Use Compensation Data to Build a More Equitable Company Culture

Hiring top talent in today's market is no small task. For starters, it's less likely a company will get away with low-wage offerings or lack of transparency around a candidate’s or employee’s compensation information.

A study conducted by ADP in the final quarter of 2021 showed that wages grew by an average of 4.4% nationally, and that job switchers made 8% more on average by switching roles.

Market forces due to the Great Resignation are pushing wages higher and incentivizing employees to switch companies if their own business fails to keep up. Due to a tight labor market, equitable compensation has grown even more important to attract top talent.

And employees are noticing.

In fact, 2021 through 2022 has been known as the "Quitter's Market" and the “Great Resignation,” with Americans leaving their work at historic levels. In December 2021 alone, 4.4 million people left their jobs.

While this backdrop is a difficult challenge for employers, it’s also a great opportunity to reimagine a future with better employment outcomes. That all starts with employers offering competitive, equitable, and fair pay.

Employees Value a More Equitable Company Culture

According to 2020 census data, median earnings of full-time, year-round workers still illustrate a wide gap in pay equity. Overall, women earn $0.83 to every dollar of men. The gap widens even further when broken down by race. Hispanic women earn only $0.57 for every dollar earned by their male counterparts, and Black women earn a measly $0.64 on the dollar.

These pay inequities don’t go unnoticed. Nearly 80% of employees say they want to work for a company that values diversity, equity, and inclusion. Closing inequitable salary gaps is an important step towards valuing a diverse workforce.

Real-Time Data Can Close the Gap

The best way to approach wage gaps is through objective compensation data rather than subjective judgment calls. With compensation data, your HR or People team can use data tools to compare salary ranges:

  • For similar roles
  • Within departments
  • Against current market trends

What’s more, you can use this compensation data to inform each element of a candidate’s compensation:

  • Salary
  • Bonuses
  • Equity
  • Benefits
  • Perks

Doing so will close current gaps within your company and ensure offers for new hires are fair and equitable. You’ll be able to achieve the following, for starters.

Standardize your decision making

By using compensation data, you no longer have to make judgment calls with each new offer made. Your hiring teams can all decide what to pay from the same foundations of truth, setting the stage for equitable compensation across your organization.

Accurately reflect what people are being paid today

Real-time data keeps you competitive with today’s hiring market. How so? It can show you what comparable companies are paying candidates across job titles and locations.

Real-time data can also reflect what your organization is paying across levels and bands, so you can use up-to-date internal benchmarks to inform your decisions too.

Improve transparency and trust

If you’ve standardized your approach to compensation decisions, it becomes much easier to share the reasoning behind your decisions with candidates and employees. You’ll go a long way towards improving trust as a result.

This SHRM survey revealed that 91% of employees who believe their company is transparent about how pay decisions are made also said that they trust their organization pays people equally for equal work regardless of gender, race, and ethnicity.

Download our guide to learn everything you need about upgrading your comp decisions with data.

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