At the start of the pandemic, who knew that women and people of color would be disproportionately affected by COVID-19? The Harvard Business Review cited a McKinsey study and reported that jobs typically held by women are 1.8 times more vulnerable to the crisis compared to jobs typically held by men. As Human Resource leaders, we can use today’s reality as the catalyst to create real change within our organizations. I encourage you to move from being focused on dashboards and meeting metrics to being intentional about cultivating a culture where pay equity is a natural part of your company’s culture.
The U.S. workforce is becoming more diverse, with changing immigration patterns and more women and people of color entering the workforce. According to the Pew Research, women gained education parity with men starting in the first quarter of 2019. Generally, educational attainment is linked with career trajectory and an increase in salary. Unfortunately, this has not translated to equal representation in STEM, management, and corporate boards. According to a 2020 analysis by the Institutional Shareholder Services’ ESG division, underrepresented ethnic and racial groups make up 40 percent of the U.S. population but just 12.5 percent of board directors.
The Case for Change
Studies indicate that company profits are almost 50% higher when women are well-represented at the top. Employing a diverse workforce, and where employees feel valued and connected to the organization’s mission is also good for business. According to the McKinsey study “Why Diversity Matters”, diverse companies earn 19% higher revenue than monolithic companies. Organizations that employ diverse talent and executives are more likely to retain the best talent. They also engage in more inclusive decision-making to represent larger varieties of customers compared to companies with a more homogenous employee base.
Cultivating Your Company’s Culture
Active engagement and participation from your board, c-suite, hiring managers and recruiters is needed in order to cultivate an environment where pay equity is embedded in your company’s culture. To get started, work with your senior leadership team to identify and eliminate inequities in your talent management strategy and systems. For example, how do you identify top talent or high potentials? What programs do you have in place to ensure that these individuals have the support systems in place to help them navigate potential landmines and to help ensure good work outcomes.
Here are five steps for making pay equity a natural part of your company’s culture.
1. Share the vision and describe what pay equity should look like within your organization.
2. Create awareness, and train recruiters and hiring mangers on the factors that contribute to pay gaps.
3. Add achieving pay equity as an agenda item for board meetings and business strategy meetings. Review succession plans to ensure diverse representation at the management and executive levels, track the progress to achieving pay parity, and secure the necessary investment dollars needed to achieve pay equity.
4. Review talent management systems to help ensure bias is removed in the salary setting process and performance review process and ensure accessibility to training and mentorship programs.
5. Commit to reviewing your organization’s progress to achieving pay equity on a regular cadence.
Making pay equity a part of your organization’s culture is not for the faint at heart. It requires a commitment of time, people resources and financial resources in order to succeed. Building pay equity into your culture also requires ongoing attention to ensure that the shift in your company’s culture is sustainable for the long-term.