Achieving pay equity - what can employers do?

The pay gap figures over the years reported by StatsNZ and from our own analysis at Strategic Pay, remind us that while we have made some progress towards pay equity, we still have a long way to go. 

Our analysis of around 250,000 employees’ data over the years shows some reduction in terms of the pay gap but also continues to highlight the key issues in relation to pay gap analysis and statistics: 

• that the overall pay gap statistic often fails to represent the real gap and the true picture emerges when you explore the detail.

• a key contributor to the pay gap is occupational and vertical segregation – i.e. the type and level of roles in which women and other disadvantaged groups are employed.   

We cannot fix employment and pay disparities easily – we need to address the systemic and structural gender and racial inequality which exists in the labour market and in society.  

Nevertheless, organisations can contribute to fixing this within their own organisations as well as contributing to equity in the workforce.

Addressing pay inequities is a good place to start because it focuses organisations on the broader employment issues that result in a pay gap. 

Take a more strategic approach

To increase the chances that organisations in New Zealand/Aotearoa will achieve pay equity we need to take a more strategic approach and commit to building a culture within our organisations where everyone can contribute and develop. 

Closing the pay gap and keeping it closed requires employers to ensure a broad range of human resources and employment practices are considered in light of their impact on pay equity. 

• Start by looking at whether you have a pay gap for disadvantaged groups such as women or different ethnicities in your organisation. This provides you with an indication of whether you might have a problem. 

• The next step is to delve into where the gaps are – which department, which occupation, at what level in the organisation? There might be no gap in one area and a significant gap in another.

• Follow that up with checking whether your policies and practices might be contributing to your gaps. Auditing your policies for their impact on disadvantaged groups (e.g women, people of different ethnic groups etc.) is a good starting point for identifying where action might be needed to address inequities. There could be a problem within any or all of your HR policies and practices which could be contributing to pay inequities. 

Ask yourselves:

Remuneration

Are the pay levels for roles related to the actual level of responsibility and skill required in the role?

If your pay decisions are based on what the market pays for similarly titled roles, you are likely to embed existing pay inequities.

Recruitment

Are you looking for candidates in the right channels and in the right way?

• Do your job ads attract people regardless of gender, ethnicity, age, disability?

• Do they encourage women to apply across a broader range of occupations?

• Do they encourage younger candidates to apply? 

If your recruitment processes are discouraging people, especially women and ethnic minorities, from applying, you are not only restricting candidates from entering a broader range of occupations and levels of roles, but also restricting your own candidate pool.

Development

Do your promotion processes enable employees, regardless of part-time or full-time status, gender, ethnicity, age, to apply for all relevant development opportunities?

• Do they encourage people into a broader range of occupations, and to put themselves forward for development and promotion?

If it is too difficult to take advantage of development opportunities, potential talent is being lost from your talent pool and succession planning.

Flexibility

Does your culture enable flexibility?

If your workplace is too rigid in terms of hours and location of work, you could be excluding people who could make a significant contribution to your organisation’s success but need flexibility in amount of time they can work, where they can work etc. There will be some occupations and workplaces that have limited flexibility with respect to work location and hours, but even in these situations there are often options for increasing flexibility.

Policy

Confirming that managers are complying with your policies is another good step to take – policy and practice can sometimes be worlds apart. 

Maintain momentum

To maintain momentum, you will need to allocate accountability to a senior person/people within the organisation for on-going analysis of the gap and root causes, and actions to address these, as well as reporting to your governance level on progress towards pay and employment equity. 

Throughout the process

Throughout the process, asking the disadvantaged groups what would help them contribute in the workplace will improve the chances that organisations will have an impact on equity in the workplace. To paraphrase other writers on diversity and inclusion - we won’t achieve equity by inviting the disadvantaged groups to the dance. We need to involve them in choosing the music. 

We will only achieve equality in the workplace when we achieve equality in society. However, organisations can contribute to this by focusing on addressing their own pay gaps, being aware of unconscious bias in their recruitment and promotion practices as well as broadening their approach to developing talent and career pathways. Being aware of how policy and practice are affecting disadvantaged groups in the workplace and potentially limiting their opportunities to contribute will not only improve their chances but also contribute to organisations’ success.

Lyn Brieseman is a principal consultant at Strategic Pay. The organisation has been helping companies set fair and competitive pay packages since 1994, analysing and collecting data on wages and salary in New Zealand.