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New Report: Pay Transparency May Be the Key to Keeping Your Employees in 2021

New Report: Pay Transparency May Be the Key to Keeping Your Employees in 2021

The pandemic has transformed the workplace, adjusting how employers make decisions and evolving how employees view work and compensation.While aspects

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The pandemic has transformed the workplace, adjusting how employers make decisions and evolving how employees view work and compensation.

While aspects of our pre-pandemic work-life — like the office — will likely not be a thing of the past, much of the change brought on by the pandemic will be permanent, and the way companies approach their employees’ needs must also shift.

Employers are beginning to see the fallout from 2020, as forty percent of employees plan to quit their jobs this year due to how their employers managed the COVID-19 pandemic. And with82% of organizations planning to hire this year, employers must reconsider their strategies and policies to meet employees’ needs if they want to retain staff through 2021 and beyond.

To uncover how employee attitudes about compensation and rewards have changed through the pandemic, beqom recently released their 2021 Compensation and Culture Report. The report surveyed 1,000 employed adults in the US to discover how their perceptions of total rewards, D&I, work-life balance, transparency, and benefits have changed in the COVID-19 era.

As we move beyond the pandemic and look to a new normal, where should employers focus their actions to best attract and retain employees?

Implement more transparent and inclusive pay practices

A previous report from beqom found that when employees perceive a pay gap, regardless of if the pay gap actually exists, it results in a 16% decrease in intent to stay. Given the pay gap’s impact on retention, transparent communication around compensation should be of great concern to most employers.

“More than a third (36%) of employees still do not believe their company pays employees fairly, and this has a direct impact on employee retention,” said Tanya Jansen, co-founder of beqom. “In fact, our report found more than half (58%) of employees would consider switching jobs for more pay transparency, and for Gen Z the number jumps to 70% — a clear indicator of a greater need for transparency, especially for employers hoping to attract and retain young talent. As the workplace continues to evolve it’s crucial for employers to create an open and transparent relationship with their employees to improve engagement and understand how to better meet employee needs.”

Additionally, men (61%) are more likely than women (46%) to think their company pays employees fairly, furthering the gender divide, and just a third (33%) of employees would be willing to take a pay cut to create equal pay within their company.

Above all else, employees want to know they are fairly paid for their specific role. More than a third (37%) of employees are interested in understanding the average compensation for every position at their company, compared to every member of their team (21%), CEO and executive compensation (17%), and compensation by demographic (7%).

“The pandemic has reversed significant progress made in pay equity over the past decade, and it’s critical employers act now to advance equal pay in 2021,” Jansen said. “Achieving fair compensation for all begins with implementing pay transparency to share how compensation decisions are made.”

Consider employees’ top needs in compensation strategies

When it comes to retaining employees, employers should look to not only what will make them stay, but what might make them leave, and address those issues as an immediate strategy.

When asked what benefits would make employees consider switching jobs, if offered by another company, top responses included:

  • Ability to work remotely post-COVID (77%)
  • Unlimited paid leave (77%)
  • More flexibility in working hours (76%)
  • More pay transparency than their current company provides (51%)
  • A built-out DE&I (diversity, equity, and inclusion) strategy (48%)

Additionally, while just over half (51%) of employees said their company implemented a new or updated diversity and inclusion plan in 2020, less than half (48%) said it included an equal compensation strategy.

Provide parents with needed resources to succeed

It’s clear that parents have taken on a major burden through the pandemic, balancing homeschooling, childcare, and work — and not all employers haven’t delivered solutions to help working parents succeed.

Less than a quarter (24%) of working parents were offered new childcare subsidies during the pandemic and less than a third (29%) received an increase in paid leave. Additionally, nearly half (47%) were forced to cut down hours (and thus pay) to manage childcare, and more than a third (39%) considered leaving the workforce altogether.

This lack of action in helping parents manage their new responsibilities has had career consequences as well. Nearly half (48%) of working parents believe their path to promotion has been negatively impacted due to managing childcare and more than half (52%) believe their ability to receive a pay raise has been negatively impacted for the same reason.

This lack of support may be why the share of parents in the workforce has decreased during the pandemic; it could spell economic trouble down the line if employers don’t provide solutions.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

This article is from Inc.com

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