In 2018, Deloitte introduced a new concept—a social enterprise. It refers to an organization that fulfills social expectations such as providing equal opportunities for individuals to earn a respectable living, closing the wage gap, and investing in causes outside the organization that directly impacts society.
In a realm where social enterprises are being mandated by law in several states, it acts as the ultimate form of respect to the value an employee brings to the organization—irrespective of their gender, race, or ability.
In 2019, a study performed by the members of the Washington Post Newspaper Guild on pay at the Washington Post found that among journalists, employees of color are paid less than white men, and women of color in the newsroom are paid $30,000 less than white men.
Pay gap is one crucial indicator of challenges in an organization that can lead to increased turnover and low engagement. If a pay gap exists in your organization, it is time to take actionable steps to bridge it. Here are three best practices you can adopt to enable pay equity and to improve your brand profoundly.
1| Define What Pay Equity Means in Your Organization
Pay equity isn’t just about equal pay for equal work, but about providing the opportunity for people of all genders, religions, races, abilities, and other protected classes to grow equally in the organization. Meaning, you should give all your employees learning opportunities, flexible working arrangements, benefits, promotions, and rewards alike.
Another vital aspect of pay equity is transparency in pay and the performance review process. Though transparency might expose gaps in compensation, it will also demonstrate your commitment to openness with employees and your hard work towards achieving pay equity.
Companies like the BBC often release their pay data regularly, while others offer a salary calculator to help individuals figure out their potential pay in the organization. For instance, Sparksuite enables candidates to calculate their salary based on the job role and lists the additional benefits available with the job.
2| Rely on Data Instead of Assumptions
Pay data is the only tool that will help you identify the actual state of pay equity in your organization. A wide array of pay equity analysis software solutions is available on the market that will help you do this.
Differences in pay arise when roles at different levels of seniority are compared. Hence, these software solutions assess pay discrepancies throughout the organization for similar work. For instance, does the pay discrepancy arise in the recruitment process? Is it in the skill development process? Or, is it in the performance review process?
It also helps identify which groups of people are receiving lower pay. For example, is it single mothers or employees of color, or people with less work experience?
Additionally, pay equity software compares your organization’s salary data against the industry standards to identify fair pay for a specific set of skills or a job. If you use a tool with predictive competencies, it will also offer recommendations on the steps you can take to bridge the pay gap. Lastly, such software will also prepare your organization for compliance audits.
3| Regularly Reevaluate the Compensation Planning Process
When performing a reevaluation, people from all departments and diversity should be a part of the evaluation group. This includes line managers, hiring managers, the IT team, the HRIS team, the benefits team, the payroll team, the finance team, and the total rewards team.
A diverse team will be efficiently able to evaluate the current challenges experienced in an organization. Hiring managers can offer insights into the hiring process and help figure out bottlenecks in achieving pay equity at the hiring stage. For instance, the team can work together to create job descriptions that encourage applications from skilled candidates instead of their highly educated counterparts.
Furthermore, do you reward your top performers for their performance equitably? Giving out non-payroll rewards is a part of the compensation process, and it will also lead to your organization achieving pay equity.
How is your organization working towards achieving pay equity?