Equal pay on a global scale


I came across an article recently that talked about a report on pay equality between genders from the World Economic Forum. I have to say it was a bit of a bubble buster for me.

Gender_Gap_2In a nutshell, it says that, on a global scale, it will take another 118 years for women to attain pay equality. That’s generations from now! How is that possible? That statistic can’t apply to the U.S. Have we forgotten about the Equal Pay Act of 1963 and the Lilly Ledbetter Fair Pay Act of 2009?

Before you start thinking that it’s a global report and has no bearing on how folks in the U.S. are being paid, you should know that the U.S. ranks 28 out of the 145 countries in the Gender Gap Index included in the report. In the section on economic participation and opportunity, the U.S. ranks 6 but in the sub-set of wage equality for similar work, the U.S. ranks 74.

What’s in it for me?

I take most information with a grain of salt so, for me, all of this begs the question, how valid is the data in the report? How was the evaluation made? Is it reliable? Does the report’s accuracy matter here in my own little corner of the world? Well, yes, it does. I need to know if I can trust the data. A more important question, though, is, do I believe that a gender pay gap exists in the U.S.? You betcha!

What’s in it for you?

Gender_Gap_1How about you? Is there a gender pay gap within your organization? If there is, what can you do? Begin with an analysis of your own workforce. If your intuition is spot on, consider initiating a “gender gap” conversation with your head of human resources.

If you are the head of HR, get the conversation rolling with the senior management team. Show them the data and explain the legal risks of pay inequality. Help them understand how it impacts productivity, as well as employee morale within a significant part of your workforce.

You may not be able to turn the tide quickly but you can get it moving in a more equitable, not to mention more legally compliant, direction.

Let’s talk about that analysis

You need to conduct a thorough analysis and that means you have to look beyond job titles and current pay rates to determine if there truly is a gender pay gap. Start with a data dump from your HRIS or payroll system that includes:

  • Employee name
  • Job title
  • Department
  • Supervisor name
  • Current pay rate
  • Hire date
  • Start date for current position
  • Gender designation
  • Race or ethnic designation
  • Most recent performance score

Why all the data?

Gender_Gap_3If you look at only employee gender and job title, then you’ll miss vital parts of the picture. For example, you may not have issues with gender pay equity but may have pay equity issues with other protected classes. Aside from that, you need to look beyond the surface of the data to find out why employees with the same job are being paid differently. Let’s look at an example in the chart on the right. It lists ten employees and their pay rates. Does it look as though there may be pay equity issues related to gender in this group?

Now, let’s look at a broader picture of the data for this same group. Does it look as though there are gender pay equity issues in the chart below?

Gender_Gap_4

A more complete picture of the data can more clearly reveal whether pay equity issues are present.

So, what’s the take-away?

Do your homework before sounding an alarm that there may be pay discrepancies. Look at the whole picture. Are there valid reasons for the differences in pay for the same job? Is there existing documentation that explains how the pay rates were assigned? Can those reasons be successfully defended in a labor department audit or in court?

Addressing the issue

If there are gender pay discrepancies in your workforce, that issue needs to be addressed with senior management. Before tackling that conversation, though, make sure that not only a thorough analysis of the data has been conducted but also that a plan to correct the issue is developed. Let’s face it; if you meet with senior management, share the data, and ask what to do about it, then you’re not really solving the problem. To do that, you need to provide a solid plan of action (POA) for addressing the issue that does not create additional, or maybe even bigger, problems in the long run.

The scope of your POA will be in direct proportion to the scope of the pay discrepancy issue. If the pay variances affect multiple positions across multiple departments, the same action may not be applicable in all instances. If the problem is isolated to one department with one supervisor then the scope of the POA may be a bit narrower. At this point, the POA doesn’t have to be a “formal” plan but it should be in draft form pending approval from the executive team. At the very least, it should be a list of bullet points that outline the steps needed to correct the pay discrepancy issues. At a minimum, it should include:

  • A short explanation of the issue
  • Why it puts the organization at risk
  • Corrective steps to be taken
  • An employee communication plan
  • Preventive measures to avoid future instances

Recognizing and addressing pay discrepancy issues is a difficult process. It is, however, worth the time and effort it takes to ensure your pay practices are legally compliant so don’t avoid calling attention to the issue. Exercise discretion and strive to provide a constructive solution that not only corrects the current problem but also prevents a repeated occurrence.

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3 responses to “Equal pay on a global scale

  1. Pingback: EEOC Proposes Adding Pay Data to Annual EEO-1 Reports | CompAble

  2. I need to know if I can trust the data. A more important question, though, is, do I believe that a gender pay gap exists in the U.S.? You betcha! Where is this information?

    Like

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