6 Reasons Why Pay Equity Matters

By MBO Partners | March 21, 2023

Share
Pay equity

Key Points

A strong commitment to pay equity across your total workforce is a competitive factor in today’s market.

Paying fair market rates when engaging independent talent can positively impact the bottom line for a number of reasons.

Different companies will implement pay equity strategies differently depending on their strengths and opportunities.

Pay equity, the practice of compensating workers in similar roles with comparable pay regardless of demographic factors, is a legal requirement in most states for full-time employees. The Great Resignation has led to a worker-driven market, and a strong commitment to pay equity across your total workforce is a competitive factor in today’s market.

How Pay Equity Counts

Paying fair market rates when engaging independent talent can positively impact the bottom line for a number of reasons, including:

High Talent Quality

The quality of talent you attract can be increased when pay equity is part of a company’s values. Fair compensation joins other factors that make a Client of Choice for independent talent.

Increased Trust

Knowing that a client is committed to equitable pay rates and conscientiously stays up to date with the market can be a huge influencer on an independent professional and a factor in creating a strong relationship.

Higher Productivity

Top-quality talent with strong trust in the client creates a worker experience that can put results into high gear.

Decreased Talent Turnover

Pay equity is a key factor in successfully re-engaging independent talent. In a scenario where the work experience is comparable between two clients, a contractor will likely opt for projects where commitment to equitable pay is part of the culture.

Competitive Advantage

Commitment to pay equity supports creating a robust talent network of high-value independent professionals who continue to engage with you.  This can give you a competitive advantage in attracting high-quality talent and in improving your market position.

Increased Diversity

As with employees, taking away demographics and offering comparable pay across the board can increase diversity in your workforce, which brings its own business advantages.

Making It Stick

Achieving pay equity is not a one-and-done activity. Making it part of your talent strategy requires ongoing commitment. Focus on your organization’s needs and opportunities available to independents and implement practices that will ensure equitable compensation. For example:

  • Set role-based rate ranges to ensure contractors doing similar jobs are comparably paid.
  • Include roles filled by independent talent in compensation review cycles to keep rate ranges current.
  • Consider including other allowable forms of compensation in your strategy (e.g. bonuses, stock equity).

A pay equity strategy is not a cookie-cutter exercise. Different companies will implement strategies differently depending on their strengths and opportunities. For example, a company working on attracting talent from underrepresented groups may decide to implement a training program around unconscious bias. Another company focusing on transparency may decide to  include information about rates and compensation policies in communications to its talent work. Where you start depends on where you are now.

 

Related Posts

Addressing Unconscious Bias in Your Direct Sourcing Program

A total talent strategy focused on workforce optimization is designed to include a specific percentage of independent professionals with high-value skills. Success relies on creating a direct sourcing program that curates an independent talent pool of vetted workers. Hiring managers can tap this pool to fill project and team roles with proven workers who have…

Read More...

Before You Make a Job Offer: 4 Things to Know about Independent Professionals

As independent professionals become more centered in the economy and take more strategic roles in their client companies, it would be unusual if managers didn’t consider offering full-time employment to valued independents on their teams. “Locking in” such key talent can be important to employers and might be seen by them as a win-win proposition….

Read More...

Hiring Soft Skills for Future Success: Entrepreneurship

This is the fourth in a five-part series discussing skills critical for future success.  Other articles cover critical thinking, creativity, and communication. As digital and AI technologies continue to transform the world of work, the future workforce will need to be nimble, adaptable, and comfortable with continuous change. These attributes and the soft skills we’ve…

Read More...

Trending

Tags

Learn more about the MBO Platform

FOR INDEPENDENT
PROFESSIONALS

Start, run, and grow

your independent business with MBO

FOR
ENTERPRISES

Engage, scale, and optimize

your independent workforce