WorldatWork has designated October as “Workplace Equity Month.” To shine the spotlight on issues of pay equity, diversity and inclusion, and social justice, Workspan Daily will be publishing various articles throughout the month on related topics. Visit our Workplace Equity page for more content on this critical area of total rewards.
Diversity, equity and inclusion are three different concepts that work together to create a workplace that allows all employees to bring their best self to work and reflects the communities in which we work and live.
Diversity focuses on outreach — implementing a recruiting plan that casts a wide net to attract qualified applicants from a cross section of the community. Inclusion exists when all employees, regardless of race, ethnicity and gender, feel that they belong in the workplace.
Equity refers to equal access for all employees to workplace opportunities. Achieving equity in the workplace necessitates a close look at the full range of HR practices, including recruiting, hiring, promotion and compensation practices as well as trends in both voluntary and involuntary terminations.
Often, when we talk about pay equity, the discussion is focused on determining if there are disparities in pay based on gender, race or ethnicity and making pay adjustments to correct any unexplained differences. In other words, we rarely look for the “E” across personnel practices and how the lack of equity in other areas impact overall pay equity.
A Roadmap for Eliminating Barriers to Equity
Federal contractors are required to collect and retain gender and race data in order to prepare annual affirmative action plans (AAPs). AAPs allow contractors to review a snapshot of their workforce along race and gender lines. A review of their workforce, job groups and goals analyses, in combination, quickly reveal if certain negative trends exist. For example, the organization might find that women or minorities are concentrated in certain departments or levels within the company that can limit their promotion and compensation potential.
Non-federal contractor employers are not required to collect this data, but those that do so voluntarily can run similar reports from their human resources information system (HRIS). Employers should sort the data by departments and/levels to identify negative and positive trends.
Periodically Assess the Success of Your Recruiting Efforts
Title VII of the Civil Rights Act of 1964 as amended, Executive Order 11246 and similar state and local anti-discrimination laws prohibit employers from taking applicants’ gender, race and ethnicity into account during the hiring process.
Although the laws were initially implemented to prohibit discrimination against women and minorities, the laws apply equally to all genders, races and ethnicities. Race, ethnicity or gender-based decisions that intentionally favor women and minorities are just as unlawful as those that intentionally favor whites and males. Employers can get creative with their recruiting, however.
In order to ensure that recruiting efforts yield a diverse pool of qualified applicants, employers should track each recruiting source. They should then assess the success of recruiting efforts at least annually and drop those sources that do not yield a diverse qualified talent pool, replacing them with new sources of applicants.
This is a time for employers to think outside the box and get creative. Consider implementing longer-term efforts to add diversity such as apprenticeships or internships for students from diverse local high schools.
Review Hiring and Promotion Processes for Patterns
Assuming recruiting strategies are effective and discrimination is absent, the pool of those selected should closely mirror the applicant pool. If this is not the case, it is critical that employers take a closer look at each stage in their selection processes to determine where diverse candidates are exiting the process and why.
For example, is the gap occurring at the resume review stage for entry-level positions that attract a high volume of applicants? Are the recruiters’ screening questions blocking diverse candidates? Is the employer losing applicants at the interview stage? Are there steps in the selection process that are not necessary because they assess qualifications already considered elsewhere in the process?
Possible corrective actions include:
- Standardizing procedures at each stage in the hiring and promotion processes as much as possible — resume review; interview processes and ultimate selection criteria.
- Ensuring recruiters have clear guidance on screening questions;
- With respect to initial hiring decisions, consider implementing a blind resume review at the initial stage.
- To the extent possible, conducting panel interviews with a diverse slate of interviewers.
- Identifying high-potential candidates for promotion and implement mentoring or other developmental programs to position these employees for success. Note: Developmental opportunities must be available to all employees who meet the selection criteria, regardless of gender, race and ethnicity.
- Train everyone involved in the selection process in the employer’s non-discrimination obligations and on implicit bias.
- At least annually, conduct a privileged analysis of the company’s hiring and promotion decisions to determine whether there are disparities based on race, gender or ethnicity.
Performance evaluation processes are somewhat subjective by necessity. However, there are strategies for minimizing subjectivity and bias at all levels.
- One-size does not fit all when it comes to performance evaluations. Performance criteria should be tailored to the type and level of position.
- Transparency around performance criteria and expectations is critical. Ensure all employees at all levels are aware of the standards against which they will be measured and how to exceed expectations.
- Performance evaluations should be reviewed to ensure consistency across similar positions and supervisors.
- Train managers on how to conduct an effective, consistent and unbiased evaluation.
- Consider conducting a privileged assessment of the performance evaluation processes to determine whether there are disparities based on gender, race or ethnicity.
Conduct Exit Interviews
Knowing why employees are choosing to leave the company is critical information. Most employees are reluctant to share the true reasons for leaving for fear of retaliation should they need to use their former manager as a reference later. Be transparent to exiting employees about the process — who sees the information, why it is being collected and a commitment to keep confidential the identity of the employee to the extent possible. Consider allowing employees to submit information anonymously. Finally, develop a simple and consistent approach to collecting information from departing employees.
Reaching Pay Equity
Unexplained pay disparities rarely occur in a vacuum. As discussed above, there is always a driver behind the differences and those can stem from any combination of the employment processes discussed above. However, this does not mean that employers do not need to monitor pay practices and build a structure about those practices to minimize bias. Pay equity is a critical component of building a diverse, equitable and inclusive workforce.
- Train everyone who has input on starting pay and pay increases on non-discrimination obligations under federal and state law, implicit bias and on importance of making consistent pay decisions based on objective, job-related criteria.
- As of Aug. 7, 19 states and 21 cities have passed salary history bans. Instead of asking applicants to provide their pay at their last position, ask for their pay expectations. Determine starting pay based on job-related factors such as the skills, experience and potential that the candidate brings to the table compared to the market and your other similarly situated employees.
- Conduct annual privileged pay equity analyses. Dig into any identified disparities to determine the drivers behind the differences. Consider whether the disparity stems from base pay or add-on compensation such as bonuses; assess starting pay; and look for trends. Make corrections where there are unexplained pay gaps.
As employers take stock of their personnel process, keep in mind the “E” in DE&I. All three concepts — diversity, equity and inclusion — must work together in order to create and maintain a successful diverse and inclusive workforce.
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About the Author
Consuela Pinto is a shareholder and head of the pay equity practice at FortneyScott.