Less than a third of employees believe their pay is fair: Gartner

Less than a third of employees percent believe their pay is equitable according to new Gartner research.

The Gartner HR survey showed that employees who perceive their pay as unequitable have a 15 percent lower intent to stay with their employer and are 13 percent less engaged at work than employees who perceive their pay as equitable.

Tony Guadagni, senior principal in the Gartner HR practice said, “Employees’ sensitivity to perceived pay gaps is being exacerbated by today’s economic conditions, including rising inflation, and the hot labour market, which is causing a shift in compensation between tenured employees and new hires.”

Gartner noted that the majority of organisations are working to close pay gaps. 84 percent of leaders said they are conducting pay equity audits at least annually, and while technical approaches are necessary, they don’t address employee perceptions.

Guadagni said employee perceptions of pay equity aren’t rooted in compensation.

He said, “Instead, the main driver of perception is organisational trust – when employees don’t trust their employers, they don’t believe their pay is fair or equitable.”

Most employees’ perceptions around pay are attributable to general trust in the organisation. Factors that erode organisational trust include poor culture and inclusivity, poor work-life harmonisation and unfair experiences.

To increase employee perceptions of pay, HR must rebuild employees’ trust in the organisation.

Another Gartner survey noted that 72 percent of total rewards leaders report that their organisation’s senior leadership believes that pay equity is a high or very high priority.

Yet, decision-makers deprioritise pay equity in practice, particularly when hiring critical talent.

While total rewards leaders own pay equity, HR can construct a pay equity team that has broad insight into the factors that cause pay equity gaps and the authority to correct them.

Guadagni said, “An ideal pay equity team consists of leaders and employees across levels, business units and functions with insight into the practices and processes that create pay equity gaps and a visible commitment to pay equity within the organisation.”