Right now, organizations around the globe are dusting themselves off and beginning to consider what their post-pandemic world really looks like.
But it’s not just about reviewing approaches to virtual hiring, hybrid working and remote teams – it’s about acknowledging the changes in many teams. Recognizing the disproportionate number of women who left the workplace last year is crucial – as well as understanding that women and historically marginalized groups experienced greater pay disruption during the pandemic than any other sector of the population.
Today, organizations are struggling to retain their diverse talent. They are not only at risk of losing the high-performing women who are currently helping to reduce the company’s gender pay gap. They are also risking their talent pipeline and the pay gap reduction of the future.
Opportunity to Address Inequities
Businesses have an opportunity right now to shape a more equal workplace. The question is: What will business leaders do today to address the inequities in pay for tomorrow? The pay gap, pay equality, and pay equity are hot topics right now – each referring to the statistically proven wage gap between people of different genders and ethnicities.
The gender pay gap is often cited as evidence that women are systemically underpaid. Pay equality is based on the idea that equal work should result in equal pay. And pay equity is a method to eliminate discrimination when it comes to employees’ salaries. It means your gender and/or race shouldn’t affect how much you are paid to do a role.
It’s widely known that there are wage gaps between men and women – with women earning only 82% of what men earn. And this percentage decreases further if the woman is a person of color. More recently, studies have even revealed that the gap exists between heterosexual people and the LGBTQ+ community – with gay men earning 11% less than heterosexual males. And when it comes to disability, if an employee has a mental impairment, their pay gap is more than 18% – which is worse than the 10% gap already experienced by those with a physical impairment.
Glass Ceilings and Sticky Floors
It’s easy to assume that businesses are simply discriminating. But it’s not as simple as that. There are a number of reasons for pay inequities, but a lot of the explanations sit in one of two categories – glass ceilings and sticky floors.
Glass ceilings are the obstacles that stand in the way of advancing careers. For example, women may choose not to apply for a promotion, based on its full-time requirement conflicting with caregiving responsibilities.
Sticky floors, meanwhile, are the disadvantages faced by certain groups of employees. If a hiring manager has an unconscious bias that people of colour are less competent in a position, for example, they are likely to state a lower salary when making a job offer.
According to the Organisation for Economic Co-operation and Development (OECD), about 60% of the gender pay gap is the result of glass ceilings and 40% comes from that sticky floor. Pay inequity is increasingly becoming a reputational risk for organizations, not to mention that any unfairness – or perceived unfairness – will affect workplace productivity, employee engagement and staff morale.
So, how is your workplace performing in relation to pay equity? If you genuinely don’t know the answer, here are some key considerations to help you determine whether or not your organization has equitable compensation.
- Are your roles paid according to their assessed value (level of skill, effort, responsibility, and working conditions)?
- Are employees paid using established pay scales?
- Are compensation packages available to all?
- Do you have job descriptions for all positions?
- Do you have an established job evaluation system?
- Do you measure the number and proportion of gender and ethnicity in each job class?
If you can answer yes to all these questions, you’ve probably put in place some practises to address pay inequities. But that doesn’t mean you can rest on your laurels just yet. Take the time to investigate the frequency of your measurement and the findings raised by the most recent round. Although the pay gap has been narrowing, we can’t take progress for granted, especially when – at the current rate – the pay gap will remain until 2059. If your answers included the odd no, then you have some work to do. Achieving pay equity requires intentional and ongoing commitment to equal opportunity and fair compensation.
As we pick up the threads of our working lives in the post-pandemic world, it’s time for pay equity to be a priority in all organizations.