Stakeholders at all levels of businesses — investors, boards, executives, employees, even consumers — are calling for tangible evidence of progress toward racial justice. Diversity, equity, and inclusion (DEI) metrics are increasingly tied to executive compensation. Environmental, social, and governance (ESG) attributes are tracked by a growing number of investors.
And while DEI programs abound, progress can be slow and results elusive.
You can take on pay equity right now
Savvy leaders are focusing their attention on the often overlooked letter in “DE&I”: equity, and specifically pay equity.
Pay equity is concrete, solvable, and a precise measure of both DEI and ESG progress. Bank of America recently published a study that found ‘2 in 5 respondents [U.S. private investors] would be more likely to consider investing in a company that provides pay equity for all employees’’.
Pay equity is also a must-have component of racial justice. While it’s critical to have more diverse teams, have you really made progress if you don’t pay all employees fairly for the work that they do?
A recent report from Just Capital found that “the nation’s 100 largest employers are more likely to disclose baseline DEI commitments, but less likely to disclose actions that show accountability toward progress.” This may be because they aren’t taking action, which seems to be the case for many companies. They feel comfortable talking about DEI and their efforts but aren’t actually acting on any of those initiatives to drive true change. Performative statements that aren’t backed by action are increasingly seen as brand degrading. Solving pay disparities based on race is a concrete way to show an authentic commitment to racial justice.
Unfortunately, the impact of COVID-19 has only widened racial pay gaps, which have a disproportionate effect on Black and Latino families.
In a recent editorial for The Hill, Ayanna Fortson, Vice President of Housing and Community Development at National Urban League, and Maria Colacurcio, CEO of Syndio, discussed how inequitable pay for employees doing substantially similar work is often overlooked as a factor contributing to the widening opportunity gap and wealth gap in the U.S. They wrote:
“Focusing on pay equity is a powerful lever for policymakers and business leaders alike to undo generations of economic damage and create fair workplaces that benefit all employees.”
Expanding the “fair pay” conversation beyond the lens of gender
One hurdle organizations face is the outsized focus on gender when it comes to equal pay. The same report from Just Capital found that only 31% of the largest US employers are addressing racial pay equity.
When you expand the lens of pay disparity beyond gender to racial inequities, it’s evident that the two are interconnected. Equal Pay Day, for example, which was March 24 this year, is actually white women’s equal pay day. This day marks how far into a year a white woman must work to make the same as a man the previous year. Black, Latina, and Native American women are at an even further disadvantage than white and Asian women when it comes to fair pay. In reality, there are many equal pay days, starting on February 23 for Asian women and extending into August for Black women, September for Native American women, and October for Latina women. Fortson and Colacurcio wrote:
“The very existence of multiple Equal Pay days underscores that pay equity isn’t just a gender issue — it’s a race and ethnicity issue, too.”
The good news is, organizations taking on equitable pay regardless of gender AND race, are finding that the benefits far outweigh the challenges. According to Colacurcio and Fortson:
“Pay equity can be a strength that advances fairness in the workplace and beyond. It is also a way for employers to attract and retain the best talent, offering companies a competitive advantage.”
How technology fast tracks racial pay equity
Fair pay doesn’t have to be hard. A pay equity analytics platform, such as Syndio’s PayEQ®, make it fast and easy to analyze pay gaps, resolve issues, and address root causes. You can learn more about how PayEQ will fast track fair pay within your organization at the link below.