Benefits and Compensation, Diversity & Inclusion

Pay It Forward: Turning Pay Equity into a Reality

Think back to the beginning of the pandemic. Parents took on roles as teachers, caretakers, and much more in addition to their full-time jobs. Furthermore, countless articles suggest that women took on the bulk of those responsibilities, and, despite the additional duties in and out of the home, industry data still indicates that women earn 85% of what men make. Many companies pride themselves on being inclusive but fail to create total inclusivity through gender-based pay equity.

The idea of pay equity has been around for years, but the big question is: How do we combat discrepancies and work toward closing the pay gap? With the help of your leadership team, you can work to close the pay gap. When creating an action plan with your team, keep these tips in mind to help you become a more inclusive workforce:

  • Conduct internal and industry audits. By using people data to benchmark pay and demographic data, HR teams get a much deeper understanding of their current salary snapshot as it relates to gender, location, and age. Technologies such as predictive people analytics can even provide aggregate data from other employers the technology serves. Additionally, being able to drill down to turnover rates by key demographics can show where some managers may need additional training if churn isn’t in line with other departments or is focused on a certain demographic. Finally, predictive people analytics allows people professionals to “test” what could work, such as a raise’s role on retention. HR leaders are ready to invest in the technology this year. In fact, 40% say they’re planning to invest in HR analytics in 2023.
  • Set goals. Once benchmarking is accurate and successful, it then needs to show patterns of improvement (hopefully). Pay equity goals will need to be not only set but also tracked, such as with quarterly business reviews. Project “ambassadors” can be responsible for keeping the goals on track and for taking the proper steps and reporting on progress.
  • Eliminate unconscious biases. What the previous steps suggest is important, but organizations won’t improve without employee and manager training. There are so many resources available for identifying and eliminating unconscious biases. Not only does this help leaders close the pay gap, but it also improves the employee experience, as training is one of the top ways to keep employees engaged, according to a recent survey of full-time employees.
  • Continue to be flexible. We’re now fully in post-pandemic life, and as a workforce, we’ve truly changed the way we work. Many remote roles have transformed into hybrid roles to some capacity, and many that have returned to the office full time also offer the option of an occasional remote setting. Regardless of where employees work, there’s a common theme with many companies now: flexibility. Employees’ newfound flexibility brings us closer to closing the pay gap and opens opportunities for women to grow in their career regardless of their home life.Many HR leaders continue to enforce this flexibility to promote a better work/life balance (48%).
  • Begin at hiring. Revisiting job postings and removing requirements such as college degrees or certifications can eliminate some of the reasons for pay gaps, especially for people of color. Additionally, recruiters have found success in asking candidates about their experience rather than education and not harping on employment gaps. As of now, 40% of companies aren’t addressing pay gaps between genders and/or race. Those that are addressing it are doing so by leading with pay transparency; at 53%, it remains the top way to address pay gaps in organizations. With pay transparency laws becoming more widespread, many companies are starting to follow suit and are including pay ranges in their job descriptions and avoiding asking about past salaries.

The Bottom Line

Keeping top talent is the biggest stressor this year for HR leaders. By addressing the pay gap and establishing these best practices, your company can turn pay equity into a reality and, in turn, help with retaining those top employees regardless of their gender.

Dustin Stipanovich is VP of Talent at isolved.

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