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Gender pay equity: How do you measure up?

pay equityThe gender pay gap has been much in the news lately as well as on the minds of the CEO and CHROs. It’s an issue that exists at the intersection of state/federal legislation, social values/ethics, and the economic realization that gender pay equity is good for business.

State and federal regulations have made gender pay equity a must for organizations. Organizations are learning that gender pay equity has an impact on the bottom line. Organizations with pay parity across gender and ethnicity typically perform better than those with pay disparities across these variables. This makes sense—employees that are valued in equal terms from a compensation point of view are happier, more engaged and more productive, and this has positive outcomes for the business. HR can use workforce data to achieve and maintain pay equity—which will pay off, not only in compliance terms, but also at the level of business outcomes.

Gender pay equity: The foundations

At the most basic level when looking at gender pay equity, compliance is key. You may need to prove compliance with state/federal/provincial regulations as well as organizational values and standards.

  • Analyze workforce data to conduct regular pay audits, looking at gender and ethnicity.
  • Conduct regular audits of hiring and promotions across gender and ethnicity.
  • Analyze data to identify inequities and areas of focus needed to achieve/maintain compliance.
  • Review hiring and promotion processes to reduce unconscious bias and structural barriers.
  • Introduce both a pay gap and diversity dashboards to ensure ongoing examination of the data and shared dialogue.
  • Your dashboards will allow you to segment and compare gender parity and other diversity goals across variables such as recruitment pipeline, compensation, performance pay, progression and job movements, job level, etc.

Moving beyond the basics

Moving beyond compliance, you can start to segment deeper, move away from vanity metrics to tell a more complete story, and articulate the net impact. 

  • Use your data to look at costs, business impacts, drivers and risks related to lifestage–specific turnover (i.e., during the early parenting years), and whether gender pay equity will help mitigate some of these impacts.
  • Look at what your data is really telling you—take a hard, honest assessment of whether you are reporting vanity metrics or storylines which are somewhat misleading and whether these data points square with your business principles and culture.
  • For instance:
    • You may be proud to report that you are promoting female software engineers at the same rate as their male counterparts, however there are 5x as many male software engineers in your company. This may mean you’ve made headway in promotion and development activities, but you’ve still got lots of work ahead when it comes to recruitment and hiring.
    • Extending that same scenario, you may proudly claim gender pay equity in this role, however your total payroll for female software engineers is $1M, while your total payroll for male software engineers is $5M.

Interested in seeing gender pay analytics in action? Here’s a 4-minute video.

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PeopleInsight Workforce Analytics

Workforce Analytics at PeopleInsight
John Pensom is CEO of PeopleInsight with 20 years’ experience in the "people" business and gained deep knowledge in how technology, information and analytics drives business and culture change. PeopleInsight is a Canadian company delivering cloud-based workforce and business analytics; it connects and unlocks traditionally disparate HR, talent, engagement, business results and external market data to deliver rich insight through analytics in clear, visually appealing and actionable ways. Read more
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