Pay transparency is a topic on the lips of many within the workers’ rights arena. Driven by a desire to eradicate prejudicial structures like the gender gap, race-related inequalities and other similar practices, advocates are setting their sights on pay as a means of gaging a given company’s diversity efforts in a practical sense.
In recent months, many major companies have received pressure from their shareholders to take significant steps toward pay transparency. While the businesses at the forefront of this are largely major corporations, small businesses can also learn from this growing trend.
What is driving the wage gap?
When it comes to salary, the gender gap is no secret. However, recent attention has been drawn to attempting to fix this issue, as companies, advocacy groups and even government agencies all shine lights on corporate pay practices trying to seek out these instances of inequality. As Human Resource Executive Online noted, Walmart, ExxonMobil and eBay have all recently received shareholder proposals asking the companies to disclose details on their pay practices.
Among the information requested was any discrepancy in pay between male and female employees, as well as a comparison of executive pay with median staff pay. The Walmart shareholders also requested information pertaining to “staff motivation” and its role on pay structures. The goal of these proposals is to ultimately help companies develop new metrics on which to base their pay practices.
What does your business need to know?
Despite legislation such as the Pay Equity Act, the gender wage gap still seems prevalent throughout many companies. While some executives are wary of the new push toward pay transparency, the practice can help well-meaning companies uncover any instances of pay inequality that need to be rectified.
The Harvard Business Review noted that while many responses to the gender gap have traditionally centered on how women can improve their station, the onus really falls to executives and HR services to enact policies that actively take steps to close this gap. This primarily involves HR taking a more active role in monitoring company pay practices, including salary adjustments, promotions and raises, to ensure the process remains fair and unbiased.
Some entrepreneurs may not have the resources for an in-house HR department to offer this additional level of oversight. Fortunately, PEO companies offer HR outsourcing that can help small-business owners establish or tweak company policies without having to cover additional employees on the payroll.