Are you aware of Canada’s persistent wage gap? A 2018 Statistics Canada report estimated women workers earned 87 cents for every dollar earned by men, despite the Employment Equity Act and Pay Equity Act existing to prevent inequalities – and for racialized and intersecting identities, the shortfall is even more severe.
Pay equity is equal pay for equal work. But when pay inequity resides in your workplace, you’re telling some people – based on their gender, race, ability, and background – that they are less valuable than others.
We (virtually) sat down with our equity, diversity, and inclusion (EDI) consultant and President of Entelechy Consulting, Darius Sookram, to name the ways in which Canadian companies can identify their own disparities and make a difference in their workplace.
You can’t do the work without knowing where the issues lie, which is why your starting point should be conducting a pay audit.
A fully encompassing pay audit lets you identify pay disparities among your workers based on their gender, race, ability, and background. HR is typically involved in this process, but depending on the size of your business, you may also involve your finance personnel, EDI committee, and/or an outside firm that specializes in pay analyses.
It’s possible you don’t have access to information beyond factors like sex, education, salary, length of service, and performance, so we recommend hosting an anonymous survey to collect the most up-to-date and accurate information available. After the surveys are completed, organize your information in one place so it’s easy to read and understand.
It’s at this point in the audit where you should also determine your methods for evaluating employee compensation. How do you determine pay at your company? Do you utilize performance reviews? How do factors like education and seniority apply? What factors play into job value? Document this information.
Look for potential differences in pay between job classes and document them. Once identified, investigate their causes. Causes might include:
Determine whether the causes are justified and where changes need to be made.
Once you’ve identified pay differences and their causes, it’s time to make changes.
Adjust any wages that need to be changed, eliminating instances of illegal and unfair pay differences. This may include increasing or even reducing pay in some instances. Explain to employees why you are adjusting their pay and document the decisions you’ve made.
Don’t rely on salary history in setting pay, that just perpetuates past inequities.
Employees come and go, people get promoted and companies fold – so even if you make necessary changes, the issue of pay inequity can creep up again. To keep your wages in check, conduct an audit every year.
When it comes to pay equity, revealing how you pay your people is a part of that process – speak to leadership about what that looks like at your company relative to your culture and values. Will applicants have access to pay information? Will employees be aware of pay bands structures company-wide?
In a recent blog, we talked about pay bands and how their implementation could be beneficial in creating consistency in the hiring process, performance management, and career development. The implementation of pay bands is beneficial for calculating compensation metrics that highlight under-compensated and over-compensated employees, so you can address pay inequality and inequity at your company.
Implementing a strong equity, diversity, and inclusion (EDI) strategy is pivotal in developing a workplace of inclusivity and belonging – this includes pay.
But without the right tools and training, an effective strategy will fall flat. We recommend connecting with an EDI consultant and/or training partnerships that will work with you to correct underlying disparities. At Humi, we’re proud to work with Entelechy Consulting, where we’re working toward building the foundation for an effective EDI strategy within our own workplace.
Although it’s always the right time to connect with an EDI professional, the annual pay audit is a great place to start, as consultants can work with you to develop surveys, help HR determine market rate for positions, and give a second opinion to eliminate bias.
Unconscious biases have a critical effect on our judgement and in turn, our business. They cause us to make decisions in favour of one person or group in detriment to others. Even in the early stages of recruitment, an applicant’s name can be enough to influence your opinion.
While it’s impossible to completely omit human bias, unconscious bias training can be helpful in reducing harmful bias in the hiring process. But if programs are inaccessible to your company right now, there are a few things you can implement right now.
As mentioned above, connecting with an EDI consultant is a great starting point. They’ll be able to help you define what diversity means at your company and set business goals that involve removing unconscious bias from hiring and promotion structures. Revisit your job descriptions (see section below for detail) and be disciplined about asking all applicants the same questions, which allow managers and leadership to base decisions on informed comparisons rather than first impressions.
Darius explains that, “Discrimination through pay not only establishes economic inequalities, but it raises issues of representation, career development, company retention, opportunities for growth, and belonging.”
If applicants can’t see themselves within your organization, diverse applicants simply won’t be interested in working at your company. What is your diversity statement? Your inclusivity statement? What policies exist to support women, racialized people, and persons with disabilities? Work with your hiring managers, HR reps, and EDI professionals to address these gaps so you can broaden your reach.
There is no real change without understanding and intention from the top down. Is elevating your people and levelling the playing field a common goal at your company? How involved is leadership in building a truly equitable, diverse, and inclusive workplace culture? Do they have a hand in the audit?
It’s possible that change without support and intention from CEOs, senior management, and other key stakeholders will result in temporary change and band-aid solutions. So, get your leaders involved early on.
It’s important to acknowledge that the reason many visible minorities don’t have the same qualifications as their able-bodied, cisgendered, white male counterparts is due to the systemic barriers that prevent them from accessing opportunities. But that doesn’t make them less capable.
Darius advises that unique mentorship for diverse members of your workplace are the way to go, to assist talent in their professional growth and development. Work with HR and/or an EDI consultant to connect racialized workers with other BIPOC professionals in and outside of your workplace, and invest in programs, courses, and other materials to provide the right toolkit for diverse talent to succeed.
“It's not simply good to address the wage gap, but it's also good for business. In fact, when companies are more diverse they perform better,” Darius explains.
According to McKinsey and Company's Diversity Matters report, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians. Additionally, companies in the top quartile for gender diversity are 15% more likely to have financial returns above their respective national industry medians.
In Darius’ words – “Being intentional with pay, leadership engagement, diversity recruitment, retention, and programs matter so much. When we aren't intentional with our hiring policies and programs we can end up perpetuating systemic inequalities that undervalue people. We need to move away from past pay history and move towards balancing the playing field for women and racialized groups. Beyond auditing, we can be specific with our pay, provide unique mentorship and promotion opportunities, apply a diversity lens to hiring, and continue equity, diversity and inclusion training to build an inclusive culture that helps people feel like they belong.”
For more information on how you can start building a culture of equity, diversity, and inclusion (EDI), watch our recent webinar featuring Dairus and Humi’s People and Culture Specialist, Sneha Deokie.
I’m the Director of HR at Humi, and I’m obsessed with all things people and human resources. Throughout my time working in a range of industries, I’ve learned that one thing is clear: the world of work is changing and HR professionals are leading the charge.
I believe that businesses should know their people as well as they know their product. But people are complex, and the solutions aren’t always easy. That’s how Think with Humi will help.
Written by me, this newsletter is designed to give you insight into the relevant and raw people challenges, and give you the tools to enable you to continuously to shape the future of work.
Written by a people leader, for people leaders.