Establish Pay Equity to Keep Pace with Employee Care Expectations
The Gap in Employee Perception
When it comes to the employee experience, employers and employees often don’t see eye to eye. Recent research highlights this disconnect: while 88% of U.S. employers believe they demonstrate care for their employees, only 60% of employees feel cared for. This perception gap underscores how closely the employee experience is tied to an employer’s ability to genuinely demonstrate care for their workforce.
Employers strive to create supportive and valued work environments through various programs, yet employees’ needs and expectations are continually evolving. Many employers fail to keep pace with these changes, particularly in the area of financial well-being. For instance, nearly 60% of full-time employees experience financial stress, which affects their work performance, sleep, mental and physical health, and relationships.
Pay Equity: A Vital Care Point
To truly demonstrate care and respect for employees, organizations must prioritize pay equity. Equitable compensation is fundamental to a positive employee experience and strong organizational performance. Research shows that pay disparities can lead to decreased collaboration, communication, and teamwork, as well as eroded trust in leadership. Conversely, pay equity enhances productivity, engagement, motivation, workforce cohesion, and diversity.
Despite its importance, only 41% of employees believe their employers have achieved pay equity, and 26% say their organizations have been completely unsuccessful in ensuring equal pay for equal work. Additionally, about half of employers lack a well-established pay equity plan.
Establishing Your Pay Equity Plan
To improve pay equity within your organization, consider the following steps:
- Clarify Your Compensation Philosophy: Define the guiding principles that determine how you pay and reward your employees. Ensure this philosophy aligns with your mission, values, and business objectives.
- Conduct Pay Equity Audits: Regular audits are crucial for identifying pay disparities and maintaining long-term equity. These audits should consider various factors, including gender, race/ethnicity, age, and disabilities, to identify risk areas within every employee group and level.
- Set Competitive and Explainable Pay Ranges: Update your pay equity plan to prevent expanding inequities during recruiting, hiring, and salary negotiations. Engaging an external expert may be necessary to determine fair and competitive salary ranges.
Proactive employers are taking action on pay equity before legal mandates force their hand. This approach enhances talent attraction, retention, and trust while adding credibility to their claims of caring for employees.
Employee Care: Obligation or Opportunity?
MetLife’s research identifies critical moments in employees’ lives when they need the most care from their employers. These moments—such as purchasing a home, having a child, losing a loved one, or taking leave—can profoundly impact the employee experience. Employers that provide support during these times see higher levels of productivity, loyalty, engagement, and holistic health among employees.
However, many employers fall short in delivering care at these critical moments. Some rely on outdated programs, hoping they will meet new needs, while others use cookie-cutter approaches that don’t align with their employees’ unique needs. A lack of insights and communication also prevents employers from understanding their workforce’s needs.
Customizing Care Offerings
Providing effective care requires a clear understanding of employees’ specific needs and challenges, both at work and at home. This understanding allows employers to update and customize care offerings to maximize effectiveness and achieve solid returns on care investments. Surveying employees—formally and informally—is one of the best ways to gather insights into their diverse needs.
In addition to pay equity and financial health programs, employees now expect employers to offer holistic well-being solutions, greater work-life balance, access to ongoing learning and development programs, and meaningful work. These components are essential to workplace care, and employers must be willing to provide them.
Conclusion
Raising your organization’s level of care to meet employees’ expectations is not just an obligation; it’s an opportunity. By addressing pay equity and providing comprehensive care programs, employers can demonstrate respect and concern for their workers. This approach not only bridges the perception gap but also leads to robust business outcomes. At Mosaic, we believe that establishing pay equity is a critical step in keeping pace with employee care expectations and building a more engaged, motivated, and loyal workforce.
