6 Reasons Why Pay Equity Matters
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.
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.
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.
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.
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.
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