Equal Pay Day is an anti-holiday — one that’s meant to raise awareness for the gender pay gap in the U.S., but that, ultimately, shouldn’t exist at all.
It symbolizes how far into the year the average woman must work in order to earn what the average white man earned in the previous year. But Equal Pay Day isn’t a single day. It’s really an eight-month long season that includes:
- Asian women’s equal pay day (Feb. 23)
- Black women’s equal pay day (Aug. 3)
- Native women’s equal pay day (Sept. 8)
- Latina equal pay day (Oct. 21)
If you’re a CEO, a CHRO, or a Total Rewards leader, you know the importance of pay equity. You’ve probably already taken steps to fix any inequities. Yet, I’m guessing there are still challenges in your way. So how can we start celebrating Equal Pay Day on January 1 for everyone, regardless of race, gender or ethnicity?
1. We need an equal pay day for all.
Pay equity isn’t just a gender issue. It’s a race and ethnicity issue too. Due to systemic racial inequities, the opportunity gap for Black women, Latina women, and Native American women results in substantially lower pay for those groups. And the pandemic made the situation worse.
Focusing on pay equity is a powerful lever to reverse course on generations of economic damage and create fair workplaces that benefit both your employees and your business.
Running a pay equity analysis, publishing results that include gender and ethnicity and race, and taking immediate action to resolve any inequities you discover is a tangible, measurable step towards change. It also sends a powerful message to employees, candidates, and consumers that you’re committed to fair pay for all employees.
To learn more about how to fix racial pay inequity, download our report on Fixing Racial Pay Inequities.
2. Stop the cycle of “start low, stay low”.
The single most significant factor leading to a gender way gap is starting pay. It’s not education, or experience, or location. It’s that men and women start from a different baseline. And it will take years of outperforming a man for women to merely catch up.
This “start low, stay low” problem also worsened during the pandemic. A Syndio survey found that while men leaned into work, women put in longer hours caring for their homes and children. Women were already behind. 2020 set them back further.
Eliminating the gender pay gap requires breaking this cycle by taking a close look at starting pay and removing bias before pay gaps have a chance to develop. One strategy that many organizations are taking (and that’s now part of the law in more than half of all US states) is to never ask for prior salary when hiring. Another is to publish pay ranges in job descriptions, taking the guesswork out of starting pay for employers and candidates. The most progressive organizations are going even further, looking at both market rates and current employees’ compensation to ensure starting salaries for new hires are equitable from day one.
Getting starting pay right reduces compliance risk, lowers remediation costs, and increases satisfaction for employees who want to work for fair and ethical organizations. It’s also, plain and simple, the right thing to do.
3. Move pay equity out of the shadows.
Another reason why pay equity continues to fall short or fail despite leaders’ best intentions is that it still lives in the shadows. It’s run by lawyers, hidden behind attorney client privilege, and viewed through the lens of risk mitigation.
When a company is mired in this old-school approach to pay equity, chances are you also get stuck with old-school solutions: manual, one-off analyses performed in-house or with law and consulting firms that leave even the best, brightest, and most progressive enterprises battling expensive, brand-damaging lawsuits. It’s an untenable approach for a modern business.
Pay equity has the potential to be so much more. It’s a lever to create a fair workplace, to enhance your brand, and to attract, engage, and retain the top talent you need to succeed as a business.
That’s why so many CHROs and Total Rewards leaders are choosing to take more ownership of the process by using pay equity software instead of manual processes. Pay equity analysis software allows organizations to conduct ongoing, bias-free analysis with more transparency and lower costs than traditional methods.
4. Rethink “transparency”.
Transparency is a loaded word, and can mean different things to different people, especially when it comes to pay equity. When we advocate for pay transparency, we are not advocating for every employee to know what everyone else makes. Employees don’t want that, and neither do you.
Rather, employees want to know: Why am I paid what I’m paid? Where am I within the range of my employee group doing similar work? Is my company examining pay equity? Are they committed to fixing inequities on an ongoing basis?
Companies that can answer these questions are operating from a place of transparency, and it pays off. According to Gartner’s Addressing Pay Inequity report, when employees perceive a credible organizational effort to address equity, the company reports the following talent improvements:
- Performance: 20% more employees are willing to put in extra effort to get a job done.
- Attraction: Nearly twice as many employees would recommend their organization as a great place to work.
- Turnover: 24% fewer employees say they are actively looking for a new job at a different organization.
Nature abhors a vacuum; if you aren’t transparent about pay, employees will fill the void with information they get elsewhere. Communicate from a place of confidence by focusing on creating fair pay policies that do what they’re supposed to do. For example, if you say you pay for tenure, make sure you’re paying for tenure! Then share those pay policies with employees, and explain your pay equity actions and response plan.
To learn more about establishing and maintaining fair pay policies, download the Fair Pay Policy Guide.
5. Back up your vision with incremental goals.
At Syndio, we have a saying that any goal set four or more years out is another way of saying “this will be some other person’s problem to solve.”
Often we hear aspirational goals like “we will solve x problem by 2030.” But if those goals aren’t tangible, will they drive actual results? Pay equity is no exception. It’s important to have a vision, but it’s equally important to set incremental goals that you can achieve, track, and continuously improve upon.
This may mean analyzing pay equity for one group or country before expanding to company-wide or global analyses. It may also mean including pay equity goals within the performance review cycle and annual cadence, since most leaders are compensated on an annual cycle. And if, at a minimum, you’re running an annual analysis, how can you do it more often? How can you incorporate fair pay into organizational changes throughout the year?
These ideas are just the tip of the iceberg. But in the spirit of incremental goals, every step is a step forward and we want to partner with you to fast-track your pay equity journey. To get started, request a demo here.