenda for around 50 years, it’s shocking that as many as 95% of companies are not accomplishing the highest level of pay equity maturity. Half of the companies are only addressing pay equity to mitigate legal issues, while 37% view pay equity work as a sporadic process conducted once a year,” said Kathi Enderes, SVP of research and global industry analyst at The Josh Bersin Company. “Now, though, pay equity trailblazers like Patagonia, Microsoft, and Adidas are realizing that performance-related pay is not the ultimate goal. They understand that pay equity is not only about fair and equitable pay and bonuses but also a means of running a company equitably.”
Those organizations that invest in pay equity will reap the rewards. The research finds that the 5% of companies that excel in pay equity have higher profitability, improved customer satisfaction, and success in attracting and retaining top talent. Another consideration: Employee experience. The report shows that out of 84 employee experience strategies, fair and equitable rewards were ranked number five as a driver of positive outcomes.
Hopefully we’ll get that penny (or 17 of them) next year.
Until next time,