April 17, 2023 Ways Manufacturing Employers Can Create Fair Pay

Many industries experience pay gaps, namely manufacturing, which had a 22.9% gender pay gap in 2020, above the national average of 18%.

By Tanya Jansen, co-founder of beqom

Pay Gap Issues Within the Manufacturing Industry

Now, a recent beqom report revealed that 29% of manufacturing employees believe these pay gaps have only gotten wider. As manufacturing employees raise more concerns about fair pay, they are also pressing their employers to take more serious action to close existing gaps. With these issues and employee frustrations coming to the surface, employers must form a deeper understanding of their employees’ concerns and develop concrete steps to build a greater sense of equitable and transparent compensation within their organization.

Pay gaps have existed in the workforce for a long time, and yet some employees are still unaware of the exact size of these gaps and the factors that are likely causing them. In fact, when asked about today’s gender pay gap, 63% of manufacturing employees thought the gap was bigger than where it currently stands. Meanwhile, another 45.5% of manufacturing employees believe their workplace has issues with age-based pay gaps and 38.5% think there are issues with gender pay gaps.

When employees notice pay gaps and are left to decipher the discrepancies on their own, it can cause confusion and skepticism among staff. Employers have an opportunity to address discrepancies and provide clarity to pay practices by leading discussions on any existing pay gaps or biases within the organization, and the steps they’re taking to counter them.

For those who are aware of their industry’s shortcomings, many are seeking more action from employers and more information about their plans to close pay gaps; and this information must become available sooner rather than later, because if employees fail to see meaningful progress in a timely manner, some would consider moving to roles at other organizations that are more dedicated to closing pay gaps. In fact, over half (52%) of manufacturing employees say they’d be more willing to work at an organization that reveals its gender pay gap figures every year and 36% would seek a job at a company that shared a lower gender pay gap than the company they currently work for. With this in mind, it’s time for manufacturing employers to bring pay gap issues to the forefront and begin prioritizing transparent compensation.

How Manufacturing Employers Can Bridge Existing Pay Gaps

Since 40% of manufacturing employees say they are unaware of any efforts from their employer to curb pay inequities, employers must lead more conversations about their pay strategies and pay transparency within their organization. As 38% of employees think executives and board members are the most responsible for bridging gender pay gaps, these discussions provide employers an opportunity to thoroughly explain how pay decisions are made within their workplace. Talking openly and proactively about compensation helps to erase the negative stigma around talking about it in the workplace.

To take transparency a step further, employers can disclose their gender pay gap measurement. This gives employees a better idea of what gaps exist within their organization, and how much progress their employer has made at closing the gaps. Manufacturing employers can also help more women advance into leadership positions by equipping them with the right mentorship and upskilling opportunities, which is needed, considering only 1 in 4 leaders in the industry are women.

It’s important to acknowledge that employers in the industry are already taking steps to close gender pay gaps. For example, over a third (37%) say their organizations have taken steps to adjust salaries for female workers who may earn less than their male colleagues despite holding the same role and being with the organization for the same amount of time. Another one in five (23%) employees say their company has adjusted salaries for female workers.

Conclusion

Actions like proactively discussing compensation, sharing pay gap measurements and better supporting women in manufacturing so they can reach career advancement prove to employees that their employer is true to their word and proactively closing pay gaps. This can build trust with employees, and create a stronger culture that prioritizes equity and fairness.

Tanya is the co-founder of beqom, a continuous performance and rewards solution. Prior to launching beqom in 2009, Tanya worked at SAP and Accenture. She has spent her career in the enterprise software space with senior roles ranging across multiple organizational functions.

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