In this episode of Honest HR, host Amber Clayton speaks with SHRM CHRO Jim Link about the importance of pay equity and ensuring fair and equal pay practices for all employees regardless of gender, race, age, or other protected characteristics, but also the business case on why pay equity is in an organization’s best interest, and above all, the steps you can take toward achieving pay equity at your organization.
Occurrences of unequal pay between employees with the same qualifications, experience and job responsibilities continue to have a problematic presence in the workplace, and likewise reflect longstanding wage gaps between men, women and people of color. In this episode of Honest HR, host Amber Clayton speaks with SHRM CHRO Jim Link about the importance of pay equity and ensuring fair and equal pay practices for all employees regardless of gender, race, age, or other protected characteristics, but also the business case on why pay equity is in an organization’s best interest, and above all, the steps you can take toward achieving pay equity at your organization.
SHRM's Managing Pay Equity Toolkit
This episode of Honest HR is sponsored by UKG.
Speaker 1: This episode is sponsored by UKG. UKG offers HR, payroll and workforce management solutions that support your employees to make your fairytale workplace a reality.
Monique Akanbi: Welcome to Honest HR, the podcast for HR professionals, people managers, and team leads intent on growing our companies for the better.
Amber Clayton: We bring you honest, forward-thinking conversations and relatable stories from the workplace that challenge the way it's always been done, because after all, you have to push back to move forward.
Wendy Fong: Honest HR is a podcast from SHRM, the Society for Human Resource Management, and by listening, you're helping create better workplaces and a better world. I'm Wendy Fong.
Amber Clayton: I'm Amber Clayton.
Monique Akanbi: And I'm Monique Akanbi. Now, let's get honest.
Amber Clayton: Now, let's get honest.
Wendy Fong: Now, let's get honest.
Amber Clayton: Hello everyone and welcome back. I'm your host, Amber Clayton, Senior Director of SHRM Knowledge Center Operations. In our episode today, we're going to discuss the technical competency, HR expertise, employee and labor relations. This year is SHRM 75th anniversary, and we are focused on driving change. Today, we will discuss how to drive change when it comes to pay equity. This podcast is approved to provide 0.5 recertification PDCs, but only if you listen to the full episode. I'm sure many listeners out there can relate to this situation. You take a new job, you're offered what you think is a competitive salary, and then you find out later that your male counterparts were brought in well above what you were offered. You don't understand. You don't necessarily know what to do, and today, we're going to tell you what to do with this information. I'm pleased to be joined today by SHRM's Chief Human Resource Officer, Jim Link. Welcome to the show, Jim.
Jim Link: Hi, Amber, and hello everyone. I'm super excited to be here today. This is a great topic that we've chosen and I'm looking forward to discussing it with you, Amber.
Amber Clayton: Great. Great. Well, Jim, for our listeners who don't know you, if you can provide just a little bit of background, how long you've been with SHRM?
Jim Link: Yeah, well, Amber, I've been a SHRM member for more than 30 years and SHRM certified for almost 30 years at the senior level professional. So I am super excited to be a part of the SHRM family now as an employee, after being a member and a foundation board member for so many years, it's nice to be on this side of the story, to talk more and to share all of the great work that SHRM does with the human resources and business community.
Amber Clayton: Great. Yeah, I felt the same way when I came on board with SHRM. I'd had many years of experience in HR, and when I came to SHRM I felt like, wow, I'm at the pinnacle of the HR. So I was real excited to be a part of SHRM and on that other side of it. So I would agree with you.
Jim Link: Yeah, me too. Me too. Super exciting to be here, and thank you for the opportunity to talk with you today about this great topic.
Amber Clayton: Yeah, absolutely. So now that our listeners have gotten to know a little bit more about you, let's go ahead and get started. This situation I described where a woman was paid less than a man is a common issue known as pay equity issue. In case you don't know, pay equity is the practice of ensuring fair and equal pay practices to all employees regardless of gender, race, age, or other protected characteristics. According to the National Committee on Pay Equity, "Because women earn less on average than men, they must work longer for the same amount of pay. The wage gap is even greater for most women of color. Pay equity has been an issue for many years. The US even has a day to recognize how far women have to work to earn what men earn called equal payday, and that falls on March 15th of every year.
According to the same committee, equal payday was originated by the National Committee on Pay Equity in 1996 as a public awareness event to illustrate the gap between men's and women's wages. It was originally called National Pay Inequity Awareness Day and change to the more simplified Equal Pay Day in 1998. SHRM recently conducted research on this topic, and Jim I know has some information to share on it. So let's start with what's happening now. Jim, can you kind of talk a little bit about the status of pay equity in the US right now?
Jim Link: Yeah, absolutely, Amber. This is a topic that we're hearing more and more about here at SHRM, and fortunately it's also an area where we've done significant research related to the whole area of what I call the ecosystem of rewards. So it's just not pay equity, it's pay transparency, it's the value of benefits and perquisites and all of those other things which really make up a total pay package for an individual. But today, I know we want to talk more about the pay equity piece of it, so we'll be talking both about that, but also sampling in or sprinkling in other pieces there to help people understand what the broader picture of pay equity looks like. If you think about this around what traditionally is thought of as pay equity, the first thing that we tend to look at is called the pay gap. And people often ask me as the head of human resources if there's a wage gap or a pay gap that still exists out there between men and women to start with.
And the answer to that question is yes, unfortunately, there absolutely is still a pay gap that exists. And depending upon, Amber, whose statistics you believe, that gap can be anywhere from 65 to 66 cents on the dollar being the comparison between what women are and what men are up to as little as not that anything's acceptable, but as little as 87 and a half to 88 cents on the dollar. So obviously, we would like for that to be no difference between those two. And there have clearly been strides made in recent years to decrease that gap. So it is improving. It's not improving at a pace that any of us would prefer, but clearly we are seeing progress in this space of pay equity gaps between men and women in the workplace.
Amber Clayton: And you actually answered my next question about whether or not it has shrunk or it's gotten wider over the years, and I think we know that it's actually shrunk, but again, not to the rate that we would like it to shrink.
Jim Link: That's exactly right, Amber, and now the pace of that change, the pace of the improvement has gotten better over the years. And interestingly, the pandemic, the COVID crisis actually saw us speed this up just a little bit, and a lot of that may be driven also by what we're seeing happening right now in the labor force. We all know that there are generally about two jobs open for every unemployed person in the United States. There's a significant skills gap. We know that there are more women now in colleges and universities than there are men. So improving those skills and bringing those women into the workforce and more importantly, keeping them in the workforce, which we saw some problems with during the pandemic, of course, will actually help that transition and that change toward a better pay equity environment overall as we progress into the future.
Amber Clayton: Yeah, absolutely. One of the things that I've heard about, and I've read and I've talked to people about is that men are better salary negotiators than women. And that might be the reason why there's a pay gap between men and women is that when men have come in, they've negotiated higher salaries, maybe better benefits the women have. Do you find that that is a true statement, or what is your perspective on that?
Jim Link: Amber, historically, that has been the case. Men have been better negotiators of particularly coming into the organization from the beginning, so better at negotiating pay and perquisites and actually establishing themselves in that marketplace or in that workplace at a higher rate than women who are doing the same work. That's how we've evolved into this pay equity issue in the first place in many cases. So yes, there is some truth to that and some research has certainly backed that fact up. However, what we're finding more and more now is that organizations are responding to that known fact in some very interesting ways. And one of the ways that I've seen organizations respond to the fact that men may be better negotiators is they are manning that their compensation and their hiring manager teams make a one-time firm, fair, consistent offer to all people, male, female, tall, short, Black, white, any other category you want us put people into.
And what the following belief is relates to the fact that if you make that one-time firm, fair offer, then the people who aren't as good at negotiating will see that the opportunity to be paid at the same level as those who might have been better negotiators because the negotiation point isn't going to be allowed. So we'll see, now that's a relatively new change that we're seeing out there among some of the more progressive companies, will have to see over time how that manifests itself in actual improvement of the pay equity issue in those organizations. I love the story that organizations are thinking of unique and exciting ways to address this pay equity issue.
Amber, it wasn't that long ago. Matter of fact, at SHRM's last inclusion conference out in San Diego in the fall of 2022 where I was on stage with several senior leaders in very respectable companies in the United States, and for the very first time in my 30 plus year career as a human resources professional, there was a senior leader sitting to my left who said to a room of 550 people that particular company that their company had achieved pay equity. And that was a huge pronouncement, a huge statement to make in front of that many people. Honestly, even if I thought that I was a CHRO sitting in an organization on a public stage like that in a publicly traded company that had achieved that level, I would've been a little squirrelly about saying that out loud, right?
Amber Clayton: Yes.
Jim Link: I mean, I honestly would've been, but obviously she was confident in that pronouncement. And when I noticed that after that particular section of our program was done, she was swarmed by people who were asking her, how did we get there and how did we achieve that? And she was full of the information, much along the lines of the same things that you and I are talking about how you get there that they had done. And it was exciting to hear that and to see that. And I just thought it was a huge movement or moment rather in time whenever a sitting ahead of human resources could say that from a stage in a public audience like that, it just goes to show you how important it's now for the future.
Amber Clayton: Yeah, absolutely. And now, did that individual actually provide some information about how they got there on stage, or was it more just individuals when they came up to her?
Jim Link: It was more of the latter, but there were some general things that they had done. One is they had, first of all, done their homework in that particular organization to understand even amongst their own population what had caused those pay equity issues in the first place. And a little bit of it was related to how they viewed people coming into the organization from the start. So they had to look at early career professionals and ensure they were doing the right thing across the board for those professionals. And they were a multinational company with primary operations in the United States. So they first began by looking at an individual location, and then they went into a region and then they went to a geography, and then they went nationally to understand what those differences were and how that they could be impacted.
So they really took a very surgical approach to understanding what was causing that pay equity or that pay inequity in their organization and then approached it and it took them years. This was not a solution set that was solved in even a year or two. It was something that took them a great amount of time to do, but it was a very focused effort in that organization to achieve that pay equity. And this is an organization that has a female CEO and a female head of human resources as an example. So you can understand why it was important for them to ensure that this was something that they fought to achieve in their specific company.
Amber Clayton: Yeah, that is actually great. I was reading an article in Bloomberg report, it's called Transparency and Gender Equity Disclosures is Rising, and it stated that "More than 600 organizations across 50 countries revealed their gender related workforce data in Bloomberg's 2023 Gender Equality Index report representing an 11% increase in disclosures over the previous year." They were scored on things like talent, leadership pipeline, equal pay, gender parody, inclusive culture, anti-sexual harassment policies and external brand. I just found it to be really interested that it mentioned that companies voluntarily disclose gender metrics and that they're sharing it with their investors. And for those individual companies that are voluntarily sharing this information, they are becoming more competitive in the market. People want to work for these companies, the investors want to work with these companies that are focused on equal pay. So I thought that was really interesting because it's part of the talent acquisition strategy, and right now, many employers are still facing labor shortages since the height of the pandemic.
Jim Link: Yep. You're absolutely right, Amber. And let's be clear, you cannot effectively talk about pay equity without also talking about the broader ecosystem of total rewards. And one of those things where we've seen a lot of action in the last few years has been around what we typify or what we label as pay transparency. And at SHRM, we do a lot of research related to pay transparency because it has an impact on just those things you were describing, Amber, the ability to track, retain, engage, excite, motivate, drive people to a result in an organization, has a lot to do with how authentic and transparent. They believe that organization can and should be in all things related to their livelihood. And of course, a piece of that clearly is pay. Now, we don't believe it should just be related to pay itself because it's also equally important that we understand that in those places where you're required to talk about pay in your organization, it's usually base pay only.
And base pay only is only one piece of a broader story of how we should think about how an employee is rewarded in the workplace. It should include many of those things that you talked about a little bit earlier, how you're hired, how you're promoted, how you're taken care of, how you're benefited, the perquisites that come along with that, if there happens to be an incentive compensation component to that. All of those things are tied into this broader picture of how we think about the total rewards systems in companies and organizations. So yes, pay transparency goes to a certain point in ensuring we have the capability to understand how a job is base pay in an organization, but there's so much more to that. We know, for example, that in our own research here at SHRM, 42% of human resources professionals who were surveyed said that their organization operates in a location that requires pay ranges to be included in job postings.
We also know that when it's not required by law, however, more than two and three or about 67% of HR professionals say their organizations already voluntarily list the starting pay in their job postings. And it sometimes do that even for positions that are even very senior level in their organizations. Even more important, 32% of those same organizations began including pay information in their job postings within the past year. So we know that this is a more timely current thing that we should be talking about, and we know that this signals in some way that some employers may be thinking or planning ahead in anticipation of what they may see coming down the pike in their own state or municipality related to pay transparency.
So listen, this is an evolving, moving thing that we're at SHRM are paying a lot of attention to right now. And we know that pay transparency helps with pay equity. We know that there are many other things that also impact pay transparency and pay equity, and we really call on supervisors and leaders and managers and organizations and companies themselves to think about how they want their organization to be viewed by potential employees, by shareholders, by stockholders, by others as an equal pay or equitable pay type of organization. And this research only confirms the fact that this is a very, very important part of what the future of business looks like in America.
Amber Clayton: Absolutely. And this is not necessarily based on research, but more anecdotal as we hear members or employers say, I'm concerned about putting my salary ranges on job postings. What's going to happen with the employees who are currently employed and they see that and they think that they're underpaid? There's definitely some concerns. But on the other side of it, I see it as people will be able to see what those jobs are offering as far as pay and make a determination as to whether or not they want to apply for those organizations. You're really saving yourself time and they're saving their time if it's not what they want. So I think that having that pay transparency is really actually a good thing. And I believe our research, and correct me if I'm wrong, there was research that indicated that there was a higher percent of applicants as a result of the pay transparency, the voluntary pay transparency.
Jim Link: Amber, you're exactly right. And we know that this pay transparency and pay equity focus is changing behaviors, and that's what's critically important. And it's changing behaviors of two groups, employers and employees, and here's how we know this. First of all, if you are a person who's in a company or organization, when we ask you what we know that listing pay ranges on job postings does, we know that for the employer, 70% of organizations say that posting those pay ranges on their job applications has led to more people applying. So already, we see improvement in the quality and volume at least of people who are applying for open positions in organizations. We also know, Amber, that 66% of organizations say that having those pay ranges on their postings has increased the quality of those applicants. So 70% volume now, 66% on the quality of those applicants, and we further know that 65% of organizations who post those ranges on their job postings tell us that it makes them more competitive in attracting top talent.
So if you're on the organizational side, you've got some overwhelming statistics now supporting the idea, at least according to those people who are doing it already, that they're getting better volume, they're getting better quality, and it makes them more competitive in attracting people into the workplace to start with. Now, that's the employer. Now, let's look at the employee side. If you're on that employee side, and this is what you were alluding to, Amber, in the question you asked me earlier, 82% of US workers, now this is US only in these stats, but we can assume that there probably is some way you can extrapolate these findings on a global basis as well. We'll let the professionals do that, but 82% of US workers are more likely to consider applying to a job if the pay range is listed in job posting, 82%.
I mean, that itself is an overwhelming statistic and a reason why employers should definitely think about this in their organizations. We also know that 74% of those same workers say they're less interested in applying to jobs that don't list the pay range. So 82% favorability, 74% basically unfavorability. That's an interesting statistic as well. Another way to look at that same data. We also know, and this is important as you're thinking about building cultures of openness and transparency and agility in your organization, Amber, we also know that 73% of US workers are more likely to trust organizations that provide pay ranges in job postings than ones that don't. Now, if you're a chief human resources officer, you know that the development of a great workplace culture usually rest on your shoulders. And so you've got 73% of people telling you that they trust organizations, trust is a vital component in the development of any culture.
And at SHRM, we talk about cultures of belonging, cultures of collaboration, cultures of learning, and cultures of innovation. And we know that when you put those four together, you get fantastic outcomes. So knowing that you're more likely to trust an organization, which is an essential component of any cultural component, certainly builds out an outcome for an organization that will lead to better business results, better employee engagement results, better shareholder returns, and all other kinds of measures that have been looked at over the years. So lots of data and numbers there to support employers and employees who are focusing on at least pay transparency in job postings and the like to help with this pay equity problem that we're talking about.
Amber Clayton: Yeah, absolutely. So the ones that I mentioned that are still leery because they have current employees and they're concerned about putting these ranges out there, what type of guidance or suggestions would you have for those particular employers?
Jim Link: They're going to be pressured into doing this just simply because the world is moving in this direction. There are already state laws in many places that require this. We see that trend growing, not slowing down or even stabilizing. It's growing. So employers would be well advised to start doing a deep dive in their own organizations to think about how pay should be looked at and viewed. And remember, it's not just pay, you as an employer have a bigger story to tell about all things related to your workplace, and that includes your total reward offerings and the way that you think about attracting employees, promoting employees, giving employees learning and development opportunities, providing career experiences for those individuals. There's more to the total work pitcher than just pay, but understanding how pay is a centralized component in at least getting people to look at your roles initially is something you can't forget.
And listen, if you are worried about what would happen in your organization if you posted those jobs, then the way to think about that is to do a lot of homework and a lot of deep analysis on your current pay structures and pay analysis and the way people are rewarded, and then work with outside experts or mentors or coaches in this space to help you think about how to address this going forward. My encouragement to those senior leaders and organizations that have some fear of doing this is to do your homework. Because once you start understanding what's required and where you are in the greater marketplace, you might not have the problem that you think you have anyway.
I've talked to a couple of organizations who were a little fearful about approaching this, and when they actually started digging in to look at how they were rewarding people, particularly on that base pay perspective, they weren't in a place where that they thought they might be on the positive, meaning that they were better off than they thought that they might be just from an initial peak. So homework is essential. There are experts out there who really can help with pay equity. And let's face it, if we can address this in corporate America or in governments or anywhere where that people are paid, we're going to solve some larger societal issues that have been haunting us for a very, very long time, which is how we started this conversation, Amber, by talking about wage gaps and disparities in the first place. We know for example, that it's just not women who suffer from pay equity issues in the workplace.
We also know that it applies to people of color and it applies to people of different ages as well. We know there's also some ageism in the pay systems and pay structure issues in most of our companies. So getting a systematic, thoughtful, well researched and well homework based approach to solving this problem in an individual company is solving potentially a larger societal problem as well. And we shouldn't lose sight of that, that taking a bite of this in one organization, large or small, helps address bigger problems that we are facing in our country. And I love the idea that we as human resources professionals can make a difference in that way.
Amber Clayton: Yeah, absolutely. And something on that same topic is I've heard we're concerned about salary compression where new hires are coming in close to or hitting or over salary of tenured employees. And for those employers, some employers are addressing this by adjusting the salary, they might be conducting off cycle adjustments, maybe providing a cash bonus, higher merit budgets. But like you said, it's really about doing your homework and building that compensation philosophy, the compensation structure, communicating that to employees so that they understand what's the criteria and how do they compensate people? Where do we fall within the range? Why do we fall within the range? All of those things is part of being Transparent in building that trust with the employees. So it's not just the trust of the people who are coming into the organization or applying for the organization, but it's also for the people who are there and employed and they want to be able to trust that they're being paid fairly. And the way that they'll do that is through communication, communicating what their compensation philosophy is and what their salary ranges are.
Jim Link: That is absolutely right. All of those things that you mentioned are the right things to do in organizations, and you are right, the skills gap in America particularly is certainly leading to wage compression issues, particularly in the early stages of one's career. There are skills and competencies out there today that employers are hiring for, which have a more valuable place, more value in the workplace today than they did two or three years ago. That's creating some disparities where that new people coming into organizations may be paid at or even above what current employees in that organization are doing. We know that, we see that, it's not unique to any one group or company or industry or even region, and employers and particularly human resources professionals within those organizations are grappling with that issue. And let's face it, the pandemic made it worse, because when you think about what skills were available out there, the great resignation or the great reconciliation or whatever it is that you want to call it these days, there's also an idea that employers should be thinking about novel and new and exciting ways to address those compression issues.
And we're seeing some really interesting stuff, a lot of it tied to giving people new experiences to giving those employees who may feel like they're impacted by those wage compression issues, unique opportunities and organizations to do things differently. We're seeing employers come in and say, look, we understand this as an issue. We want to be transparent about it, and we pledge to address this over the course of the next 6, 18, 24 months. Whatever their solution set might be. I don't think, Amber, a one size fits all solution set is appropriate here, but I would encourage specific employers to again, understand where do those compression issues are occurring to address it with those people who are impacted in their organizations and to say, look, we get this. We understand it. We are committed to addressing it.
It's not feasible from a financial perspective for us to do this all at once or overnight, so bear with us, here's the plan. And if you can say that with a high degree of confidence and capability, assuming of course the economic conditions allow you to do what you've committed to, then that does go a long way toward addressing wage compression in the workplace today for all people, not just women or people of color, but for anyone who's coming in who might be impacted by that, particularly that skills compression that we talked about a little bit earlier.
Amber Clayton: Absolutely. And you talked about the total compensation package and how benefits play into this as well. And I've done some presentations for other companies and we've talked about this, and when you're looking at your compensation, your benefit package, your total compensation package, you want to customize too. You want to look at customizing things because salary may not be the most important to everyone. There could be benefits that are more important, like the flexible work schedules or the professional development. So when you are thinking about your packages and what you offer to your employees and to the candidates coming in the door, look at those things as well. Look at customizing it based on your employee population because I think that goes a long way.
Jim Link: Amber, you're absolutely right. And it wasn't that long ago that our own surveys were telling us that the most important thing that you could do to attract a person into a workplace was to offer flexibility and agility in the work structures and work systems. Pay wasn't the number one, it was number two. Now, it's always in the top five. Let's be clear. Any survey, yeah.
Amber Clayton: Absolutely.
Jim Link: Absolutely. Any survey I've ever shown or seen says that it's in the top five, and particularly during the pandemic and even now for younger employees in the workplace, flexibility and agility in many of these surveys that I've seen out there, it ranks as high or higher than pay, at least for certain population groups. And you're right, it's important not to overlook or gloss over the idea that it's an ecosystem in the workplace. And that ecosystem is comprised of many components of which pay is just one of them. It's just one. And we move the idea of flexibility and agility in the workplace forward 20 years in the space of two years, and thanks in no small part to the COVID crisis. And let's face it, employees are not going to let us forget that. So employers are thinking long and hard now about how to offer that ecosystem in such a way that it's inclusive of pay equity and pay transparency, but includes many, many other things which are as important in some surveys to particular groups of people coming into the workplace.
Amber Clayton: I think that some employers, when they think about flexibility, they're thinking about remote work or hybrid work because that's been the top topic over the last couple of years. But flexibility can be things like just allowing your employees to leave earlier, come in late when they need to. It could be providing an extended break time. It could be a day off here or there, or maybe it is teleworking a couple of days a week. But there's many ways to be flexible. And I think for the most part, people want to be able to know that they can come to an employer and if they need that time, they can get that time. And I think often, they don't feel like they can, they feel like they'll either be penalized or they'll come back and they'll have loads of work or it's going to be frowned upon if they take time off. And employers need to have that empathy. They need to be empathetic to understand what's happening with their employees and what type of flexibility they might need.
Jim Link: That's all right, Amber. And we learned something in the last three to four years that's vitally important. We learned that employers can create two types of cultures. They can create a culture of engagement and excitement and anticipation of the future for their companies, or they can create a culture of burnout and there's not a lot in the middle. So what I think we're focusing more and more on is helping employers understand that the culture they create, whether it's about flexibility or where, why, how and when work gets done or what have you, those things are vitally important to the future success of an organization. And they're even more important to how you are viewed by current employees and potential employees in engagement surveys, in reviews for third party sites that are looking at outcomes and ratings of how you are as an employer. But companies that focus on cultures of learning, cultures of achievement and producing an outcome often are focused on those things and are less focused on how why, when or where that work gets done.
And we're seeing more and more of that transition. I think that's going to continue to occur. We are encouraging employers to look at where possible a hybridized approach, what we call a structured hybridized approach to work. And I get it. I understand that, that many employers and senior leaders in organizations want their employees together in the name of collaboration and cooperation and innovation and entrepreneurship. I get that, totally understand it. But there are ways to achieve that and still demonstrate that agility and flexibility in other ways in the workplace. But as leaders in our society, as employers in our society should find that way to that happy middle ground, and it's achievable, no doubt in my mind.
Amber Clayton: Absolutely. We talked about the employers who voluntarily post their salary ranges and their positions. As we know, there is an increase in the pay transparency laws by state, and some people may not realize this, but there are states that have bans on asking about salary history, and that was in part due to the wage gap and if employers were having people come in and they were bringing men that the rate that they were being paid previously or maybe a little bit more. Again, historically, women have been paid lower. So that just continues that pattern of them being paid less than men moving forward.
So not only the salary history, the pay transparency, but we're also now seeing the reporting laws with the EEO, the Equal Employment Opportunity Commission. And some employers and contractors are going to not need to actually post what their pay wages are. So I bring that up because for employers who are on listening to this right now, be sure to keep track of what's happening in your localities, your states, especially if you're a multi-state employer, because there may be these changes coming up within your areas that you'll need to comply with and understand. So I just wanted to share that with our listeners.
Jim Link: Yeah, Amber, you're absolutely right. And as we talked about a little bit earlier in this podcast, we don't see this slowing down. The argument's going to be, are you more competitive as an employer in a state that requires pay transparency or in a state that doesn't? I think I know where that's going to land. I have a hypothesis there, and I mean, let's look at our own research, Amber. So we know based on SHRM research that nearly three and five US companies who voluntarily conduct pay equity reviews, we know that they do that purposefully and with a mindset that there's homework to be done and an understanding to be gained there. Of those organizations that do those, those three and five organizations that actually do those pay equity reviews, a whopping 83% of them adjusted employee pay after the audit or after that review. Now, if that doesn't tell you that there's a problem to be solved in at least in those companies that are looking, then I don't know what does, 83% actually went in and did that.
Now, it only makes sense then that if we're trying to address this pay equity issue for women, people of color and other groups, there's smoke here, and wherever there's smoke, we need to go in and extinguish those flames. That's exactly what these employers are doing who are voluntarily doing this before they're mandated to do so. So I'm encouraging everyone to work with outside professionals. There are compensation leaders out there and audit professionals who can actually help you understand where you would stand or where you would be positioned and should make changes before you're forced to do that. So I love the idea of employers who are progressive enough and are actually interested in what this outcome would be so that they can get ahead of this curve and understand how to impact their own workforce before they're required to do so.
Amber Clayton: Absolutely. And so for those people who are applying for positions that the companies don't post their job salary ranges, any advice to give to them on how they can ensure that they're receiving fair pay when they're going to apply for these positions and looking at the offers, any suggestions on how women or people of color could ensure that they're getting a fair pay?
Jim Link: Yeah. Well, before I answer that question, Amber, let's look at the stats, right? Because we know that there's an issue here. Nearly 20% of American workers don't trust that their employer pays people equally for equal work. So we've already got a problem. 20% just have a negative view and don't believe that that's there in the first place. If you're a woman, you're even more likely than men to say that they don't trust their employer to pay equally. And if you are a person of color, you are even more likely than white people to say that they don't trust their employer to pay equally. So we already have an issue here to start with. Now, with that being said, the question that you really asked me is, now that we know this, what do you do? So the answer is very clearly for anyone who's attempting to go into an organization in a new job where that pay scale is not known or not posted, first of all, it's to do your homework.
There is so much information that's available online or from our resources, most of it free or at very, very low cost for you to be able to make those determinations about what pay should be for specific roles. Now, when you look at that, remember, pay is targeted because of the skills, experiences, competencies and capabilities that that employer is looking for. So the better able you are to demonstrate line by line in that job description, the skills, experiences, competencies, and capabilities that you have to do what that employer's looking for, the more of a demand you can place on what you should be paid for that particular work. Most people don't do that. They don't take the time to compare and contrast line by line what it is that they need to do or what they can do to convince that employer that their skills, competencies, and capabilities warrant or merit a specific particularly base pay, right?
So do your homework and be ready to talk your talk and walk your walk because you have skills and capabilities that employer wants them. Remember, there is still two jobs open for every unemployed person out there in the United States anyway, and that gives you a significant advantage if you're an employee. It is an employee-friendly market and the balance of power between employees and employers in the workplace, even though we see layoffs today and we see things happening out there is still in favor of the employee. Let's face it, particularly that employee is mobile and willing to do things like move or to change industries or what have you in order to secure a new role. I also encourage those who are seeking jobs to find a mentor, to find a coach, to find a trusted person in that organization or in another organization who can just provide a third party view for them on what they're asking for, what they're seeking, and how they should approach that particular employee or employer.
I know for example, I worked with a job candidate who was looking at a chief human resources officer role in a company lately, and we talked for hours about the best way for this particular job candidate to approach the market for that person to get paid what they deserve to be paid. And it wasn't an easy process. It went back and forth a couple of times, but I can tell you that job candidate, when the job was accepted, I felt very, very good that I had helped that person get what they deserved. And I also have thought many times what that person would have gotten if I would not have been involved. So there is opportunity there to help others, particularly if you've walked in this pathway before or you have some knowledge about how it should go. My view is to seek out those individuals who are willing to help you to listen and to help you tell your story with that potential future employer.
Amber Clayton: Jim, does SHRM have a position on pay equity, pay transparency laws, or anything that might be related to that?
Jim Link: Amber, you bet we do. We understand that equitable pay is certainly critical in creating the types of workplaces that we all want in our society. We research this topic, we understand it, and we also believe that policy proposals that stifle human resources professional's ability to reward employees based on a business factor such as education or qualifications or skills or relevant experience don't adequately address this issue. So what SHRM does is we continue to work with policy makers to ensure employers have the flexibility to base pay decisions on their own very unique and legitimate business practices, while ensuring everyone is equally compensated based on their work.
Amber Clayton: That is great. Well, that seems like a good place to end. It's really good information that you provided to us today, Jim. Is there anything else that you think our listeners should know before we end the show?
Jim Link: Well, first of all, Amber, thank you for the opportunity to chat with our listeners today about this important topic. I encourage all of our SHRM members out there to go onto the SHRM website and look at the research that's available out there regarding pay equity and pay transparency. This is an important topic for SHRM. It should be an important topic for you as an employer or as an employee. And we encourage you to get smart on the topic because more changes are coming in this space. And SHRM will be there leading the way with knowledge and research to help you along the way as we change and grow in our society and in our organizations for the betterment of the world of work, workers and the workplace.
Amber Clayton: Thank you, Jim. And with that, we've come to the end of our show. Jim mentioned that we have resources on shrm.org. One of them is a toolkit called Managing Pay Equity. We also have a HubPage dedicated to pay equity resources. You can also contact SHRM Knowledge Center and ask one of our HR advisors for assistance at shrm.org/hrhelp. Thank you again, Jim, for taking part in this episode. And as for our listeners, this podcast is approved to provide recertification PDCs, but only if you listen to the full episode. After you've listened to each part, you are eligible to enter this activity ID 24-US5X3, and that again is for 0.5 recertification PDCs in your SHRM certification portal.
If you haven't already, please subscribe so you'll never miss an episode. And be sure to rate and review the show wherever you listen to podcasts. Feel free to reach out to me. You can find me on LinkedIn and Twitter. And if you'd like to learn more about the Honest HR podcast, about myself or the other host, or to get additional information and resources on what was discussed in today's episode, head on over to shrm.org/honesthr. And to learn more about other SHRM podcasts, check out shrm.org/podcast. Thanks again for joining us on Honest HR.
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