Today, as advocates celebrate Equal Pay Day, we’ll be reminded that there is a pay gap between men and women. But calculating the differences is far more complex than applying a simple formula, and the causes remain hard to explain.
No employer deliberately wants to shortchange or exclude the talent they need to succeed. Pay equity is good for everyone. So, we at SHRM, the Society for Human Resource Management, are focused on pay equity solutions. We’re not waiting for a legislative fix. Every day should be Equal Pay Day, and it begins with HR best practice.
There is a value proposition to work—the agreement struck between the employer and the employee. Candidates want an opportunity to succeed at a great workplace, and employers want to hire great talent. It is critical that each party understands the benefits provided by the other, including and especially compensation.
That’s why the most important element of an equitable pay strategy is transparency. It begins with HR, and it begins at the start of the hiring process. It’s not necessary to wait until the last minute to talk about compensation, and candidates should not be discouraged from negotiating.
Nor should employers rely on a candidates’ salary history as a method to determine compensation. Today, the nature of work is rapidly changing as new tools and technologies are introduced into the workplace. The candidate’s title, job description and pay may not have changed since the salary was determined, but it’s likely his or her duties and skill sets have. Today, talent professionals encourage employers to ask about pay expectations rather than basing it solely on salary history.
How pay decisions are made should also be as clear as possible. Unfortunately, many companies are still reluctant to do so, according to the latest data from WorldatWork, which studies compensation trends. Last year, just over 40 percent of employers shared with employees how their pay programs are designed; base salary ranges were shared by 38 percent of employers.
Those numbers appear to be dropping, which is concerning amid this war for talent we are all engaged in and the growing importance of inclusive workplace cultures. Sharing pay policies with employees can improve engagement and head off doubts that the employer is playing fair with compensation.
Transparency isn’t just for inside the HR suite. We encourage employers to make it clear that candidates can discuss pay during the interview, and employees are free to discuss it in the workplace without penalty.
We all know that compensation is a powerful tool for attracting top talent. But pay transparency is equally powerful in keeping employees engaged, included and enthusiastically serving as your talent ambassadors. Shining a light on pay is one thing organizations can do to ensure that everyone is being treated equitably in the workplace.