Equal Pay – A current state analysis

Pay Gap, Equal Pay, Pay Equity are all terms that get batted out quite frequently but often get misconstrued in conversations. When you consider those terms, they inherently evoke a sense of urgency and action that needs to be taken. Years of effort have had marginal impact on the situation and it does truly feel like we are reaching a point where this has become a movement that everyone is on board with.

Getting clarity on the definitions is only the tip of the iceberg if you consider how long an impactful change will need. The People Analytics Forum at REMNET discussed this very challenge of achieving Parity in Gender, Ethnicity etc. and what is needed next for us to take meaningful action from the analytics perspective. Here are some of the key findings;

1. Definitions and methodologies need to be consistent
   1. Equal Pay is defined as same pay for the same job
   2. Pay Equity refers to ensuring the same pay for jobs of equal value
   3. Pay Gap is the difference in median pay for groups
2. Availability of data – These terms have been traditionally associated with Gender but there are multiple other variables they can be analysed by, for e.g. Ethnicity, Age etc. The majority of organisations have less than 50% data on Ethnicity which makes it difficult to get any meaningful results, although the SSC and Treasury reports do indicate we may have a problem there as well. Efforts to collect these pieces of information need to be stepped up.
3. Privacy and Security of data– Privacy was stated as one of the constraints of gathering and analysing this data and people need to be assured their data is being taken care of.
4. Perceptions – Myths and perceptions of bias also play a big role in employees’ willingness to share data. Demystifying the use of this data and propagating what it is actually used for will definitely help in gathering more information.
5. Recruitment – The entry point of an individual’s pay plays a big role in the equity equation. Managers need real-time information to make the right decisions.
6. Parity – The ultimate aim is Parity across the organization and that means we need the ability to track peoples’ career growth/breaks, remuneration increases over time to understand the factors that play an important role in influencing the outcome.

Addressing Equal Pay and Pay Equity through an organisation’s remuneration and rewards strategy doesn’t necessarily result in a reduction of the Pay Gap. In order to achieve parity, organisational need to focus on removing the glass ceiling and providing equal opportunities. There are many other previously researched factors like negotiation skills, unconscious bias, transparency etc. that need to work in tandem with better visibility for decision makers to make Equal Pay, Pay Equity and a 0% Pay Gap a reality with the ultimate aim of parity across the organisation.

Dean Webb, Barbara Daxenberger, Ben Choo, Thabitha Nisbett and Lauren Humphrey

People Analytics Committee, REMNET