Pay equity is about ensuring equal pay for equal work. When disparities exist, it signals to employees that their gender, race, ability, or background makes them less valuable. Here’s how your company can address and dismantle pay inequity.

  1. Conduct a Pay Audit

Start with a Clear Scope: To identify pay disparities, begin with a pay audit that examines compensation across gender, race, ability, and background. Typically, HR leads this process, but depending on your organization’s size, finance personnel, an equity, diversity, and Inclusion (EDI) committee, or an external firm may also be involved.

Gather and Organize Data: Host an anonymous survey to collect the most accurate and up-to-date information. This data, once organized, should be easy to read and understand. Determine how your company currently evaluates compensation, considering factors like performance reviews, education, seniority, and job value.

  1. Analyze and Review Findings

Identify Disparities: Examine the data for pay differences across job classes. Investigate the causes, which might include gender, race, age, ability, education, experience, or performance evaluation scores. Assess whether these causes are justified and identify necessary changes.

  1. Take Action to Correct Disparities

Adjust Wages: Make the necessary adjustments to eliminate unfair pay differences. This might involve increasing or decreasing wages in some cases. Clearly communicate the reasons for these adjustments to your employees and document your decisions.

Ongoing Monitoring: Pay equity isn’t a one-time task. Conduct annual pay audits to account for changes due to employee turnover, promotions, and company growth. Avoid relying on salary history, as it perpetuates past inequities.

  1. Foster Transparency

Communicate Pay Structures: Transparency in pay structures is crucial. Discuss with leadership how pay information will be shared within your company. Decide if applicants will have access to pay information and if employees will be aware of company-wide pay bands.

  1. Implement Pay Bands

Consistency in Compensation: Implementing pay bands can help create consistency in hiring, performance management, and career development. This approach makes it easier to identify and address pay disparities by providing a clear framework for compensation.

  1. Seek Expert Guidance

Engage EDI Consultants: An equity, diversity, and inclusion (EDI) strategy is essential for fostering an inclusive workplace. Partnering with EDI consultants can provide the tools and training necessary to address underlying disparities and eliminate bias.

  1. Address Bias in Hiring

Reduce Unconscious Bias: Unconscious biases can significantly affect hiring decisions. Bias training and consistent hiring practices can help mitigate these effects. Ensure job descriptions are clear and ask all applicants the same questions to make informed comparisons.

  1. Broaden Inclusivity Efforts

Diverse Representation: Develop clear diversity and inclusivity statements. Ensure policies support women, racialized individuals, and persons with disabilities. Collaborate with HR and EDI professionals to address gaps and broaden your reach.

  1. Leadership and Mentorship

Top-Down Commitment: Effective change requires commitment from leadership. Ensure that elevating and supporting all employees is a shared goal. Engage senior management in building an equitable and inclusive workplace culture.

Mentorship Programs: Systemic barriers often prevent visible minorities from accessing the same opportunities as others. Develop mentorship programs to support the professional growth of diverse employees. Connect them with mentors within and outside your organization and invest in their development.

  1. Take the Wage Equity Pledge

Starting your journey towards pay equity can be as simple as taking the Wage Equity pledge. This pledge commits your organization to fair pay practices and provides a framework to guide your efforts. By leveraging this information and resources from Wage Equity, you can create a just workplace where every employee feels valued and supported. Taking the pledge is a step towards not only addressing wage disparities but also fostering a culture of equity and inclusion.

The Business Case for Pay Equity

Benefits of Diversity: Addressing pay inequity isn’t just the right thing to do – it’s good for business. Research shows that diverse companies perform better financially. By being intentional with pay equity, leadership engagement, and diversity recruitment, your company can foster an inclusive culture that benefits everyone.

By taking these steps, your organization can work towards eliminating pay inequity, ensuring all employees feel valued and supported. Pay equity is not only a moral imperative but also a strategic advantage in today’s competitive business landscape.