Dive Brief:

• Nearly 3 in 5 employers conduct pay equity reviews to pinpoint pay differences that are possibly unrelated to job factors, according to a report from the Society for Human Resource Management.
• Practices such as pay equity reviews inspire trust in HR professionals, the organization found. Compared to HR professionals whose organizations don't look for discrepancies, HR pros at organizations that initiate such reviews are nearly twice as likely to say they're confident their records can explain a pay difference during an audit.
• Organizational trust is boosted by transparency, in addition to pay practices. More than 90% of respondents who said they felt their organization is transparent about pay decisions said they trust their organization decides pay without regard to gender, race and ethnicity. Forty-nine percent of respondents who said their organization lacks transparency said the same. SHRM surveyed more than 3,000 individuals, managers and HR professionals in June and July 2021.

Dive Insight:

HR professionals are beginning to see pay equity and pay transparency as necessary, but organizations aren't living up to their expectations. While 9 in 10 respondents said it's important for organizations to be transparent about pay methodology, less than half said their organization is.

SHRM's survey and accompanying analysis pointed to ways pay disparities can harm workers and disrupt workplaces.

First, it highlighted findings from PayScale's 2021 annual wage gap report. The report found that women with the same job and qualifications earn 98 cents for every dollar earned by men. It also found that Black women and Black men earn 97 and 99 cents, respectively, for every dollar earned by White men.

"While a few cents may seem trivial, it could mean the difference between thousands to hundreds of thousands of dollars lost over workers' careers," SHRM said.

Pay disparities damage more than paychecks, the survey found. About a quarter of workers surveyed said they have been in a situation where they discovered someone of a different gender (23%) or race or ethnicity (19%) was paid better, even though they performed the same job with the same level of experience. Of those who had this experience, 42% said they found out about their wage difference through workplace gossip.

Pay gaps spurred some respondents to take action. About 1 in 5 said they started talking to other employees about their pay difference. And more than a quarter said they started searching for a new job.