When we discuss the gender pay gap and all the underlying causes, there is one group who seems to escape any blame or accountability and I do not understand why. This group are my fellow HR professionals. After all, who in an organization is responsible for proposing and releasing salary offers, formulating salary bands, assessing performance and pay and proposing pay rises? That is kind of HR’s job, right? Fair enough, in some SME’s HR is less sophisticated, but when we turn on the news and hear about the gender pay gap, they are not speaking about a small local business, they are talking about the largest, richest and most profitable organisations in the world. So, I ask a genuine question, what are the HR teams at these organisations doing? The good news is that with proper HR practices, the gender pay gap can be eliminated in just a few years.
Stop asking for a person’s previous salary
Lazy HR practices when it comes to making job offers are a key reason why the gender pay gap has persisted for so long. If we know women are paid say 20% less than men, well a job offer process that involves looking at the current salary and then adding 10% on top means that women can never catch up. It is that simple. More importantly, can anyone explain to me how a person’s current pay at a different organisation, with different processes, objectives, culture, revenue goals has any bearing on what they are worth to your organisation? It does not. Any HR professional still operating in this way, needs to be retrained and taught how to compile a job offer properly. This training should also be extended to all managers.
Assess talent properly
These lazy HR practices often exist because most organisations honestly do not have in place a proper talent assessment strategy. This applies to both internal and external talent assessment. Managers, leaders, and HR professionals in these firms have not been taught how to accurately assess a person’s capability level. By putting in place these essential HR practices and capabilities, it becomes incredibly easy for an organisation to assess how competent and therefore how valuable a contribution everyone can make. This should be an impartial scoring and ranking system based on factual evidence and processes not how a person “feels” about how an employee has done or will do.
Pay a salary equal to the level of capability
This then makes the salary proposal process very straightforward. If Employee A has been robustly and accurately assessed and is shown to have average levels of capability, then they should be offered an average salary at the relevant banding. So, if the banding is $80-100k, the person should be offered 90k. They still have some room to grow and develop, before they get to the top of the band and the next promotion. If the person is newly promoted to the level of role, and has say 25% of the required capability and performance history, then they would receive circa $80-85k. If they were assessed to be one of the best employees for capability and performance, then they should be closer to $95-100k.
Finally, it is important to do the right thing and to be fair. If you have assessed a person and they should be at $95k, then you offer them $95k. It does not matter if the person is currently on $70k and has said they will accept $80k. Pay them what they are worth. If businesses implement these basic HR principles, which should have been in place anyway, then the gender pay gap can be erased within the next 5 or so years. Attrition is typically 20%, which means an organisation is refreshed on average every 5 years, so this is not an unrealistic expectation. The only reason this could not work, is if HR do not stand up and take accountability and continue to pass the buck to others.