Who Is Most Likely to Get a Pay Raise?
A worker’s likelihood of getting a requested pay raise may be directly tied to his or her skin color, according to new research.
PayScale has released new research showing which employees are asking for pay raises and which employees are receiving them. The firm surveyed more than 160,000 respondents for information regarding their salary, demographics, job and organization, as well as their history of asking for raises at their current employer.
The report, titled “Raise Anatomy,” is designed to educate both employees and employers about biases that may impact pay decisions in an effort to achieve equitable pay raises regardless of race or gender. One of the key findings from the report is that white men are far more likely to actually get a raise when they ask for it than people of color.
“We believe most employers want a diverse workforce and fair pay for all employees, but our research shows that employees who ask for a raise may be getting different responses based on their race,” said Lydia Frank, vice president at PayScale. “When requests and decisions about raises are transparent and rooted in data, employers are more likely to approach each conversation about pay in the same way. In addition, employees are less fearful about asking for a pay increase outside of the annual review cycle when their managers show how decisions about raises are driven by real-world compensation data.”
Key findings from the report:
- The majority of employees (70 percent) who asked for a raise received at least some pay increase.
- Of those who asked for a raise, 39 percent of employees got the amount they requested, while 31 percent received a smaller raise than requested.
- People of color were significantly less likely than white men to have received a raise when they asked for one. Women of color were 19 percent less likely to have received a raise than a white man and men of color were 25 percent less likely. (Note: No single gender or racial/ethnic group was more likely to have asked for a raise than any other group.)
- The most common justification for denying a raise was budgetary constraints (49 percent). Only 22 percent of employees who heard this rationale actually believed it.
- One third of workers report that no rationale was provided when they were denied a raise.
- When workers don’t believe the rationale, or aren’t provided one, they reported lower rates of satisfaction with their employer and reported being more likely to quit.
- Of those who said that they did not ask for a raise, 30 percent reported their reason for not asking was they received a raise before they felt the need to ask their manager.
- Employees who are most satisfied with their work and their employers are those who agreed with the statement: “I’ve always been happy with my salary.”
“This report supports growing evidence that simply expecting people from underestimated backgrounds to ask for a raise will not close the wage gap,” said Ruchika Tulshyan, author of The Diversity Advantage: Fixing Gender Inequality in the Workplace. “Negotiation is a remedy that has worked for white men to raise their salaries, but it is not one that is universally applicable, particularly when bias is at play.”
When employees don’t have visibility into the factors that determine pay, added Mollie Lombardi, CEO of Aptitude Research Partners, they’re prone to develop a strong feeling that they’re underpaid and need to look elsewhere to be valued.
“This research shows the need for better processes and better conversations about raises from both the employer and employees to address bias, promote fairness, diversity and—ultimately—a more satisfied and engaged workforce.”