Pay disparity has long been a topic, most notably with discrepancies in pay between women and minority groups. The #metoo movement and #blacklivesmatter movements have brought this issue even further to the forefront. And rightly so.
Payscale published its annual Gender Pay Gap Report for 2020 in March, stating that, “Since we have started tracking the gender pay gap, the difference between the earnings of women and men has shrunk, but only by an incremental amount each year. There remains a disparity in how men and women are paid, even when all compensable factors are controlled, meaning that women are still being paid less than men due to no attributable reason other than gender. As our data will show, the gender pay gap is wider for women of color, women in executive-level roles, women in certain occupations and industries, and in some US states.”
The report is definitely worth a deep dive to read if you have a chance.
If your organization is concerned about pay disparity, what should you do? It starts with considering all the factors that go into determining pay:
1. Consider what your organization values. What creates value for your organization by creating a competitive advantage? These are compensable factors. As another Payscale report states, “It’s also perfectly reasonable to pay people in the same position differently as long as the compensable factors are justified and aligned with legal requirements.”
2. Consider time. Years of experience overall and tenure with the organization are important factors that affect pay.
3. Consider performance. Performance can and should affect pay. Make sure you have a documented and systematic way of measuring performance that can justify and backup pay differences.
Examine your wage data.
4. Conduct a pay equity analysis. A professional in the field can help you conduct regression analysis to see what factors are contributing to pay disparities if any, and if these factors are based on protected classes and/or on factors mentioned above like years of experience, compensable factors, etc.
5. Get your legal team involved. I know, I know, I hate to call the attorney too unless it is absolutely necessary, but it is necessary here. This can help you do a pay equity analysis under attorney-client privilege, and based on what you discover, help you chart the right path forward.
Finally, consider ways you can help to combat systemic issues with pay disparity:
6. Consider policies and “norms” that impact gender or other demographic factors like race differently. A documented reason for macro gender pay disparity issues is tied to women leaving the workforce altogether or seeking more flexible work opportunities to raise children. Considering how your organization can retain female talent during child-rearing years is an important consideration for individual organizations and for the entire economy on a macro level.
7. Teach advocating and negotiation skills to women and minority groups. I personally believe one of the reasons women and some members are of minority groups are paid less is because they don’t ask for what they are worth. There is evidence to support this (and there is evidence that contradicts it). Helping people understand the market for their skills and experience and giving them the confidence to stand for what they are worth and ask for it is empowerment at its finest. I’ve found that many people just don’t know what they don’t know when it comes to the knowledge and skills needed to advocate and negotiate, so they just don’t. Over a lifetime, this could mean a substantial difference in lifetime earnings.
Are you concerned about pay fairness and pay disparity at your organization?