More Organizations Are Acting on Pay Equity

• New Survey From Worldatwork Reveals 66% Of Organizations Acted on Pay Equity in 2021

A new survey from WorldatWork found an increase in organizations that are taking action on pay equity.

WorldatWork’s “Pay Equity Study” revealed 66% of organizations took action on pay equity in 2021, up 6 percentage points from 2020. About one in three (31%) have pay equity on their radar but haven’t taken any action yet, while just 4%, down from 7 percentage points, do not have pay equity on their radar.

Pay equity, based on the doctrine that pay should be the same for employees who perform equal jobs but allows for pay variations based on productivity-related factors such as performance, experience and education, is a key aspect of diversity, equity and inclusion (DEI), along with such compensation areas as pay transparency and fairness. Unlike some components of DEI, pay equity is relatively easy to quantify.

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“The survey includes very robust research,” said Sue Holloway, director of compensation strategy at WorldatWork. “We had almost 1,000 respondents and the information is broken down by organization size, type and industry. That helps make the data more valuable and relevant.”

Out of a total of 997 organizations surveyed, 51% indicated they began taking pay equity-related action in the past three years. For organizations that have yet to take pay equity action but have it on their radar, 88% said the cost to fix pay inequities is a barrier to enacting a pay equity plan. For organizations that are taking pay equity action, 53% were extremely influenced to do so because “it’s the right thing to do ethically.”

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Sample Findings:

• Perceptions of pay equity fairness. 84% of organizations taking pay equity actions describe their pay system as very or mostly equitable.
• Pay equity actions in the next year. 87% of organizations considering pay equity actions in the next year plan to conduct a pay equity analysis with 75% planning pay equity adjustments and remediation.
• Frequency of pay equity analysis. 52% conduct an analysis once a year while 19% do it more frequently.
• Primary drivers of pay equity action. 40% report it’s compensation/rewards function leadership, up from 33% in 2020. Human resources’ role has dropped to 36% from 45%.
• Demographics of pay equity analysis. 98% analyze pay by gender, with 91% by ethnicity and 55% age. 50% of organizations use all three of those factors. Just 3% analyze by other factors including disability, sexual orientation and veteran status.
• Geography. 39% of respondents with multinational operations analyze pay equity in all countries, up 15 percentage points in the past two years.

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