boss giving check to employee at work
Expert Scott Cawood suggests tangible ways that business owners can ensure that there are no disparities in employee wages. — Getty Images/fizkes

If you could create your own fantasy Board of Directors, who would be on it? CO— connects you with thought leaders from across the business spectrum and asks them to help solve your biggest business challenges. In this edition, a CO— reader who suspects pay inequity may be harming staff morale, engagement and productivity asks how to tackle the insidious problem.

Scott Cawood, president and CEO of WorldAtWork, a nonprofit professional association focused on workplace compensation, answers …

Tackling pay equity in the workplace does not need to open Pandora’s Box.

Solutions to correct pay inequity are within reach of all companies, regardless of size. Cawood said efforts to close pay gaps are building momentum on several fronts, making now a great time to join the movement.

Some 55% of U.S. companies – more than ever – will conduct internal pay equity analyses this year, reported PayScale at WorldatWork’s March symposium; 40 pay equity bills were introduced at the state level last year. Consider the record number of women in Congress and a mandate from millennials to confront pay inequity, and there’s hope for progress, even if gradual.

Pay gaps stretch even wider when ethnicity, age and parental status come into play. Projections on when the U.S. gender pay gap may close vary from an optimistic two decades from now to Glassdoor’s 2070.

No organization wants to have pay inequity issues. No leadership wants to believe the system they created resulted in inequity.

Scott Cawood, president and CEO, WorldatWork

You don’t need a cadre of consultants

Companies already have data to assess compensation fairness, Cawood said. Start by examining gender pay within a specific job title using a spreadsheet. Unexplained discrepancies in this role-to-role comparison merit further study of pay practices.

Next, look at pay patterns across the company to reveal disparities. Group-to-group pay inequity involves non-monetary factors, such as how a company hires, promotes and rewards employees. “Do you tend to hire more women in a certain role that happens to pay less? Do you happen to hire men for a different role and that role happens to pay more?” In the United States, men are 70% more likely than women to hold higher-paying executive titles, he said.

Scott Cawood, president and CEO of WorldAtWork

“Conversations around role-to-role and group-to-group [pay practices] might be our best shot at beating the Glassdoor predictions and closing these gaps much earlier,” Cawood said.

“No organization wants to have pay inequity issues. No leadership wants to believe the system they created resulted in inequity,” Cawood said. “It doesn’t feel good.” Starbucks and Salesforce are among those that tackled this issue successfully.

“Perceptions employees have about their own pay and the pay of others in their workplace play a significant role in how engaged they are in their work and the likelihood they will stay or leave the company,” Cawood said, adding that 82% of millennials are more engaged at workplaces with fair practices.

“Millennials approach the workplace with a pretty sophisticated ability to analyze what’s happening,” he said. “They have clear perspectives on what they want to see happen, and they are going to mandate that organizations respond in a different way than they have in the past. I think they will probably be the solution to pay equity. They are already the largest workforce in numbers, but their impact will continue for decades.”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Published April 17, 2019