Pay Equity: Beyond Compliance, The Salary Question

Pay Equity is a challenge that is not going to go away this year. Pressure to find a pay equity strategy will likely heat up in the US and we bet that it will move globally AND beyond ‘gender’ as a primary focus over the next few years.

On one hand, as shown in a recent discussion between CXR members keeping score, we are still at the beginning of [well-meaning] legislative solutions attempting to provide a compliance ‘floor’ that has yet to take root.

“So far only 1 city (NYC), 1 U.S. Territory (Puerto Rico), and 3 States (Delaware, Oregon, and California) have actually enacted salary history laws related to businesses (2 cities only apply the ban to civic jobs (New Orleans and Pittsburgh). San Francisco has passed a law but it doesn’t become effective July 1, 2018. 6 States have rejected similar measures. 10 States have had legislation pending for months but no progress toward passage and several of these measures appear to be permanently ‘tabled’. The U.S. Chamber of Commerce challenged one of these laws in the city of Philadelphia and obtained a court order to hold enforcement of the law pending judicial review.”

On the other hand, as another TA leader notes, Pay Equity is the

"…‘right thing’ to do and in-line with our diversity and inclusion practices and goals. In addition, there seems to be a real social movement on this topic in terms of articles on social media, blogs etc., etc. that are very much favoring the position of the candidate. Candidates, covered under a law or not, are becoming increasingly less interested/open in providing their current comp.  We especially see this with the passive female candidates we are sourcing. It's something to watch, whether it's legislated or not.”

[Gender Pay Equity: The fuse is lit, fireworks to commence]

What do candidates think about the salary question?

Legislative speed and anecdotal evidence aside, we doubt anyone is systematically measuring the most important factor in the discussion: the candidate's reactions to our asking their salary versus salary expectations versus simply stating our position's salary.

Our hypothesis is that if we did measure candidate reactions, attitudes and behaviors around salary questions asked and answered by both parties (and, btw, I expect we will get at it through the 2018 Candidate Experience Award survey) it will correlate with candidate perceptions of Fairness - a major component to how they perceive their job experience. Perceived Fairness can be shown as causative in determining candidate attitudes and behaviors that impact conversion, re-application and referral rates (and likely customer behavior as well).

No one has the evidence linking Pay Equity to all this yet, but I think we can get it by the end of the year. Then, whether States move in one direction or not, compliance simply won’t be the issue. Beyond compliance, the cost of ignoring candidate attitudes surrounding Pay Equity will translate into a compelling business necessity.

cXr Research on the salary question

In the last few weeks we asked a small group of large employers (90% with more than 10k employees in the US) the following two questions:

What best describes how your Recruiters/Hiring Managers manage the Salary History question when speaking with prospects/candidates in the US?

  • [5.0%] We really haven't gotten around to changing anything even in states where it is illegal and see ourselves in a grace period while we develop and deploy our response.
  • [25.0%] Recruiters/Hiring Managers have been instructed that they can ask the question if it's legal and not ask it if it's not legal. We've advised on alternatives such as "What are your Salary Expectations?"
  • [60.0%] Recruiters/Hiring Managers have been trained to switch to the question, "What are your salary/compensation expectations?" throughout the US at all levels.
  • [10.0%] Recruiters/Hiring Managers have been instructed to avoid asking ANY salary/compensation related question of a candidate for any position below Executive Level in the US.
  • [0.0%] We have not made a final decision yet but, will soon and are leaning to the choices above...don't ask any salary questions and implement globally.

While the sample is small ~25 companies, the employers are all industry leaders who have set priorities and are changing policy ahead of the train bearing down on them.

Nothing is perfect however and a few concerns were expressed including these three:

  • "Using current US states with legislation as a pilot to determine the impact of process changes. Our level of authorization for offer approvals are based on an increase, so there are broader changes to forms and tech that need to be considered. Also concerned the legislation as it's written may not help salary gaps if basing on candidate objectives if men ask."
  • "Executive stock info is the biggest sore point for us."
  • "If asked in California - we provide the common "preapproved" hiring salary range of the position that we are recruiting for.

The second question was an easier result to predict as seen below: If you are a firm with positions outside the US, is your approach consistent globally?

  • [10.5%] Yes, we've implemented the same practice globally
  • [15.8%] No, but we are going to.
  • [73.7%] No, we have not at this time considered asking recruiters/hiring managers to be consistent with our approach in the US.

Those saying 'yes', qualified their response this way, “We are implementing in some countries but not all. We are working on it but not yet a strategy to do it outside the US.”

Multi-national employers face significant challenges as they begin to consider what Pay Equity means globally, gender or not. To their credit, interest continues in discussing this particular issue in our private community forum and a conference call to anticipate best practices is scheduled for early February. While we don’t share those participating in the conversations taking place, we hope to share any useful conclusions publicly. Let us know if it’s of interest to your 2018 priorities.

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Gerry Crispin
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Gerry co-authored eight books on the evolution of staffing and has written 100s of articles and whitepapers on similar topics during a career in Human Resources that spans more than 40 years from HR leadership positions at Johnson and Johnson; to boutique Executive Search firms; a Career Services Director at the University where he received his Engineering and 2 advanced degrees in Organizational/Industrial Behavior; and, GM of a major recruitment advertising firm even as he launched CareerXroads 20 years ago.

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