Can transparency close the pay gap? Transparency can close the gender pay gap, but open discussions about compensation are still taboo in the workplace.
Close to half of employees believe men are paid more than women, particularly in technology and banking and finance, according to recent research conducted by beqom, a cloud-based compensation software provider.
Why? Over a third of employees believe managers set pay based on feelings and opinions about the employee rather than an employee’s performance, experience or skill set.
Pay discussion isn’t as taboo as it once was. Nearly half of employees know how much their colleagues make or have discussed their salary with colleagues. It’s a generational trend as more than half of Millennials share or discuss their salary with colleagues compared to roughly 30 percent of Baby Boomers.
The CEO Pay Gap
There’s another fair compensation concern employees think about, the CEO pay gap. The vast majority of employees believe that most CEOs and top executives of companies today make too much compared to their employees. More than half of workers want to know what their CEO makes. Almost 30 percent of them believe pay transparency creates a better company culture, more than 20 percent believe it would motivate them to work harder and just over 11 percent want to compare their salary to their CEO’s salary.
Employees might want to know coworkers and CEOs salary’s but that doesn’t mean they’re ready to discuss it. Most employees are more comfortable talking about their work performance, career trajectory, or even their happiness or discontent than they are talking about their salaries.
Should Employers Start the Conversation?
More than half of employees don’t plan on asking for a raise or additional benefits at the end of the year, which is especially interesting since almost 30 percent plan to get a new job because they’re dissatisfied with salary and compensation. It might be advantageous for employers to start the conversation and ask employees how they feel about their compensation. If a minimal raise could improve job satisfaction and avoid costly turnovers, it might be worth it.
“Today’s workforce demands pay transparency because they believe it will motivate employees to work harder, create a better company and ultimately solve pay gap disparities among age, gender and race. We must do better to ensure that we’re creating and sustaining a vibrant, motivated and diverse workforce,” says beqom CEO Fabio Ronga.