Equality in Comp: Doing What's Right, Not Just What's Required

​The events of the last couple of months have caused the world to look at and re-think the meaning of equality.  Human Resources professionals have been considering equality in terms of hiring practices and pay for many years.  Initially, HR was concerned about compliance because of legislation surrounding fair pay and non-discriminatory hiring.  However, I have seen a shift starting with the millennial generation where the focus is more on “doing the right thing” in terms of equality and non-discrimination rather than doing those things because the law says it must be done.

Compensation is responsible for ensuring that fair pay practices are followed in the organization.  There are organizations, such as CURO (one of my favorites), who use analytics to identify key areas of risk, understand where pay gaps can be explained by non-monetary factors, and track remedial actions.  However, there are some things that Compensation can do to determine if that level of analysis is required.

I always keep an eye on internal equity.  I encourage clients to keep this information readily available and up-to-date at all times.  I recommend using this data every time an offer is made to both internal and external candidates to ensure that new offers do not disproportionately exceed current salaries creating a fair pay issue.  If it becomes evident that new candidates require a large increase over the current internal average, a red flag is raised that current internal salaries may be under market and signify a need to review survey data.  If survey data indicates internal averages are aligned with the market, there may be an indication of what I like to call a “hot spot” (a job that is highly desired in the market causing employers to pay top dollar for talent).  “Hot spots” cause a fast uptick of salaries in the market and may require internal salaries to be adjusted to maintain market alignment.

Compensation can also conduct their own “basic” analysis of their workforce comparing average salary by gender, race, ethnicity, organizational level, management level, etc.  This analysis will not take into account the complexities that an expert (such as CURO) will consider, but it can provide some insight into whether there may be some cause for concern.  One thing to keep in mind though, once you have this information and see that there may be an issue(s), you have an obligation to do something about it which is the right thing to do.

Finally, maintain open lines of communication with HR colleagues and management around concerns they may have regarding pay equity.  If a possible problem area is raised, be sure to gather data and conduct analysis to determine if there is an issue or if one is developing.  Then work on creating a plan of remediation.

Now, more than ever, employers are under a microscope regarding equality.  Not just because the law requires it, but because employees are demanding it.