The majority (82 per cent) of global employers are planning to conduct a gender pay or pay equity review in the next three years, according to a new survey by Willis Towers Watson.
The survey, which polled almost 2,000 global employers, including 88 Canadian employers, found 57 per cent indicated that fair pay is a priority for the next three years. As well, 70 per cent of respondents are considering increasing their communication of activities to promote an inclusive culture.
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However, while employers have accepted the multicultural diversity of the Canadian workforce, the survey found only 18 per cent of Canadian employers (compared to 23 per cent globally) reported having formally structured and managed programs targeted at diverse employee populations. Almost half (49 per cent) of respondents plan to or are considering upping clarity around pay decisions in the next three years.
“Employers contending with fair pay and gender gap issues should conduct a gender pay equity review, which can help them better understand if they have fair pay issues, where they exist and the underlying causes,” said Amanda Voegeli, Canadian business leader for rewards at Willis Towers Watson, in a press release. “As more organizations define what fairness, inclusion and diversity mean to them, today’s reward leaders must understand how to tangibly impact this agenda through reward program design and delivery.”
The survey also found that changes to pay-for-performance programs are on the horizon. The top factors prompting employers to consider changes include manager feedback (78 per cent), employee feedback (73 per cent), cost (69 per cent) and the changing marketplace (61 per cent).
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More than half (53 per cent) are planning or considering adding a pay recognition program, which appeals to employers with limited budgets for compensation, because it provides personalized, real-time rewards for performance without raising fixed costs such as base pay.
“Getting compensation right is becoming increasingly important as employers look to drive higher levels of performance, attract and retain talent and make fair pay decisions,” said Sandra McLellan, North America business leader for rewards at Willis Towers Watson, in the release.
“Decisions around pay, however, are becoming more complex, and many employers say their base pay and short-term incentive programs are falling short of expectations. Not surprisingly, changes to these and other related programs are on the horizon.”
New skill requirements are also prompting employers to reassess, according to the survey. Some 45 per cent of respondents said they’re planning or considering refocusing performance management to involve an eye to the future development of the organization, including skills employees can develop.