{"id":3014,"date":"2022-10-28T17:02:36","date_gmt":"2022-10-28T17:02:36","guid":{"rendered":"https:\/\/www.adzuna.com\/blog\/?p=3014"},"modified":"2023-02-27T14:24:07","modified_gmt":"2023-02-27T14:24:07","slug":"how-can-salary-transparency-create-better-equality-in-the-workplace","status":"publish","type":"post","link":"https:\/\/www.adzuna.com\/blog\/how-can-salary-transparency-create-better-equality-in-the-workplace\/","title":{"rendered":"How can salary transparency create better equality in the workplace?"},"content":{"rendered":"

Salary transparency is when an employer discloses salary for internal and external roles. It\u2019s really that simple. Enhanced clarity means that employees can freely discuss wages and that when someone is applying for a role, their previous salary does not impact what they are offered for this role.\u00a0<\/span><\/p>\n

It\u2019s a really important way of leveling the playing field, especially when there are currently huge salary gaps based on race and nationality, gender, and health, currently in the US.\u00a0<\/span><\/p>\n

We establish precisely where we are when it comes to equality in the workplace, and the impact that salary transparency could have on the future of the workforce.\u00a0<\/span><\/p>\n

 <\/p>\n

Where are we at right now?<\/h2>\n

Pay gaps, unemployment rates, and the people who are at the top are all currently skewed toward white middle-class men.\u00a0<\/span><\/p>\n

If you\u2019re a white male you\u2019re more likely to earn a higher salary, get promoted more often, and be in employment in the first place.\u00a0<\/span><\/p>\n

This poses a lot of issues for jobseekers and companies alike. Companies with diverse teams are <\/span>more innovative<\/span><\/a>. That\u2019s a fact. Businesses with above-average diversity, produce greater revenue through innovation. And they\u2019re also nicer places to work, with better employee well-being, and a lower staff turnover.\u00a0<\/span><\/p>\n

In short, it pays for businesses to be more inclusive, and to encourage applications from a diverse range of potential hires.\u00a0<\/span><\/p>\n

If we look at the other side of things, more people in work, receiving fairer pay and benefits means that we collectively spend more, stimulating our economy. It\u2019s a win-win.\u00a0<\/span><\/p>\n

We\u2019re a long way off though. Here are some key insights into protected characteristics:<\/strong><\/span><\/p>\n

Persons of color at work<\/h3>\n

The information is patchy but what we do know is that persons of color are earning less overall and are occupying fewer senior positions. It\u2019s hard to know the exact figures, as currently there is no mandatory rule for companies to collect this data.\u00a0<\/span><\/p>\n

In the 2018 U.S Census, <\/span>14.6% of the US population<\/span><\/a> self-identified as a person of color. <\/span>Black workers <\/span>only make up 13% of the workforce and Asian workers an additional 6%, with Indians and Alaskan Natives making up just 1% of the labor force.\u00a0<\/span><\/p>\n

In 2015 Black people earned <\/span>just 75% as much<\/span><\/a> as their White counterparts, the same pay gap that existed in 1980, with the average hourly wage for Black men at $15, and Hispanic men\u2019s average hourly wage at $14. This is compared to White men earning an average hourly wage of $21, and Asian men at $24. These hourly wages go down even further when you look at the average hourly earnings for Black women ($13) and Hispanic women ($12), compared to White women ($17) and Asian Women ($18).<\/span><\/p>\n

Pew Research highlights how this can in part be attributed to the fact that <\/span>lower numbers of Black and Hispanic people are college educated<\/span><\/a> with those earning college degrees earning significantly more than those who have not. However, even with a college degree, pay gaps still exist, with college-educated Black and Hispanic men, as well as White and Asian college-educated women, earning an average of 80% of the hourly wage of their White male counterparts, this reduces down to 70% for Black and Hispanic women with a college degree.\u00a0<\/span><\/p>\n

8% of C-suite executives<\/span><\/a>– those in senior management positions, are Black. This perhaps isn\u2019t surprising when you learn that in February 2022, there were <\/span>only six Black CEOs<\/span><\/a> within <\/span>S&P 500 and Fortune 500 companies.\u00a0<\/span><\/p>\n

The U.S Bureau of Labor Statistics <\/span>report into labor force characteristics by race and ethnicity<\/span><\/a> highlighted that in 2020 the unemployment rate for persons of color was higher, citing the labor market downturn in 2020 and the impact of the coronavirus (Covid-19) pandemic, impacting Black, Asian and Hispanic populations disproportionately.\u00a0\u00a0<\/span><\/p>\n

There are plenty of potential reasons for this. For example, individuals from ethnic minority groups were more likely to be working in occupations with a higher risk of Covid exposure, such as front-line health workers. Then, the sectors most affected by the pandemic (hospitality) have more persons of color.<\/span><\/p>\n

The pandemic emphasizes that we still have a long way to go when it comes to equal pay, better employment rates, and equal opportunities for persons of color.\u00a0<\/span><\/p>\n

 <\/p>\n

Women in work<\/h3>\n

We know a lot more regarding differences in pay and opportunities for men and women, as much more data collection has been done in this area.\u00a0<\/span><\/p>\n

The <\/span>Equal Pay Act of 1963<\/span><\/a> protects against wage discrimination based on sex. It covers all types of compensation and lays out that employers must equalize pay, by raising the lower wage to the higher wage, rather than reducing the higher wage to the lower wage, if there is inequality in wages between men and women within the same role.\u00a0<\/span><\/p>\n

A <\/span>2022 study from the non-profit Capital<\/span><\/a> found that out of 954 major U.S companies, only 75 (23%) reported the pay ratios between their male and female employees, with only 28 of these companies reporting a perfect pay parity, though in all 67 companies (including the 28 with perfect pay parity) were very close.\u00a0<\/span><\/p>\n

Some of the companies reporting their gaps really stood out. For example, <\/span>Norton Life Lock<\/span><\/a> disclosed the highest pay parity ratio across all levels of management. <\/span>Alfac<\/span><\/a> also scores very well on their pay parity, and as part of their corporate social responsibility reporting have also highlighted that 35% of their US workforce are female and that women make up 55% of their leadership team.\u00a0<\/span><\/p>\n

Equal pay day<\/span><\/a> is an awareness day to highlight how much women must work into the following year, to earn the same amount that men earned in the previous year. There is a range of equal pay days that have been added to the calendar to highlight a more inclusive representation of women, including \u2018Moms\u2019 Equal Pay Day\u2019 highlighting that Moms are on average paid 58 cents for every dollar paid to dads.\u00a0<\/span><\/p>\n

Data taken from the U.S Census data shows that women earn an average of 85% of what men earn- A pay gap of 15%. So, salary transparency is key, and women knowing their rights.\u00a0<\/span><\/p>\n

Currently, <\/span>only 33% of senior roles<\/span><\/a> are held by women \u2013 with 86 women being promoted to manager for every 100 men. Within 41% of all women being promoted to manager, only 12% of those are Women of Color, with the percentage dropping even lower as you move up the managerial ladder. However, with senior positions comes more pay so ideally, for equality, men and women would need to be 50\/50.\u00a0<\/span><\/p>\n

Women are also more likely to have caring responsibilities, meaning fewer women have the opportunity to work full-time. In fact, of the 25.09 million part-time workers in the US, <\/span>63% are women.<\/span><\/a>\u00a0<\/span><\/p>\n

Stereotyping also has an impact, with women more likely to be in careers that have lower rates of pay such as nursing, care work, and teaching, while men are pushed into roles such as finance, construction, and business. However, evidence is suggesting that this \u201coccupational segregation\u201d is lessening over time.\u00a0<\/span><\/p>\n

 <\/p>\n

Disabled workers<\/h3>\n

In the US, <\/span>1 in 4 adults<\/span><\/a>, aka the working-age population, are disabled. This is around 61 million people. In fact, <\/span>6 in 10 adults<\/span><\/a> in the US have a chronic disease, with 4 in 10 having two or more.\u00a0<\/span><\/p>\n

The amount of people reporting a disability or long-term health condition is increasing year after year. This could be down to factors such as long covid, that more people are reporting mental and physical health, or that records are improving.\u00a0<\/span><\/p>\n

It\u2019s therefore vital that when we consider equal pay, equal chances at promotion, and access to work, we consider disabled people.\u00a0<\/span><\/p>\n

Currently, the disability employment gap is 78.7%, with <\/span>only 21.3% of disabled working-age Americans in work,<\/span><\/a> or actively looking for work. For those without disabilities, this number is 67.1% in work or actively looking for work.\u00a0<\/span><\/p>\n

If you\u2019re disabled, you\u2019re less likely to work in management roles, with 36.5% of Americans with disabilities working within these roles compared to 42.7% of non-disabled Americans.\u00a0<\/span><\/p>\n

Lack of flexibility to attend vital appointments, lack of physical access (such as ramps and quiet spaces), and a lack of education, have meant that people with disabilities are more likely to be self-employed than their non-disabled counterparts. They\u2019re also more likely to be working part-time.\u00a0<\/span><\/p>\n

For people with disabilities in employment, there is a significant pay gap of <\/span>66 cents for every dollar<\/span><\/a> that a non-disabled person earns, though this gap can vary hugely depending on condition and circumstance.\u00a0<\/span><\/p>\n

 <\/p>\n

Can pay transparency lead to greater equality in the workplace?<\/h2>\n

So far, we\u2019ve covered how pay, access to work, and levels of unemployment vary hugely depending on who you are, your gender, your race and nationality, and your health.\u00a0<\/span><\/p>\n

As we briefly touched on with gender, pay transparency is making an impact on pay gaps, but of course, won\u2019t solve access to employment or other societal issues impacting equality.\u00a0<\/span><\/p>\n

Research shows that when an employer advertises the salary or salary range of an internal or external role, doesn\u2019t require applicants to disclose, and allows employees to freely disclose salary pay equity is improved.\u00a0<\/span><\/p>\n

Here are a few examples of how pay transparency can aid employees and jobseekers.<\/span><\/p>\n

Sam is an autistic web developer with 10 years of experience. He is highly respected by his colleagues, but as he tends to work remotely he doesn\u2019t tend to form personal relationships with colleagues outside of work. This has meant that he has never discussed salary and is underpaid.\u00a0<\/span><\/i><\/p>\n

Sam is headhunted for a role and told upfront the salary. $20k above what he is earning. The recruiter indicates that as Sam would be a senior hire that his salary could increase more. So Sam asks what that might look like. He is told another $20k.\u00a0<\/span><\/i><\/p>\n

Sam applies and is offered the job. He asks for a salary that is $40k above his current salary and is offered it, no questions asked.\u00a0<\/span><\/i><\/p>\n

In this scenario, Sam has never felt comfortable asking his colleagues about salary as he\u2019s never had that kind of relationship with them. When he\u2019s told his salary upfront, he gets substantially more than he may ever have asked for.\u00a0<\/span><\/p>\n

Jennifer is a Black woman who has just returned to work after extended maternity leave. Her role has changed due to the pandemic in her absence and her team has grown. Her rate of pay is the same as it was before she left.\u00a0<\/span><\/i><\/p>\n

Jennifer has a good relationship with her manager, and she asks her whether her current rate of pay is in line with colleagues with the same role and level of responsibility. Her manager says that she will look into it.\u00a0<\/span><\/i><\/p>\n

On digging a little deeper, Jennifer\u2019s manager realizes that there is a gender pay gap and reports this to more senior managers.\u00a0<\/span><\/i><\/p>\n

As Jennifer\u2019s state has equal pay laws in place that make employers report gender pay gaps annually and her employers want to get their figures corrected in time for their next review, Jennifer\u2019s pay immediately increases.\u00a0<\/span><\/i><\/p>\n

Having a supportive employer hugely helps Jennifer here. The current laws help her, especially as her employer has to report gender pay gaps annually.\u00a0<\/span><\/p>\n

And finally,\u00a0<\/span><\/p>\n

James is applying for a promotion, having met all the internal criteria to level up. His employer advertises the salary range for every role that they advertise (both internally and externally) so James knows straight away what the salary should be.\u00a0<\/span><\/i><\/p>\n

He receives the promotion and immediately asks for a salary within that range, his employer negotiates slightly, but they settle on a salary still within that range with a plan for the next 6, 12, and 24 months to help James achieve incremental pay increases.\u00a0<\/span><\/i><\/p>\n

For James, knowing what the salary could be, he knew straight away what his employer was willing to pay, even if it was within a range.\u00a0<\/span><\/p>\n

 <\/p>\n

Will salary transparency become compulsory?<\/h2>\n

Salary transparency laws are emerging across America, with many states beginning to bring in laws around when and how salary should be disclosed during the recruitment process. This could have a huge impact on our future salaries, as everyone will be on the same page when they\u2019re negotiating salary for a new job or promotion or navigating a pay rise, but currently, there isn\u2019t a law that covers the whole of the US.<\/span><\/p>\n

 <\/p>\n

\n

\"?\"\u00a0Read more: What is salary transparency and how does it vary state by state?<\/a>
\n<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Salary transparency is when an employer discloses salary for internal and external roles. It\u2019s really that simple. Enhanced clarity means that employees can freely discuss wages and that when someone is applying for a role, their previous salary does not impact what they are offered for this role.\u00a0 It\u2019s a really important way of leveling Continued \u00bb<\/a><\/p>\n","protected":false},"author":27,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[148],"tags":[140],"class_list":["post-3014","post","type-post","status-publish","format-standard","hentry","category-job-market","tag-featured"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/posts\/3014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/comments?post=3014"}],"version-history":[{"count":0,"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/posts\/3014\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/media?parent=3014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/categories?post=3014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adzuna.com\/blog\/wp-json\/wp\/v2\/tags?post=3014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}