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Inflation Exacerbates Pay Inequities Among American Workers, Study Shows
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Rhea-AI Summary
Credit Karma has invested $15 million to eliminate pay disparities among employees, following their transition to role-based compensation. This initiative increased base salaries for 98% of employees and further raised wages for lower-paying roles with an additional $500k investment. A recent report highlights that two-thirds of American workers feel underpaid amid rising inflation. Credit Karma advocates for pay equity, with 71% of workers prioritizing it when considering employment. Employee satisfaction concerning compensation is significantly higher than the industry average.
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Invested $15 million to eliminate pay disparities among employees.
Increased base salaries for 98% of employees through role-based compensation.
Additional $500k investment to raise wages for lower-paying roles.
Attrition at a four-year low due to better compensation practices.
86% of women and 82% of men report fair compensation compared to 55% and 57% at other tech companies.
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Credit Karma prioritizes pay equity starting from inside out, having invested $15 million to remove pay disparities among employees
OAKLAND, Calif.--(BUSINESS WIRE)--
Today, Credit Karma, the consumer technology platform with more than 120 million members, has released a report that examines pay inequities in the U.S. workforce. The report found two-thirds of American workers feel like their pay is not adequate enough to cover the rising cost of inflation, which reached another four-decade-high in February, according to the Labor Department. Economic factors like inflation and the Great Resignation, combined with unresolved systemic issues, like the gender pay gap and racial inequalities, bring to the fore the need for equal pay within the American workforce. This Equal Pay Day, Credit Karma is officially putting its stake in the ground as a champion for pay equity both inside and outside of its organization and calls on other major companies to do the same.
Before the pandemic even hit, Credit Karma addressed pay equity head-on by moving to role-based compensation in 2018. This was a $15 million investment that increased the base salary of 98% of Credit Karma employees upon implementation and helped eliminate the possibility of bias by removing ranges and offering the same compensation to employees in the same role. Credit Karma continues to double down on compensation. At the end of last year the company again increased compensation, specifically for those in traditionally lower paying jobs, to ensure all employees were earning a living wage. This was an additional investment of $500k that ensured all employees were paid enough to support a family of four in each of the geographies where Credit Karma operates: Charlotte, Oakland, Los Angeles and London.
“At Credit Karma, it’s our mission to champion financial progress for our more than 120 million members and we apply that same mission internally,” said Colleen McCreary, chief people, places and publicity officer at Credit Karma. “We want our employees to be able to make financial progress and that starts by providing standardized and equitable pay with ongoing biannual market evaluations. Through our role-based compensation structure, we’re able to limit biases that might otherwise exist within the hiring process and make sure all Credit Karma employees are paid consistently, no matter what.”
The implementation of role-based compensation has had a tangible impact on Credit Karma’s ability to attract and retain talent, with attrition at a four-year low for the company. This has also resulted in higher satisfaction in pay among its employees. According to a recent internal workplace survey conducted through Culture Amp, 86% of women who work at Credit Karma believe their total compensation is fair, along with 82% of men. That’s compared to 55% of women and 57% of men at other tech companies.
This makes sense in the context of Credit Karma’s latest report, which found American workers are prioritizing pay equity and compensation above all else when seeking employment. According to the report, 71% of American workers say it’s important for their employer to prioritize pay equity and another 74% of workers who say they prioritize salary when looking for a new job or opportunity.
McCreary continued by saying, “We recognize that overhauling compensation requires a significant investment and not all companies are in the financial position to do so overnight. However, I believe there are steps companies can take to improve pay equity within their company and show their dedication to closing the gap. This starts with explaining to employees how they’re paid, how those decisions are made and how often they’re reviewed. We made these changes to our compensation because it was the right thing to do, and we hope this serves as an example to other companies who have not yet made the leap to standardize their pay.”
About Credit Karma
Founded in 2007 by Ken Lin, Credit Karma, an Intuit company (Nasdaq: INTU), is a consumer technology company with more than 120 million members in the United States, U.K. and Canada, including almost half of all U.S. millennials. While best known for pioneering free credit scores, the company’s members turn to Credit Karma for everything related to their financial goals, including identity monitoring, applying for credit cards, shopping for loans (car, home and personal), auto insurance, savings accounts and now checking accounts through our bank partner, MVB Bank, Inc., Member FDIC — all for free. Learn more about how Credit Karma members are making financial progress on TikTok, Instagram, Facebook and Twitter.
