DENVER--(BUSINESS WIRE)--After a landmark year of sweeping pay transparency legislation in 2022, more employers view pay equity as a business imperative, but people teams don’t feel set up for success, according to new research revealed at OPEN Summit 2023. OpenComp, the leading end-to-end compensation software provider, and pay equity coalition OPEN Imperative today shared the results of their “State of Pay Equity 2023” report, which analyzes pay equity progress and identifies common barriers in closing wage gaps.
According to the survey of 500 CEOs, CFOs and HR executives at companies of less than 5,000 employees, 91% of respondents say it is somewhat or very important to address gender pay equity in their organizations, which increased 18% from the inaugural report. However, companies are realizing they lack resources to fulfill regulations and eliminate pay disparities. A staggering 70% of employers say they lack sufficient data and resources to address pay equity – a 24% increase annually.
“State and local government laws from Washington, California and New York City drove a new era of pay transparency accountability, but we see first-hand that employers’s intentions and actions are mismatched,” said Emily Sweet, VP of social impact at OpenComp and executive lead at OPEN Imperative. “These regulations put HR teams under a microscope, and failing to meet them has financial and legal repercussions that employers can’t afford. While we’re encouraged that employers are getting on board with pay equity as a concept, many barriers must still be removed to make equal pay a reality.”
Other key findings of the survey include:
- Pay equity is a business imperative: 93% of employers at least somewhat agree that pay equity is important in recruiting and retaining the best talent – a 26% increase annually – with more than half (54%) strongly agreeing. But, heads of people are 6% more likely to say it’s very important to address pay equity. HR realizes the high stakes of getting pay transparency right, and executives need to spend more time listening to ensure HR leaders are set up for success.
- Pay transparency means something different to every employer: While laws are starting to change behavior, there is no one-size-fits-all approach to pay transparency. In 2023, 9% more employers use publicized pay ranges in job postings (47%); 11% more employers share pay ranges in interviews (43%); and 16% more employers share pay information with all employees (41%) – the biggest increase from 2022.
- Many employers still fear transparency: While 52% of respondents are required to publish pay ranges in job postings, only 38% do so in required cities/states. While 35% of employers believe not publishing pay ranges helps them sidestep wage increases, doing so undercuts the legislation’s intent and will ultimately cost organizations more in fines, attrition and unsuccessful recruiting efforts.
- CEOs have their heads in the clouds: New to this year’s study, 53% of CEOs say they do an excellent job in advancing pay equity or better, when the majority of their executives don’t feel they have needed resources. CEOs need to develop more curiosity to understand their companies’ weaknesses to make progress.
- Resources still block progress: Not having a clear compensation philosophy was ranked as the most common barrier to addressing pay equity (16%), followed by leadership buy-in (15%). 48% of employers also said that having set pay ranges would also be the most useful resource in addressing pay equity.
- There’s reason for hope. Fortunately, teams are evaluating salaries and adjusting pay through pay audits or a similar practice more regularly. 96% of employers audit and adjust at least annually (up 22%), with 49% of employers doing so quarterly (up 21%).
To address these barriers and close gender pay gaps, OPEN Imperative (Organizations for Pay Equity Now) brings together hundreds of employers, investors and influencers to eliminate gender pay disparity in their organizations by 2027. Companies are best positioned to solve this crisis when business leaders enact institutional change from the top down.
To read more of the findings or request the full report, visit here.
To learn more about OPEN Imperative and be part of the change, sign up here: https://openimperative.org/.
To learn more about OpenComp’s compensation software, visit http://www.opencomp.com.
This survey was conducted using the online survey platform Pollfish. The sample of 500 individuals in the United States was surveyed between January 17, 2023 and January 18, 2023. The margin of error is 4.38% and no additional weighting was done to the initial sample. Pollfish’s survey platform delivers online surveys globally through mobile apps and the mobile web along with the desktop web.
About OPEN Imperative
The OPEN Imperative (Organizations for Pay Equity Now) is a coalition of hundreds of CEOs, investors, and business leaders. Together, we commit to ending gender pay disparity in our organizations by 2027. The OPEN Imperative was founded in 2022 by OpenComp. Join our mission at https://openimperative.org/.
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