International Women’s Day is celebrated on March 8th and is a global day celebrating the social, economic, cultural and political achievements of women. The day also marks a call to action for accelerating gender parity. To acknowledge this day and its sentiments, we invited Vicky Peakman, Payscale’s Director of Social Impact to share her thoughts on what the #EmbraceEquity theme means to her.
#EmbraceEquity is the theme for this year’s International Women’s Day.
What does an embrace have to do with equity, you might ask? According to the IWD website, this year’s theme is about fully embracing the promise and purpose of an equitable society. But what does it mean to truly embrace equity? It is that everyone in every society, across the world, has the same opportunity to achieve their potential. At present, where you are born, and to whom, plays a massive part in the opportunities you will have in your life. We need everyone to embrace the fact that this is unfair.
Here at Payscale, we’re thinking about this year’s theme #EmbraceEquity in terms of the work — and the future of work. How can we embrace equity across talent practices to attract, hire, onboard, manage, promote, retain, offboard and all the other moments of meaning in between?
Focus on improving workplace equity is increasing but progress is slow
Within the realm that organizations can control, things are getting better, but slowly. The two main areas of focus are compensation (what people are paid, what pay increases they receive, what benefits and incentives they are eligible for) and talent (hiring, promotions, development opportunities, values placed on skills, certifications and education).
Environmental, Social and Governance (ESG) requirements also cover these areas, meaning organizations are starting to look at pay equity, workforce diversity and wealth inequality metrics as part of these initiatives.
In addition, new pay transparency laws coming in across the US and the EU mean that organizations can no longer ask for prior salary history and must provide the expected pay range for the role in job postings. It is early days, but there is evidence that these initiatives are working to close pay gaps. How are they doing this?
How transparency during recruitment can help close pay gaps
The aim of pay transparency at the recruitment and promotion stage is to remove the historical undervaluation of underrepresented groups and close pay gaps. There is evidence that salary history bans, which have been in place for longer than pay transparency legislation, are working, in that women and people of colour are receiving higher offers. There is also early evidence that posting pay ranges also reduces pay gaps. Together, they work by making employers determine the pay up front, ensuring that candidates only apply if they are happy with the range, and not leaving a discussion of pay to the end of the recruitment process, which is where bias has a higher tendency to creep in.
Organizations work out what they should be paying for an advertised role by looking at the market data, the salary grade range, and the current incumbents in the role. From this, they know what to pay for years of experience, skill level, and any other relevant factors that they pay for. This means that they can create a narrow range of pay that they believe someone should receive for the advertised role. In the past, candidates have been able to ask for more and there has not been data to back up why giving more is not always a good idea. Today, organizations are increasingly enhancing their understanding of pay and pay frameworks they need to facilitate pay transparency.
Some commentators have pushed back and said pay transparency is the end of negotiation. It is not, but it is a change to more data-focused negotiation. Candidates must prove that they have greater skills and experience than the job advertised, which could warrant receiving an offer above the posted pay range. However, organizations must want those extra attributes. If not, the discussion is restricted to where within the posted range the candidate’s pay should fall.
How pay gap reporting supports the drive for equity
Reporting on pay gaps also helps to drive workplace equity. These regimes already exist in some European countries and the UK and will form part of the new Californian legislation. The new EU legislation goes further and includes a provision for employees to request the pay gaps for the group they are in for pay equity comparison purposes. These requirements force organizations be open about their situations and, hopefully, issue statements about how they intend to close their pay gaps.
Overall, pay gaps are not necessarily due to discrimination. Pay gaps relate more to the opportunity of underrepresented groups to get more senior positions, or positions in greater numbers in particular careers. Of the 500 CEOs that head up the Fortune 500, only 53 are women and six are black. To fix these gaps, effort is needed to understand the reasons that these groups do not have the opportunities that other groups do. Is it because you need a certain level of education, which automatically rules out people who could not afford a higher education? Is it because there is no flexibility for roles above a certain level, thereby removing opportunities for caregivers and people with disabilities? Are your senior roles all in one location, which excludes people who are not able to move? Each organization has its own reasons for why overall pay gaps exist. Those at the top need to understand the reasons, accept that they are responsible for those reasons existing, and for dismantle any barriers they do not accept. This may also mean that “those at the top” may have to change too. They need to embrace the idea that all should not look the same in a few years’ time.
Why we all need to play a part to #EmbraceEquity
This leads to the question of whether some people will lose out if we all #embraceequity to close pay gaps. But should they have to? A rising tide lifts all boats. We would love pay and opportunity to increase for everyone. And this is the aim of the ‘grow the pie’ economic thinkers. However, some boats are not being lifted currently. Knowing this, It should be the aim of the whole community to attempt to solve inequities for others, but especially for those who have historically been grounded.
To #embaceequity takes allyship, commitment, and an understanding of the intersectionality of different groups. It also takes an understanding of the privileges each of us has, so that they can ensure that they are good allies to those who have fewer. This is not easy. ESG and pay transparency legislation is helping us to start to act on persistent pay inequities, but we will only be able to truly solve inequality when everyone agrees that it is a problem and chooses to fix it.
We are not there yet.
But #EmbraceEquity is a start.
