Pay inequity cannot be solved overnight, but workforce management solutions company UKG wants to help companies get started.
In partnership with Havard Business Review, UKG released its latest report on pay equity, surveying more than 450 employers and 3,000 employees to get a clearer picture of
However, money alone won't fix pay inequity, says Brian Reaves, chief belonging, diversity and equity officer at UKG.
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"At UKG we think of an ecosystem of equality — not just equity of compensation," he says. "Most companies do not look at [pay inequity] as a systemic issue. Beyond equity of compensation, you need to have equity of representation, opportunity and wellbeing."
That journey starts with employers being honest about where their company currently stands in pay equity. UKG's report revealed that while 74% of executives consider pay equity a moderate or highly strategic priority, only 41% believe their employers have achieved it.
"For some companies, maybe it's a lack of commitment," says Reaves. "But for a vast majority of companies when they start to dig into what it takes to get there, they start to run into many complexities."
Reaves notes that closing the pay gap between genders and racially diverse talent will ultimately require money — and not every company is in a position where they can just write a check. Even if employers can even out salaries in a given year, unconscious bias and discrimination can creep back in and revert progress.
In fact, without an equitable work culture, it's possible many employees of color will not feel comfortable speaking up about compensation. According to UKG's report, Black and Hispanic employees are twice as likely as white workers to remain silent about their pay, while 32% of Black employees and 25% of Asian and Hispanic employees cite discrimination as a factor in their salaries or hourly rates.
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"We tend to promote those who look like us, and we tend to hire people who look like us," says Reaves. "If a majority of people in your company look a certain way, come from the schools you came from and have similar attributes, those who are different might be judged differently when it comes down to opportunity."
That bias, unconscious or not, can also make some employees blind to persistent inequities. When UKG asked employees if they believed their organization achieved pay equity, 40% of white men felt their company had accomplished this, compared to 23% of Black women and 16% of Asian women.
Reaves underlines that if employers want to commit to pay equity, they have to commit to creating a transparent and inclusive workplace. For Reaves, this means having a clear, communicated plan on how the company plans to achieve pay equity and trackable milestones. Additionally, companies will have to reveal data surrounding compensation — but many companies are hesitant to do this.
UKG found that nearly half of companies do not have a well-established pay equity plan in place and nearly a quarter of employees are not aware if a plan even exists. On top of that, 46% of organizations admit they are not transparent when it comes to pay equity.
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"I would infer that most people would like to be transparent, but there's a cost to it," says Reaves. "If the results are negative, that can be weaponized against the company. But ultimately, no one is perfect. UKG is not perfect by any stretch and never will claim to be. So we lean into where we are, where we plan to be and hold ourselves accountable to the progress."
Reaves encourages employers to hold themselves accountable rather than burying the problem and allowing it to fester. This also means putting the responsibility of pay equity not only on HR but the CEO, explains Reaves. Nearly half of executives believe HR executives should be primarily responsible, according to UKG. Reaves emphasizes that if pay equity isn't viewed as essential to an organization's infrastructure and overall success and is sequestered as solely an HR problem, change isn't likely to happen.
Reaves asks employers to be honest about what pay equity means to them.
"If a CEO says this topic is important to them, then the CHRO will be empowered — because if a CEO says something, most companies get it done," he says. "If this isn't a business imperative for you and you only see it as a nice thing to do or a compliance issue, the chances of it being done at scale and consistently is significantly less."
