Why pay equity means going beyond salary

Diversity and inclusion training

Pay equity, or giving employees equal pay for similar positions or job duties, has been a topic in the labor workforce for quite some time. It’s important to know that any inequality can stem from unintended bias or gaps in hiring and promotions.

How can an employer ensure equal opportunities for all employees? Use the insights below to ensure your organization is practicing fair hiring and offering fair promotions and salaries.

Review your pay structure and compensation plans often

Inequitable pay between employees can often go unnoticed by an organization, especially if the discrepancies happen slowly over time. Perform routine reviews of your compensation plans to catch any current matters that need addressing. These reviews may also reveal the beginning of an issue that hasn’t come to a head yet, and you can address it early. When reviewing compensation plans, look beyond gender to also consider gaps caused by race or age disparities.

Surprisingly, many organizations do not have a compensation plan, making it harder to address pay equity issues. According to Salary.com’s 2020 Pay Practices and Compensation Survey, of the organizations surveyed:

  • 70% do not use salary structures to manage pay
  • 56% do not have a formal process in place to address pay equity

If you do not have documented compensation plan, now is the time to create one. Using a compensation planning specialist, like Compensation Works, will not only bring your company up-to-speed quickly but also ensure you are moving forward with the best possible plan and practices for your unique business.

Eliminate glass ceilings and sticky floors

Glass ceilings and sticky floors are not just related to gender. A recent study by McKinsey & Company found that Black workers make up 12% of the entry-level workforce and only 7% of the managerial workforce. Even worse, the percentages of Black professionals get smaller the higher up you go.

A lack of opportunities for training and advancement for Black employees is often the culprit, as is insufficient support from managers. Organizations can use this as an opportunity to build more diversity and inclusion training. Implementing mentoring programs can also be an effective way to support advancement opportunities within an organization. 

Review hiring practices

Pay inequity can even happen during the hiring process. For example, are you still asking for salary history? In many states, including Washington State, asking for salary history is prohibited. Pay history does not always give an accurate view of the candidate’s worth and is often a poor indicator of what salary to offer. Instead, go by experiences and skills and how they compare to others in similar roles of your organization.

What about education? Do you give degrees priority over experience? Keep in mind not everyone has equal access to higher education institutions, and you could potentially exclude certain groups.  Take time to fully assess individuals, including their work experience, training, and education.  Many organizations are substituting work experience for education.

To ensure your hiring practices are fair, take a long, hard look at your current process and assess opportunities for improvement.

 At Compensation Works, we offer a thorough pay equity analysis to help organizations identify pay gaps by gender, age, and/or race and ethnicity. Our analysis identifies weaknesses in pay practices that prevent organizations from achieving and maintaining pay equity. We provide recommendations to achieve and maintain pay equity.