Have you heard whisperings that your employees think their pay isn’t fair? Or has it been a more direct complaint? This is often when clients come to us for help with their compensation strategy (or lack thereof). We recently heard from a company in high-growth mode.
The company had been getting complaints for a period of time from employees that their pay was “unfair.”They had heard it enough times to be concerned and were also aware that their HR department was under-resourced for the oversized growth goals placed in front of them.
It is not enough today to simply look at pay across the board or just by department or title because you will miss the real insights about pay inequity. We worked with this company to address market gaps at a company level but also at a department, gender and ethnicity level. We also helped identify what market was, which was critical for employee communications.
We produced tangible data on the client’s composition (which they had never done) and also provided a concise breakdown of pay gaps from each category. Of course, there were surprises.
When reviewing salaries within the marketing team, for example, it looked like female employees were getting paid more. However, as we drilled down into the data we saw a gap: the average level for women was 4.5 and for men it was 3.2, but on average men were receiving 15% of the overall pool. What had triggered this inequity? It turned out that on negotiating salary for equity tradeoff discussions the male candidates were far more aggressive during the final offer stages especially with equity versus women.
One of the largest insights turned into an actionable take-away: the client has now implemented standard equity ranges that are non negotiable unless pre-identified as a specialized role.
In addition to setting a compensation strategy, our client’s recruitment team used the departmental breakdown in their new hire requisition kick off meetings with hiring managers. By integrating gender gap and ethnicity analysis into these meetings, the head of recruiting drove direct change in how the teams sourced candidates, creating much more precision on role level, gender and ethnic category.
Within two quarters, the client saw a great difference in the diversity in the candidate pipeline, realizing 30% more non-white males in the non-technical functions of sourced-qualified candidates. Ultimately, this is what will help the client realize its DEI goals that support a workforce that can respond to the challenges of our diverse and complicated world.