Welcome to the weekend. We will soon be in a new year. There has been a lot of talk at least in my house about gender inequality pay in the workplace.
However, inequality pay exceeds just the gender variety. I understand that some employers deliberately give people working on the same level different salaries depending on their negotiating power. This results in low morale, high rates of staff turnover, difficulty hiring new talent, and litigation.
Understandably, employees resent pay inequality, and more and more are demanding action be taken to address the issue. Pay equality issues affect your workplace in multiple ways.
The first, and perhaps most obvious, is the effect pay inequality has on employee trust and morale. Employees who feel they are treated unfairly are unlikely to perform at their best. Equal pay encourages a more content workforce, which can have a significant impact on productivity.
If an employee suspects they are being paid less than their counterparts, they are likely to leave. If they leave this leads to higher rates of employee turnover. Which then leads to the attendant costs of hiring and onboarding new talent. This does not even take into consideration the fact that the employee leaving may be the very best that industry has to offer.
Finding new talent may be difficult for a business with a reputation for unequal pay. People are reluctant to take up employment that will give them the stress of worrying about equality of anything , let alone pay inequality.
Unequal pay in the workplace can lead to complaints to HRM and potential court action brought on by the aggrieved party suing the company. If a case goes to court may the company may also be liable for lost wages, emotional damage, and legal costs. Even if the company wins the case, it cannot recover the time invested in defending itself. A court case also leads other employees to question whether their own wages are fair or not.
This can also disastrously affect the brand and reputation of the company.
A proactive approach to pay equality helps prevent issues with unequal pay affecting your company. Some companies resolve the issue with a set system for determining pay that’s applied to all employees.
Such systems determine pay based on position, work experience, and education, and effectively remove the risk of assigning different employees different pay for similar jobs.
Regularly reviewing compensation helps identify and fix pay equity issues.
Companies should also consider an open pay policy, where employees can quickly compare their own wages with their colleagues. While this solution often works, it does raise the possibility of employees becoming disgruntled when they see how much management earns.
Unequal pay in the workforce needs to be addressed. By ensuring your company is free from pay equity issues, you protect your company from litigation, keep your employees happy, and attract new talent. The company that pays its employees fairly has a major advantage when competing with other companies for the best talent.
All the above affects the bottom line, so needs to be addressed.
See you next week by God’s grace.