The gender pay gap still exists, but it is slowly shrinking, according to research from Glassdoor.
The report, “Progress on the Gender Pay Gap: 2019,” reveals that although significant pay gaps remain between men and women, the pay gap has narrowed slightly in the United Kingdom, United States, France and Australia, when compared to Glassdoor's 2016 study.
The 2019 study is based on more than half a million salary reports shared on Glassdoor by employees over the past three years and includes pay data down to specific job title and company name. This specificity enabled Glassdoor to understand both the “unadjusted” and “adjusted” pay gap in each country. The unadjusted pay gap explains the overall difference between pay for men and women, while applying statistical controls for a more apples-to-apples comparison is known as the adjusted pay gap.
Today, the unadjusted pay gap between men and women in the UK is 17.9%. This represents a five-percentage point shrink in the unadjusted pay gap from three years ago, when women earned, on average, 77p for every £1 men earn. When statistical controls are applied for worker and job characteristics, including worker age, education, years of experience, occupation, industry, location, year, company and job title, the pay gap in the UK today is 5%, revealing the adjusted pay gap. This is down one half of one percentage point from the 2016 adjusted pay gap (5.5%).
“Over the past three years, company leaders, politicians, celebrities and more have called for an end to the gender pay gap. Glassdoor's comprehensive study put those words to the test to reveal that slight progress has been made to close the gap. Though a promising sign, it should not detract from the larger fact that significant pay gaps remain around the world, even after controlling for workplace and job factors,” said Glassdoor Chief Economist Dr. Andrew Chamberlain.
The Causes of the Gender Pay Gap Revealed
The pay gap can be divided into what can be explained due to differences in worker characteristics (e.g., age, education, etc.) and what remains unexplained. Glassdoor researchers found that the majority (61%) of the overall UK pay gap can be explained, while 39% of the overall pay gap cannot be explained by any factors observable in Glassdoor data. This means the unexplained pay gap could be attributed to factors such as workplace bias (whether intentional or otherwise), negotiation gaps between men and women and/or other unobserved worker characteristics.
One of the most significant factors contributing to the pay gap is the industry and jobs that men and women sort themselves into, also known as “occupational sorting.” This factor explains about 37% of the overall UK pay gap.
Gender Pay Gaps Around the World
The 2019 Glassdoor study also reveals the unadjusted and adjusted pay gaps — and how they've changed since 2016 — in France, Germany and Australia, along with new pay gap data in Canada, the Netherlands and Singapore. Findings in each of these markets are similar: a larger unadjusted pay gap that shrinks, but does not disappear, when additional factors such as worker experience, age, location and job title are considered.
Similar to the U.S., pay gaps have slightly improved over the past three years in the UK and Australia, but not in Germany. Of the eight countries in the 2019 study, Germany has the largest unadjusted pay gap (22.3%), while France has the smallest unadjusted pay gap at 11.6%.
Employers Expanding and Incentivizing Their Well-Being Programs
Many organizations are incentivizing their wellness plans this year, according to research from Fidelity Investments and the National Business Group on Health (NBGH).
The “Health and Well-Being Survey” revealed that 57% of the 164 employers surveyed provide financial incentives to employees by reducing their health-care plan premiums and more than a third (34%) of employers provide incentives by funding an employee’s health care account, such as a health savings account (HSA).
Overall, the survey found that companies across the country are expected to spend an average of $3.6 million on well-being programs in 2019 to help create healthier and more productive workforces. While there are various components to corporate well-being programs, the study revealed that more than one-third (40%) of these budgets will be applied to financial incentives that encourage employees, and their spouses/domestic partners, to participate in these programs.
The average per-employee incentive decreased slightly to $762 for 2019, down from $784 in 2018, but is still nearly three times the average employee incentive of $260 reported in 2009. In addition, the percentage of employers offering incentives to spouses and domestic partners increased to 58% in 2019, up from 54% in 2018, while the average incentive for spouses/domestic partners increased to $601, up from $596 in 2018.
Overall, employers are expected to continue to focus on financial incentives as a key benefit within well-being platforms in the future, as 33% of employers indicated they plan to continue to increase the amount of financial incentives for employees over the next three-to-five years.
Employers Recognize Interconnectedness in Well-being Programs Beyond Physical Health
While programs focused on physical health remain the most popular offering on well-being platforms, employers continue to recognize the interrelationship between physical, financial, work and life well-being.
For example, recent research from Fidelity indicates that employees who need help with their financial well-being are significantly less likely to be physically healthy and more likely to report feeling frequently stressed or anxious, which can impact job performance and productivity. In addition, employees with low job satisfaction also tend to feel burned out at work and miss an average of nine days each year. However, employees who engage in some kind of regular community involvement, such as volunteering on a weekly basis, are more likely to have lower stress and greater life satisfaction, which can enhance workplace productivity.
As a result, employers continue to focus on providing programs focused on well-being beyond physical health, including emotional/mental health (92%), financial health (88%), community involvement (69%), social connectedness (54%) and job satisfaction (25%).
“More employers view their investments in health and well-being as integral to deploying the most engaged, productive and competitive workforce possible,” said Brian Marcotte, president and CEO of NBGH. “Their focus is holistic, with physical health being a component rather than the only priority. Employers recognize that their employees have different needs and want to engage in different ways. Financial and emotional stress, for example, are major detractors from work performance and employers are doubling down on these areas.”
Well-Being Programs Continue to Expand Globally, but Tailored to Local Workforce
Employers with a multinational workforce are increasingly interested in developing a consistent benefits platform for their employees across different geographies, and many companies have taken steps to offer well-being programs to their global workforce.
More than half (56%) of employers surveyed offer well-being programs to their global employees, an increase from 44% in 2018, and another 14% are considering extending their well-being program to workers in multiple geographies by next year. However, only 34% of employers have a global strategy in place, while half (50%) let local markets focus on well-being as needed.
In addition, the overall objectives of well-being programs still vary by region. According to the survey, two of the top objectives of well-being programs in the United States are to manage health-care costs (82%) and improve employee productivity/reduce absenteeism (59%), while the top objectives globally are to improve employee engagement/performance (82%) and align employees with the corporate culture (72%).
Canadian Organizations Poised to Improve Benefits Programs
Canadian employers are planning to up their benefits game in the coming years. This is according to Willis Towers Watson’s Best Practices Survey.
The survey of 108 large and midsize Canadian employers found that 12% are currently differentiating their benefit programs for recruitment and retention. However, 72% said they expect to do same within the next three years.
“Plan sponsors are quickly realizing the power in using their health and well-being strategies to differentiate themselves from competitors,” said Wendy Poirier, managing director, and health innovation leader at Willis Towers Watson. “They’re taking steps to gain this competitive advantage by integrating physical and emotional health, and social and financial well-being programs into their total rewards programs, while clearly recognizing the value of benefits to meet their talent and prospects’ evolving needs.”
In tandem with offering more compelling benefits, employers are looking to provide more flexibility and decision-making support to enhance their plan members’ experience.
According to the study, 60% of employers now offer flexible benefits but this is set to rise to 78% by 2020. By then, almost two-thirds (60%) expect their employees will be customizing which benefits and options to purchase with their employer-provided benefit dollars, up from 43% today. At the same time, 41% of survey respondents plan to make workforce perk, such as child-care services, volunteer time off, onsite conveniences or concierge services a core part of their employee value proposition, compared to 21% today.
Although only 29% of respondents currently have a companywide mental-health strategy, 85% expect to have an action plan in place by 2020. Other improvements that survey respondents expect to implement include measuring and monitoring workforce stress and its causes (66% up from 27%) and offering training and coaching to managers, specifically to identify emotional health issues, stress and life events that impact work performance (77% up from 32%). More than two-thirds of respondents (69%) plan to include well-being as part of their organization's corporate social responsibility strategy and mission.
Using technology to assist decision making and health and well-being choices will continue to increase. Close to 80% of respondents said they will offer access to online wellness platforms or apps by 2020.
“Overall, the Best Practices survey results demonstrate that Canadian employers’ commitment to well-being has never been stronger,” Poirier said. “The findings show that the overwhelming majority of plan sponsors are re-evaluating their programs with an eye toward design effectiveness and value for money, as they look to enhance their employee’s physical, emotional, financial and social wellbeing between now and 2020.”
Work Flexibility Reigns in the Land of Oz
Flexible work arrangements have become somewhat commonplace in Australia and it’s led to some organizational challenges.
This is according to a survey of more than 5,000 Australian workers by The Adecco Group, which found that 60% of today’s workers have flexible working arrangements. The demand from workers for flexibility in their roles continues to rise and it is now no longer an optional benefit to workplaces if they wish to retain highly skilled staff.
Currently, 40% of Australian workplaces offer remote working, while 26% offer flexible hours and 12% offer a compressed working week. Offering different options is seen as necessary in order to reach an employee’s needs.
“Workplace Flexibility is no longer a ‘nice to have’,” said Rafael Moyano, CEO of Adecco Australia. “It is now an imperative benefit that employers must offer to stay competitive and be attractive to potential candidates. In today’s candidate-driven market, with unemployment rates under six per cent, the candidate is in the driver seat. If a company doesn’t offer the most enticing benefits, top talent will look elsewhere.”
However, some businesses can find that work flexibility creates difficulties when it comes to team collaboration and innovation.
“The world of work is now enabled by forms of technology so employees can work seamlessly from anywhere,” Moyano said. “However, while technology has evolved drastically over the last decade, the traditional working environment has remained static. It’s time that our working styles evolve as rapidly as technology.”
Written and compiled by WorldatWork staff writer Brett Christie.