Despite pay transparency becoming more common, pay inequities continue to plague organizations and, by extension, HR pros.
“The two biggest factors why we haven’t made pay equity in the last 30 years are the fact that women have babies and the cultural perception in our relationships and society that men are the breadwinners,” Heather Bussing, employment lawyer and co-author of Get Pay Right: How to Achieve Pay Equity that Works, previously told HR Brew.
She recently shared what people leaders can learn about pay inequity from her book.
This interview has been edited for length and clarity.
What can HR pros learn from your book?
Starting with the money makes all the difference in the world, that we are not going to change discrimination, we are not going to change the fact that women have babies, but what we can change is getting pay right and making sure that people doing the same work are paid the same [and] paid fairly.
How can HR get pay right?
Ideally, you start with a compensation philosophy, figure out what your strategy is, and have a clear picture of what’s important, how you’re going to do it, and how and why people make what they make. But that doesn’t usually happen. Most people are dealing in a very ad hoc system, where people get hired according to what the market is. And, people who have been there for a long time should probably have raises, and people, who are newer, are making more than people who have been there a while with more experience. And, so compensation is a lot of work to stay on top of, because things change in the world that are not in our control.
How can HR stay on top of the market to ensure employees are being compensated fairly?
Benchmarking is probably the easiest, most available tool out there, and that means checking where you are in the market, for your geographical location, for the role that you’re hiring, and within your industry in general, because if you have remote employees, you’re competing with the entire country and possibly the world. So, market dynamics are very individualized now, depending on who you need to do what work, and where, and how that work can be done. And, that has changed dramatically.
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You mentioned having a “pay philosophy.” What does that look like?
It’s the general idea of where labor costs fit in the budget, what priority they have, what types of behavior we want to reward with pay. And, so the way you design your total rewards, the people you promote, all of those things tell you about an organization and who and what they value. And, there’s an opportunity to step back and go, “Okay, well, what are we doing here? What problems are we trying to solve? And who and what do we value? And do we have this right?” And, it’s a lot of work. And, sometimes companies will sit down and do that early on. When you hit a big growth stage, that’s another opportunity, but it takes real commitment and work, and so it doesn’t happen that often.
What are your thoughts on location-based salary ranges?
This is something that is really difficult, because from the employees’ perspective, they’re doing the exact same work, and where their chair is should not matter. And, if they were wise enough to find a place that they could live, where their money went further, [that’s] generally considered smart financial wisdom. But, companies are designed to make the most money that they can. They’re designed to make profit…I don’t think there’s an easy answer to that. I think that’s partly why companies are more comfortable having people come back to the office and live close. It makes these questions easier, and more comfortable, and more familiar.