When you’re considering risk management, pay equity is a hot topic. Pay equity affects all special interest groups and is not just a way to address the gender gap. It’s a complex topic that our team has been studying for several years, but avoiding issues boils down to two key things.
1. Don’t ask candidates about their salary history.
Until recently, it was common practice for a recruiter or hiring manager to inquire about a candidate’s salary history during an interview. That information was then used to make the candidate an offer. Some states, such as Massachusetts and California, have already passed laws making it illegal to ask a candidate about their pay history. The argument is that asking for information about salary histories puts candidates at a disadvantage because the salary offer is not determined by job requirements but instead is based on previous and potentially irrelevant information.
We understand the importance of identifying early in the process if the candidate’s desired salary range is in sync with what the organization can offer. Asking about a candidate’s salary history is not necessary in making this assessment. Rather than asking about a candidate’s previous salary, our recruiting team asks, “What salary range are you targeting for this position?” This helps us identify if the candidate’s salary expectations fit within the allotted budget for a specific role.
Today’s candidates are well informed; if there are any doubts about pay equity within your organization, you run the risk of losing stronger, savvier candidates. Repeatedly losing those top candidates can have a negative impact on your organization for the long term.
2. Establish a transparent pay structure for your organization.
An established pay structure based on job descriptions and competitive market values is one key to pay equity. Formal salary surveys can be purchased to establish competitive rates, or free resources such as Salary.com, Payscale.com, or Glassdoor.com can be utilized to obtain a general reference point.
With a pay structure—that’s regularly reviewed and updated—in place, recruiters and hiring managers will have the resources they need to make equitable job offers. The entire organization benefits from a consistent approach that prevents actual or perceived disparity.
When an organization takes an active role in addressing pay equity issues—by using job descriptions to create a pay ranges and a pay structure—it pays off. Transparency about pay creates a sense of trust with employees, it sets expectations about how employees are compensated in your organization, and it helps communicate to candidates that they will be treated fairly.
There’s no quick fix to solve pay equity issues; it takes time, effort, and care to implement a structure and process. But with the proper approach, guidelines, and procedures in place, it’s possible to ensure that recruiters and hiring managers are hiring and retaining talented employees at competitive and fair rates of pay. As HR professionals who seek to support organizations as well as employees, this topic must be at the top of our agenda.