Recruiting News, Salary & Benefits

Pay Gap Goes Beyond Gender: There’s an Age and Race Pay Gap Too

If you thought the pay gap issue was limited to just gender, think again. A new study by beqom—a cloud-based compensation software provider—reveals that age, race, and gender can affect U.S. employees’ compensation.


Source: Olivier Le Moal / iStock / Getty

According to beqom’s 2018 Compensation and Culture Report, 31% of U.S. workers do not believe employees at their company are fairly compensated regardless of their age or race. Additionally, 48% of U.S. workers believe men are paid more than women at their company.

When assessing the reasons behind demographic pay gaps, 34% of U.S. workers believe managers and supervisors set pay based on their feelings about the employee rather than an employee’s performance, experience, or skill set.

“We found that U.S. workers don’t believe all employees are paid equally, regardless of age, race and gender, and today’s workforce demands pay transparency because they believe it will motivate employees to work harder, create a better company and ultimately solve pay gap disparities among age, gender and race,” said beqom CEO, Fabio Ronga—in a press release announcing the findings.

Ronga adds, “[w]e must do better to ensure that we’re creating and sustaining a vibrant, motivated and diverse workforce. At beqom, we believe in fair compensation for all employees, and use data-driven insights and Artificial Intelligence to take the guesswork and feelings out of employee pay.”

Despite equal skill set, performance, and experience, U.S. workers believe men are paid more than women in the following industries:

  • Technology (34%)
  • Banking and finance (23%)
  • Healthcare and medical (13%)
  • Education and higher education (5%)

U.S. Workers Want (and Are Creating) Pay Transparency

Once considered a taboo subject, salary and pay are now more openly discussed among coworkers with 45% of respondents admitting they know how much their colleagues make and another 46% admitting they’ve shared or discussed their salary with colleagues.

Younger workers are more likely to share salary information than older workers. Fifty-six percent of Millennials would share or discuss their salary with their colleagues compared to 27% Baby Boomers. In fact, most U.S. workers would prefer their colleagues know their salary (66%) versus details of their sex life (20%).

CEO Pay Gap Is a Concern (and Motivation) for U.S. Workers

More than three in four (78 %) of respondents believe that most CEOs and top executives of companies today make too much money compared to their employees. Over half (60%) of U.S. workers want to know their CEOs salary.

Respondents listed several reasons for wanting to know what their CEO made, including:

  • Pay transparency—Respondents think pay transparency creates a better company culture (28%).
  • Motivation—Respondents believe knowing CEO compensation would motivate them to work harder and earn more money (21%).
  • Pay gap concern—Respondents want to compare their salary to their CEO’s salary (11%).

Workers Are Conflicted When It Comes to Discussing Pay with Management

Despite wanting more pay transparency across the company, U.S. workers stay quiet about discussing salary with their manager.

Less than one in five (19%) U.S. workers are comfortable discussing salary and compensation with their manager or supervisor. However, 20% admit they would not ask their manager for more money if they found out a colleague of equal skill set and experience made more money than they did.

Over half (54%) don’t plan to ask for a raise or additional benefits before the end of the year. In fact, 29% of respondents are planning to get a new job within the year because they’re unhappy with their salary and compensation.

To learn more about this report, or to view the full findings, click here.