Payscale’s new research shows that most workers are unaware if they are paid fairly; 51% believe they are paid below market even when they are paid at or above market.
Workers who perceive that they are paid below market are 50% more likely to seek a new job in the next six months.
SEATTLE, July 20, 2021 (GLOBE NEWSWIRE) -- Today, Payscale Inc, the leading provider of compensation data and software, released its Fair Pay Impact Report that highlights fair pay perception and pay communication on job seeking behavior and retention. This research comes during a turbulent labor market as the economy recovers from the COVID-19 pandemic and employers struggle to attract and retain top talent.
Payscale’s latest research shows that the majority of employees are unaware if they are paid fairly. Among other findings, the research shows that 51% of workers believe they are paid below market even when they are paid at or above market. Workers who perceive they are underpaid are 49.7% more likely to seek new opportunities in the next six months, showing that pay perception and pay communications have a measurable impact on retention.
Payscale’s research also shows that pay transparency is strongly correlated with lowering job seeking behavior among employees. When asked to rate how transparent their organization is about pay on a scale of 1-5, workers who rated their employer as a 1 were 183% more likely to be seeking new opportunities in comparison with workers who rated their organization’s pay transparency a 5. Conversely, workers employed at organizations with a pay transparency of 4 or 5 were over 65% less likely to seek a new job relative to organizations with a pay transparency of 1.
"Many organizations underestimate the complexity of getting pay right," said Scott Torrey, CEO of Payscale. "A strategic, consistent approach is required before you can adopt any level of pay transparency. To navigate the attraction and retention challenges of the present day, organizations need to first invest in compensation management, and that includes multiple sources of data to triangulate fair pay."
Wage growth has been accelerating for the first time in over a decade, giving evidence to the hiring challenges employers have been facing. According to the Payscale Index, a quarterly report on nominal and real wage growth, wages are rising 0.6% quarter over quarter and 2.6% year-over-year (YOY). Wages are rising particularly fast for occupations in food services (4.1%), transportation (4.0%), and retail (3.9%). However, real wage growth adjusted for inflation declined -0.6% in the second quarter and increased only 0.3% YOY.
"Employees have choices and are expecting more from their companies on multiple levels," said Shelly Holt, Chief People Officer of Payscale. "COVID-19 changed the game. Certain perks that were differentiators before the pandemic are less enticing now and employer-paid healthcare, sick pay, vacation time, and workplace flexibility are now expected benefits. Simply put, workers want more than just higher wages."
The data and methodology for the Fair Pay Impact Report, which analyzes close to 400,000 profiles, can be accessed in its entirety on Payscale.com along with analysis and recommendations to employers looking to navigate compensation strategy in a volatile market.
In addition to compensation software and salary data, Payscale provides professional services to organizations to help them navigate the landscape of compensation management, including assistance with market pricing, development of a formal compensation strategy and structures, and manager training on pay communications and pay transparency. Organizations interested in compensation solutions, should contact Payscale for a demo.
Individuals evaluating opportunities are encouraged to fill out a salary profile with Payscale to evaluate the worth of their skills and experience on the market and inform their salary negotiation strategy.
As the industry leader in compensation data and technology, Payscale helps organizations #getpayright. Payscale is the only technology solution for managing compensation that provides multiple streams of transparently curated, and validated market salary data. Combined with modeling engines that learn continuously and generate recommendations and insight, Payscale empowers HR to price jobs and adjust compensation to reflect near real-time changes in the market — all on one trusted data platform. With Payscale’s Adaptive Compensation Advantage, teams operate with efficiency, focused on outcomes rather than manual data management. To learn how companies like The Washington Post, Perry Ellis International, United Healthcare and The New York Times rely on Payscale to attract and retain top talent, motivate and engage employees, and plan their future workforce, visit payscale.com.