Lenna Turner & David Turetsky – SHRM 2022 Series: The Plunkett Pay Equity Framework

Connect with Lenna:

• 

Connect with Dwight:

• 
• dwight.brown@salary.com

Connect with David:

• 
• 
• david.turetsky@salary.com

 

Podcast Manager, Karissa Harris:

• HRDataLabs@salary.com

 

Production by Affogato Media

Resources:

• Compensation Consulting Services
• The Plunkett Pay Equity Framework
• HR Data Labs Season 4 Episode 13
• HR Data Labs Season 4 Episode 11

• “The first and critical step [to pay equity]. . . is working with your senior leaders and the board of directors to make sure that it is mandated by them, and it's therefore important.”
• “This method . . . sets you up to, first of all, get that mandate because now you have a process that you can translate into an action plan that your CEO and your board can actually support and approve and fund.”

Announcer: 0:02

Here's an experiment for you. Take passionate experts in human resource technology, invite cross industry experts from inside and outside HR, mix in what's happening and people analytics to give them the technology to connect, hit record for their discussions into a beaker. Mix thoroughly. And voila, you get the HR Data Labs podcast, where we explore the impact of data and analytics to your business. We make it passionate, and even that count on each episode challenging and enhancing your understanding of the way people data can be used to solve real world problems. Now, here's your host, David Turetsky.

 

David Turetsky: 0:46

So today, we're talking about pay equity, we're talking about how is it possible to achieve it. Many of us have tried in organizations to start the process and we fail. Or we may start a process to do some investigation because there's a problem we found. And we go through, and we do it for that one time. And then we may revisit it again some other time. That's not pay equity. We're going to talk about what that is in a minute. What I wanted to do before we start, and this is where we're going to start with audience participation is how many of you have ever either as a child or as an adult, been identified as being different? Come on, we've all been bullied. And again, you're not being recorded. So don't worry, no one's ever gonna identify your hand. My kids, one of them is autistic, one of them has got ADHD, and one of them is pan sexual. And so they're always identified as different. It's gotta be me can't be anybody else. I have two ex wives. So one of the things that's strange is, they're picked on for being different. That's okay in school. It's not okay. Not okay. But when they get out into the workforce, is it okay for them to be treated differently? No. But we are! What we're going to talk about is making sure that does not happen in your organizations, to your family, to your kids, how can we make sure that does not happen. And so what we're going to do today is we're going to go through a way of transforming your organization by using this process, to start making sure that your managers your organization, thinks differently around how you hire, how you promote how you transfer, how you pay, to treat people differently. So I am joined by my esteemed colleague, the director of diversity, equity, inclusion for Salary.com Lenna Turner.

 

Lenna Turner: 3:08

As David has said, we're not here to sell anything, we're here to give some thought leadership into how we look at pay equity Salary.com. And we want you to sit back and sort of just soak it all in. I know you have quarterback fatigue from everything you've been doing with COVID and everything. So this is our gift to you. And we hope that you can take something away from it and just find yourself in a good place for your journey on the pay equity journey. So.

 

David Turetsky: 3:35

It is a journey. And what we're gonna do is throughout this hour, we're going to talk to a lot, but it's not like we're lecturing to you. We may get passionate you might seem you might think, well, they're being a little preachy.

 

Lenna Turner: 3:47

Yes. Because some of this stuff you'll know! It's not like it's brand new. But it's a new perspective on it we think so.

 

David Turetsky: 3:54

We're going to talk like this. So we're gonna go back and forth. So it's gonna feel like at some times, we're a tennis match. Because we're good team. We finish each other's sentences. Yeah. It's yeah, I set, I set Lenna up for that one. Sorry. Sorry. Sorry.

 

Lenna Turner: 4:12

I'm just the DEI Director, I don't know.

 

David Turetsky: 4:14

No, no, no. Lenna is a brilliant consultant that I'm very happy to have worked with. And I will continue working with hopefully, if I don't get fired for this presentation. So one of the things you should be thinking about is why is this important today? And it kind of sounds like a really stupid question. Is there ever a bad time to talk about this? And the answer is no. There is so much going on in the world. 2022 has seemed like it it's flown by and how many people think it's been just crazy that it's already June and we're at SHRM. Crazy. I thought it was just December but it's flown by, because all the crap we had to deal with in the past two years, has kind of made us tense, every moment from 2020 and 2021. What's gonna happen with the virus, the virus? What's going to happen? Where's the next war gonna break out? What's happening in our social issues in the political spectrum? So there's so much tension going on in organizations. And you know, it's not like we're having trouble hiring people or people leaving, right? So there's so much tension, that the last thing we should want is someone feeling like HR is not supporting them from a pay equity perspective. We're going to talk about why in a little bit. But here are the three things that we think of when talking about why now, the first thing is, it's the right thing to do. And for those of you don't believe it, you should not be sitting here. It's okay, I won't feel bad. Neither of us don't feel bad. If you leave now. It's okay. And don't feel peer pressure, it's okay to leave. It's just the right thing to do. I've been in compensation for over 30 years. We should have been doing this 30 years ago. But there are a couple of reasons why we didn't we're going to talk about them a little later. One of the reason is because there's now so much awareness in society and employees about how people are paid. Why? Anybody have an answer?

 

There's another reason why: 6:46

pay equity legislation. States are now adopting legislation that forces you to now put hiring rates a range, of course, but put hiring rates inside of their requisitions inside of their their listings, their job postings, right? Can you tell your current staff not to look at them? What happens when one of your current staff looks at those listings? And they go, but I'm not paid that. They get pissed, let's just be talk turkey here. They get mad. And they go, so when are you going to do that for me? Do I have to leave? Of course, we don't want them to leave, especially if they're a good performer. But what are we going to do? If we don't... sorry? Pay him more! Right? That's always the answer. And it's always more, but there's another thing you could do. You can educate them. You can tell them, this is what we're doing. This is our process. This is our philosophy in how we do what we do. Some of us call it a pay transparency philosophy. And that's part of what we're going to be talking about today. So one of the great questions is, so why haven't we done it already? We've talked about this, it's really hard. It's not just compensation, or the head of HR's responsibility. It's every single person, not just in HR, but in the entire company, to be able to live and deal with pay equity. Why? Because a hiring manager that's in a plant that is 500 miles away from you needs to believe it's the right thing to do. When they're struggling to make margin, when they're struggling with employee absence, when they're struggling hiring the right people. Do you think they care about it now? It's our job to make sure they understand it's best for the business, and it's best for them to believe in this. What has it been? I have to do this. Because I'm forced to do it. The government makes me do it. And in the past, this is what pay equity has been. Has anybody ever done a pay equity audit in their company? Exactly. Why did you do it? You can just shout it out. Right? Well, I love these people right thing to do.Help. Can you spread that virus to everyone? No. But it has mostly been because it's compliance based. Right, right? Right. Right? Non-transparent, I can keep compensation in a box. And I don't need to tell anybody. How many people have worked for companies or work today for companies who do not publish their ranges. I worked for a company back in the 90s who said I will fire people who talk about their pay. Okay, but back in the 90s at the investment bank that I worked at, that wasn't illegal, especially because you never talked about it until now.

 

Audience Member: 10:03

We made people sign a piece of paper when they hired on saying they would not discuss it.

 

David Turetsky: 10:09

So we make people sign a piece of paper that says they will not talk about it. Do you think that will be upheld in court today? No. But we do it, why we want to scare the pants off of people to keep it quiet. Non-transparent, is the opposite of pay equity. Non-transparent is keeping it so we can pay different people differently and not have to worry about it in HR at least. Pay equity has been confusing. What law do I have to follow? How many of you work in multiple, multiple jurisdictions? Most everybody I imagine, right? So which laws do you follow? What's the answer? All of them! And you all have degrees and each one of them right? You're all lawyers, right? How many lawyers we have here. I promise, we're not gonna gang up on you. We have one lawyer, so we're all gonna go to jail. Let's gang up on her. I'm kidding. I'm kidding. We're not gonna gang up on you. But I'm gonna come talk to you later. But lawyers are the ones who should know what's not confusing about it. And they're the ones who we typically go to we're going to talk about this later, to understand how to navigate this. Remember, they used to call this thing privilege that we used to share with our legal counsel, when especially when we're talking about pay equity. There are some jurisdictions where that does not apply anymore. That's new news. You can't just mark something proprietary and confidential or lawyer client confidentiality, and have it stick, it doesn't work anymore. Again, you talk to the lawyer about that. That's another thing to mention. While we're on camera, we are not providing legal advice. We are talking about our opinions here. There was actually a David Turetsky who worked for ADP when I worked at ADP, and he was the senior labor lawyer. So I always used to get the juiciest emails and have to forward it to him. Yeah, that wasn't fun. Too expensive. I can't afford to do this. I used to hear this from CHROs. I cannot afford to pay equity or pay equitably, I just can't afford to get everybody to the right place. That is a BS argument. But unfortunately, it's one we have to use. If we start and we do this, and we budget appropriately, over time we can get there. We don't have to do it all at once. We have to show that we're making progress. This is one of the ones that we're gonna start talking about much more so because it's one of our steps. This is not a focus or a priority for leadership. How many CHROs are here here? Do you have a hard time trying to convince your leaders of other things that HR wants to do that say it's a business priority? Yeah. We're HR! Why would they listen to us? Unless it's something really big and hairy. This is, and there's no bad time to start it. This is the time. One of the really cool things we just heard recently is that the US Soccer Federation. And this by the way, this deserves a round of applause. Don't do it yet. Hold on, hold on. Hold on, did you hear what happened? So they have to separate yet equal contracts, which should be scary in and of itself, but that share prize winnings and make their pay equivalent, that we can give a round of applause to. However, I applaud them for this. However, if you go to the US Soccer Federation site, even today, I think I haven't checked today. I could be wrong today. They used to have the same time they're heralding this historic achievement they have on their site and FAQ as to why they don't have a pay equity problem. Still, that may be a misstep. It may be an oversight. But you can't tell the public we don't have a problem when you're just heralding a really cool, historic, innovative deal between paying men and women the same thing. It's baloney. I was going to use a different word. I chose not to. HR audience. Do you know what I mean? You're giving the wrong message. You shouldn't be saying yeah, we screwed up or just take it down completely. Because if you still have that there, it's still there. Thank you for checking. It's horse crap! Why? What message are you sending to your fans, especially the young kids, the females who are looking up to you now, that is really cool. They play soccer, they want to play professionally. And they go to your website, and they click around there. They say they don't have a problem. It's not what they said today. So if you're gonna do this, make sure that you're in alignment on the communication of this, from stem to stern, everything. Because if you go ahead and do what they're doing, which is brilliant, it's wonderful. But they made a mistake. And it's a simple mistake to correct, just take it off. But it's still a mistake.

 

Announcer: 15:46

Like what you hear so far? This podcast is made possible by Salary.com. Now, back to the show.

 

David Turetsky: 15:57

So what is pay equity? We believe in a very simple definition, that it's the equal pay for comparable jobs. It's internally equitable, as well as externally competitive and transparency turn transparently communicated easy for you to say? Simple, we're not trying to boil the ocean. Well, I guess we are trying to boil the ocean in one sentence. But we went over this a lot. We talked about this a lot. And what we're going to do now is we're going to break this down, we're going to talk through it. And so here's the six steps, we're not going to go through them now. We're just telling you what they are.

 

Lenna Turner: 16:43

But we will break them down one by one. So as you can see on the screen the six steps, we start with the first one, which is mandate pay equity. And then we move through to update continuously. I'll first start by talking about mandating pay equity. David talked a lot about how hard it is to get things through. And you know, the people in this room from working on any program in HR, whether it's pay equity, or if it's a whole new job evaluation system, it's really, really important and key to get that senior leadership buy in. And that probably is one of our biggest challenges. So the first and critical step and you're hear me say the word critical. A lot of times I'm not crying wolf, it's critical every time. This is a critical step to get that mandate from senior leadership, working with your senior leaders and the board of directors to make sure that it is mandated by them. And It's therefore important, it sends a clear and concise message to your employees, to your stakeholders that you have a serious concern, and you are in support of pay equity for your organization. So you might say, Well, how do you get that? Well, you have allies on the business side, in my past life, what I've done is find that one golden haired child who has the ear of the CEO, sort of socialize the problem or the issue with them, then you have an ally and that leads to the whole conversation and getting the mandate set. And once you can do that, you're in a position to start looking at what you're now as we're calling up pay philosophy, pay equity philosophy will start to look like. In the past, you probably had a pay general pay philosophy, we are advocating that you develop a pay equity philosophy that's a bit more comprehensive, that includes that internal equity, external competitiveness, and then that transparent communication that we're talking about. So, once you have that mandate, because you socialized it, and you have some allies and you have the CEO's ear, now you can start to really think about developing a pay equity philosophy. So, what is that? Something that clearly states to everybody, that your board and your senior leadership is on board with pay equity, and they have mandated it. It also says in in adopting a pay equity philosophy, that you will work continuously, that your senior leadership will work continuously to sort of balance that external competitiveness with your internal equity. So, now that you have a mandate, you have an idea of what pay philosophy should be and pay equity philosophy should be, you are ready to sort of move to the next step, which is actually doing the work. And that is Jennifer Howard, who is our friend and somebody who we have the opportunity and the pleasure of talking with she is an advocate for pay equity. So we had the opportunity to sit down talk to Jennifer and get her perspective on what a man what it means to get a paid equity mandate. So let's listen to what she had to say about it.

 

David Turetsky: 20:02

By the way, we're going to hear her several times through the presentation. Right? This is our first one.

 

Jennifer Howard: 20:06

Getting leadership buy in is multifaceted. Through my HR experience, I've seen the full spectrum of pay equity from being an HR blackbox activity, where it's secret and forced out and sometimes uncomfortable, all the way to the other end of the spectrum, where it's a very public company priority with strong leadership and board support. With our growing legal climate, and pay equity moving to be a common topic in our media and press, it can no longer be an HR only initiative. Sometimes you have to start with a stick, pushing it purely from a compliance standpoint, while also taking advantage of every opportunity to push the carrot. Why is it the right thing to do? And how can it positively affect the company as a whole? Persistence and perseverance are key because you will not be able to implement equitable pay practices without leadership support.

 

Lenna Turner: 21:08

What Jennifer said is just so key, and she really gets it. So hopefully, with the starting point here is to get that mandate for pay equity, and to build those allies to help you get there. Because as we know, it's kind of hard to get the ear of the CEO, but they often listen to those business leaders who can really help you on your journey. So once you have that pay equity mandate set, and you consider it a pay equity philosophy, that's different from just your pay philosophy, where you really align yourself to the external market. This is really marrying up external, internal and pay transparency from a more comprehensive sort of view of pay equity. So then you're ready to start the work. This is where the rubber starts to meet the road. And you really start to work to gather up all that information to determine grouping of comparable jobs. And what do we mean by that? Comparable jobs are considered to be those jobs that no matter where they sit in the organization, they may be performing the similar work, similar skill sets, knowledge and values similarly, across the organization. So when you start this work, you need to look across the organization not just vertically, but horizontally and determine those jobs that look similar. And a litmus test is sort of like if you can explain it to a group of employees the differences in them, then they're probably similar. So this is a key and critical step. Again, I say critical, told you I would, so but this is really, really an it's just a little bit that we'll unpack today. David is a data guy. So he probably can't say enough about how important this particular step is. Because underneath this group of comparable jobs, you have to collect and validate all the data that you're going to need to even just start the process. And this is looking at all the demographic data, all of the compensation data, all of the other pertinent data, like performance reviews, things like that, that you have to actually group together the job descriptions key and important here. I can't say enough about job descriptions. My old life was filled with job evaluation models and things like that. But what you really have to start with are the things to the right here. That's like the benchmark data that you have to have to get to a point where you can even start to group comparable jobs.

 

David Turetsky: 23:36

And let's be honest, how many people in this room have perfect employee demographic data? Raise your hand. Excellent, thank you. So this lady over here will come up now and tell us how she achieved. I'm kidding. I'm kidding. That's great. That's great. Well, it starts with amazing leadership and culture. But one of the things we cannot rely on is that your employee demographic data is going to be perfect. And whenever you start, and I know a lot of you who have done analyses in the past where you've looked and you go, that doesn't look right. I know we have more people than that. I know we have more people in that group than that. And if you're starting a process where you're going to take a critical review of your compensation data, and your employee demographic data may be good, but not perfect. But let's be honest, it can't be perfect. But it's got to pass a test. And that test is that if you provided it for in front of your managers, that the managers don't say, Who the heck are these people? And why do you still have them in my org? Has anybody ever faced that? I used to go in front of the CFO all the time, and they'd say, your headcount is wrong. What's wrong with the HR data? Why isn't it right?

 

Lenna Turner: 24:52

Titles are incorrect?

 

David Turetsky: 24:54

Titles are right. So beyond the employee demographics. The other thing I want to talk about is job descriptions. You guys all update your job descriptions constantly, right? You guys have people on staff whose responsibility it is to make the job descriptions correct, right? I know I'm being facetious. But at the end of the day, when we start a pay equity process, we have to have the appropriate job documentation. Because as Lena said, now we're talking about why are jobs similar? And why are they different? And believe me, that plaintiff's attorney that may sue you, and yes, I'm bringing up the S word, sue you for not paying that person or that group of people, if it's class, appropriately they're going to start with your employee demographic data and your job descriptions and pick everything apart. That's not comfortable when the CEO comes down and says, Why isn't this stuff up to speed? Why isn't it accurate? There's no good answer.

 

Lenna Turner: 25:55

And while this may take a while, I always say it's worth the time to take the step back. We're working with a couple of clients right now on a pay equity study. And we got to the job description data, and it was a little bit here and there. So we took some time to really look through the job descriptions, align the jobs, align the title, opportunity to consolidate, so that when we get past that phase, everybody feels good about the data that they're going to be using to make the analysis on. So while you might think, Oh, my God, this is painful. And you might say we've taken five steps back, it's worth it. The due diligence to work through that job documentation is totally worth it, because it is the foundation that you're going to be using to do the analysis. So I can't say enough about it, it's a small bit that we unpack.

 

David Turetsky: 26:44

We could actually spend the entire time just on that.

 

Lenna Turner: 26:46

Talking about data that you need for this particular part of it. So this is the accepted standard for

 

equal pay: 26:55

equal pay for comparable or substantially similar work. And that's what you're trying to do in this step is just get those jobs together to meet this accepted standard. Because you can't move forward in the pay equity analysis process until you get here.

 

David Turetsky: 27:10

Because you might actually do analysis inside of a job. And that might seem like it's enough, but it's not, because there are jobs that will be substantially similar. And you must make sure that those substantially similar jobs are paid fairly paid similarly, and unless you are able to show why, why are they not, what is different about them, that would lead you to pay them differently.

 

Lenna Turner: 27:38

And if you find yourself scrambling for reasons, taking an hour or two to explain it, it's probably not different.

 

David Turetsky: 27:48

So what this is, is taking a look at those jobs, and looking at jobs that may be substantially similar. They may be in completely different job families. They don't have to be in the same job family. In fact, they're probably not in the same job family. But they're probably jobs that have similar impact, or they will have similar impact to the organization.

 

Lenna Turner: 28:12

Yeah, and another one that's probably very common to you might be an analyst. You might work there as a corporate analyst, and as business analyst, then there's some sort of product analyst over here. And then by the time you get an analyst job description, you have five of them, do you really have five, it's an excellent opportunities. But you have to get that mandate, then you have to talk to those senior leaders and help them I understand what you're doing is consolidating and looking across the organization for the purpose of grouping comparable jobs. And that's just an illustration. So, yeah.

 

David Turetsky: 28:51

So one of the fun things that I get to do as a statistical analyst is I love looking at data. And so I take that data that now has that new fresh coat of paint. We now have new job descriptions, we have an appreciation for the holes in the data. So we know what we do have and what we don't have, now we have to go to the step that's modeling pay. A lot of times you used to hear the words regression, how many of you took statistics classes in college or in high school? How many of you loved that statistics class? Yes, fellow geeks, thanks. Unite, unite. So I was that moron at the front of the class that used to answer every question in statistics class. I'm self identifying. I'm okay. I don't, I don't care if I'm different. Because I loved it. I love trying to describe populations by looking at samples. And regression analysis gave me the opportunity to say there was a correlation here, meaning that there was something about the data that I was looking at that explained what I was looking at, when we're talking about that in terms of pay equity. We're looking at these things on the left hand side, sorry, the right hand side, my left your right. What's fascinating about this is it is a Rubik's cube. So even if you solve for one, you may not solve for all. Does it plaintiff's attorney care? No, you have to solve for every one of them! Why? Because someone's going to be pissed. Someone's going to call their lawyer, and someone's going to sue. Again, not legal advice. But why this is important is because there is no right answer a lot of times. Sometimes this is so complex, there will be correlations with one and not another. And here's the problem. If you fix one, what happens? You may create another one, right? There is no good answer other than I've checked, I'm working on it. And we're making corrections. That's a good answer. I'm trying I'm doing the best I can. Here are the models are used. There was actually a very famous case just recently, where models were scrutinized, because the company who was being scrutinized said there was no statistical pay difference. And it went to court. And the court found there was statistical pay difference. So you can do your best and still get sued. That shouldn't stop you, though. Because you don't want to get sued. But these are things on the right hand side, that are what we use to check. Are there some things that seems strange to you? Tenure. As an over 55 person who had been with a company for a very long time, I will tell you that it is a definite thing that happens, where you get let go after being there for a long time. And there are people who sue on that basis. I promise you. Not me, I didn't sue. Just so we're clear. Education. Is an education, because education is a reason why you'd pay differently. It's not usually something that you check. It's okay. In fact, most states have education is one of the reasons why you can pay differently experience, education, tenure is not. Tenure is not. Again, not legal advice, please check with your general counsel. All right. It's my out on everything. I'm not a lawyer, but it's true. Mostly. When you run the multivariate regression, again, this is not a screenshot of anything, this is just something that the marketing people thought were really cool. And it's beautiful, by the way. But what this is saying is, is that there are correlations, and we use that thing called r squared, they may remember that probably bringing back flashbacks, bad ones, right? But what this is saying is there's a 75%, let's be honest, it's just I'm just being dramatic here. 75% chance that there is a correlation here. Yes, it's not exactly what this is saying. But this is the way of explaining it. And the p value means if it's a smaller P value, it means that there is less noise. And this is probably true. Right? So what this is saying is there is a correlation here between gender and pay to explain the pay gap. Again, this is just an illustration. It's not real data. It's demo, it's made up. But when you run multivariate regression, what you're trying to do is find those correlations between those things that we looked at here, and pay. That's what we're trying to do. And this is the standard that's used for making sure that we do not have substantial pay gaps that are statistically relevant or significant. Okay. Yes?

 

Audience Member: 33:50

Are you saying that this new initiative, does that undermine the pay ban? Because it seemed as though as far as the parameters that that you broke out as acceptable exceptions? You mentioned performance, and then you mentioned education.

 

David Turetsky: 34:10

Okay. But what she's asking is, is there anything net new here? And the answer is no. State law and federal law dictate what are acceptable for standards for why we pay people differently. A lot of time it has to do with education, experience, performance. It has been in the past, those things are actually being whittled down and whittled away, new legislation comes up and says, maybe performance isn't so much, but they each state has a different standard. So check with your state standards, but there's nothing new in our framework that's calling out anything different. What we're saying is, is that you have to run these regression analyses to make sure that based on the list on the right hand side, right hand side, that you're looking for gaps in these types of situations. Again, we're not breaking new ground here, what we're trying to do is set up a framework for you to walk through step by step to take those actions in order to be able to get to what should be, as Lenna and I were talking about, not just pay equity, but a pay equity philosophy. Take out your pay philosophy and install a pay equity philosophy that says, here's why and how we pay people. And we're going to check it by doing this regression analysis against it least these factors.

 

Audience Member: 35:35

Maybe I'm not clear, because I'm totally not getting this. Our pay practice is if you're competent in a job then we want you at the midpoint of our pay grade in five years time. So we have to pay the first year person the same as the second year person?

 

David Turetsky: 35:50

No, no, no, no, no. Okay. So now we're talking about pay bands. So let's be clear. Pay grades are set up to provide structure cost structure for how you pay, okay? For those of us who have created pay structures again, and again, and again, it's all meant to say, here's the market for jobs at your level, here's what we'd like to start you at usually around the minimum, sometimes between the minimum and the

 

Lenna Turner: 36:19

And left to explain it or understand it? midpoint. And then as you get on in your career, you go through and get increases in a band. As you go on in that band, we start paying you more than the midpoint and the midpoint is typically the median of the market, the competitive market, right? We develop structures by taking the midpoint and developing that based on the median of the different jobs, the median pay market pay for all the jobs inside of that grade. That's a completely separate thing. That actually gets to and it's a good point, I'm glad you brought it up, that gets to how we set our philosophies around pay for starting rates, as well as for people inside of the bands. Okay? The groupings of people in those bands might be in a cohort that you're going to want to look at. As far as those pay gaps. Because they're inside the same grade. That means what? They're at the same level. They're exactly, they're doing substantially similar work. So you can start at grade. But what Lenna and I said before, you need to make sure that your job descriptions are up to date. And you may need to do new job evaluation to make sure that they are actually at the same level. How many of you in the audience have inherited jobs structures, pay structures, grading from other people?

 

David Turetsky: 37:57

Yes, I've had a client last week tell me that they had no idea why they had grades one through 24. And they were only odd. I mean, sorry, oh, one through 25. Only odd grades. So it went 1, 3, 5, 7, 9. Why did that happening? Anybody know? At some point, they had major overlap between grades four and five. And they said, hey, look, there's so much overlap. Let's just get rid of all the even numbers. Yeah.

 

Audience Member: 38:31

I think it's a really good conversation that we're talking about, actually, though, because I think being aware that paid bands are a way that potentially can mask pay equity is really important. Question isn't about saying you're within a range. So it's fair, because this is the established range. But within that, are people within that range getting paid the same?

 

David Turetsky: 38:50

It's a wonderful comment. So what she said was that just because you're in a band, don't just look at the ones in the band and say, Are you being paid fairly in the band? Right? You have to actually that's what we're talking about, you actually have to go back to making sure the people and the jobs that are in the band, that they belong together in those bands, the band setup themselves should come under review. The structure itself should be under review. Don't take it on fact, because you've inherited these things. And you may have increased them four times over the years. That's okay. Glad you did that. But you may need to go back to the beginning. Was there another question?

 

Lenna Turner: 39:29

See, that's, oh. I'll let you go.

 

David Turetsky: 39:35

Sorry, Lenna. The question was remote work status. That was very interesting.

 

Lenna Turner: 39:39

Before we leave this piece here, can I just add that when I said we might have to take a step back and we could unpack a lot about in the previous step around data collection, considerations for your structure and your job evaluation system are key, everything that David is talking about all the questions, those are things that inform that part of the analysis and all that data gathering. So it's very, I critical, I'm telling you. It's critical.

 

David Turetsky: 40:06

Great point, Lenna. So the person asked remote work status. Has everybody created a pay equity? Or sorry, if pay philosophy for remote work? I don't see any hands. Okay, you're what? We don't change it. That's a philosophy. We don't change it. And right now, that's what a lot of companies are doing. But as things go on, managers are going to say, and one just famously said that the other week, you must come back to the office or you do not work here anymore. And you must come back for for if there's somebody from that company, I apologize. You are, I'm sorry. Oh, you're not? Yes. Right. Right, so the difference between remote work, or telework, and remote work, where telework, you can actually go to the office and remote work, there is potential for us changing their pay, based on the fact that they moved from New York City to Tuscaloosa. Because it's a lower cost area, right? Should we still pay them New York rates, even though they're living in Tuscaloosa, and I will tell you for right now, don't change thing. Because the moment you set precedence, it's going to cascade the organization. Think it through carefully. That's why we're talking about creating a pay philosophy on this. One more, and then we have to keep moving on?

 

Lenna Turner: 41:43

Well, actually, good question. If you have a So now we're going to move two steps ahead. And we're going to strategy or if you're thinking about building a DEI strategy, how can you think about it without having pay equity is almost a cornerstone of that strategy. So while you're thinking through this, if you are in the middle of a diversity, equity, inclusion journey, this is a key part of it. So you can get the numbers in, like David said, no one wants to be treated different, you can do the diversity part, get the people in there. But it's the inclusion and the equity part equitable part that really keeps them there. So excellent question, please make sure that you consider this a key and cornerstone of your DEI strategy. hear from Jennifer.

 

Jennifer Howard: 42:38

As you begin to consider what a program budget may look like. It is very important to keep in mind that an equitable pay is no longer just about base pay, but also annual bonus, and any other discretionary compensation plans that your company may leverage, do the work to understand what your gaps are that you need to close. Also consider the cost of external analysis and legal support, plus tools that will help you manage pay equity on an ongoing basis. This will be a journey that could take several years and require a phased approach.

 

David Turetsky: 43:15

So she mentioned three things I want to highlight there. One is she talked about setting a budget. Not then second thing is not just a budget for making pay changes. She talked about using tools, getting legal counsel help and other things. The other thing she talked about is this is a multi year approach. This is not one and done is a constant thing that you're going to have to do year in and year out. You cannot think it will actually happen one year and we're solved. Because there's turnover. There's turnover in HR, there's turnover in executives, there's turnover management, there's turnover in employees. The next hire, I think we're going to talk about this right, Lenna. The next hire is another opportunity to not pay fairly. So we talked about modeling and remediating your legal counsel, will it be your best friend, they're going to talk you through what steps are critical for your organization. I'm not a lawyer, you're not a lawyer except for her. Right? So you can't possibly do this without having full legal buy in and support. You cannot possibly do this without the General Counsel's Office. And if there's anybody you should talk to when you leave here, when you're done with SHRM and you want to start a pay equity process, start talking to your legal counsel. You may not have someone in house who has enough understanding, you might have to call one of the premium law firms in the US who can help you through it. They will navigate the multi jurisdictional issues. They will navigate all the issues that you might have, even if you're outside the US. And you have locations in the US. If you have one location, if you have 50. If you're in one state, one city, or you're in many, they will help you do that. And then the next, sorry.

 

Lenna Turner: 45:14

You're probably saying, Well, where do I get that money from? If I don't have in house counsel? Well, we already got a mandate. Remember, that's the first step, getting a mandate means you have the resources as well. So that's the reason I say that's the first and critical step of mandate with resources budget. Now we have to move on.

 

David Turetsky: 45:34

No, it wasn't saying. So we only have 14 minutes left. So if you have questions afterwards, please come talk to us, we're going to kind of power through because we're only at step three. And the one thing to talk about the remediation plan, it's a plan. Remediation means we understand our holes, we understand our problems, and we're going to make a plan to fix them. You can't do this on your own. Again, you're going to need a legal counsel, you may actually have to have someone on your team be the project leader for this. It may not necessarily be your comp person. In fact, it probably won't be. There'll be somebody on your team who has the DEI background, or at least has the drive to want to help you with it. And they have to understand that there's a project over time. Oh, sorry. The next step is benchmarking external competitiveness. How many of you participate in external salary surveys? It should be everybody. Well, though, you may have comp people who would raise their hand if they were if they were here, right? We use salary surveys to understand how pay has moved. It's either it happens every year, or we have more recent data. And we can follow along what's actually happening in those markets for our scarce resources. And this is one of the critical things here. One of our steps is you need to not only understand what's happening inside, but what's happening outside, because it doesn't stay still. For those of us who can go back in our time machines to 2019, when we weren't fighting for Amazon, for our staff in our locales, right. If we had a crystal ball, and we said, hey, maybe we should increase our pay. No, we're fine! We don't have anybody who's trying to get our staff, especially our entry level staff. I have had comment after comment from my clients about how there are new entrants in their space, whether you're store that sells food, whether you're a warehouse, whether you're a manufacturer, there are so many new people coming in and stealing your new people. And it's not just about pay, they're offering crazy benefits too. You need to understand what is being offered and stay on top of it. It helps you understand why people might be leaving today. Because if you start offering those people crazy new packages, you have to do something about that internally. So we have to keep a look at what's happening in the marketplace. We have to evaluate how that impacts current people who are who they've been there for years.

 

Lenna Turner: 48:10

Communicating transparently. Recent survey from Salary.com's pulse survey said that 49% of the employees who asked how their pay was determined did not get a satisfactory answer. That's almost half of the participants. Then 77% of the employee said their employer did not transparent was not transparent about how their people are paid in their organization. So chances are when people don't understand how they're paid, they might not feel like you as an organization are paying equally or you have motivation to pay equally. Why communicate transparently? Why is this a priority? Well, it's a huge, it can be a huge impact on culture, first of all, helping people understand how they get paid, what kinds of surveys you use, how pay is holistically determined. I'll tell you a short story, a great story. I was at an organization, big box organization had the opportunity to be the comp manager for the IT group. Well, we all know how special IT is right? This was really at a pivotal point for them. They had extremely high turnover. And they really, really just had a lot of issues going on. And they thought it was pay. So I was the lowly consultant, going up to chat with one of the VPs of IT about something. He didn't know much about what we did. So he looked at our data and said somebody this data is not right, somebody should get fired. So we looked at each other myself and the HR manager like Okay, so we took it upon ourselves to really bring him into the fold, educate him, have him understand the surveys we use, how we manage jobs, how we evaluate the jobs, and he became one of my biggest allies, because when I got to a meeting, he not only understood what we were doing, he could bring his colleagues along. So transparency will take you a long way and just sort of moving your program through. When I left that place. He actually came to my going away party and said he was going to miss me, he had scared the bejesus out of me, telling me, you know, somebody should be fired, heads should roll. But I tell you, we did that with each of the senior leaders there were VPS, across the divisions for IT. And we took it upon ourselves. It was a task force. But we were very transparent. And we did shows what I call shows, with the IT population we would talk to them about these are the surveys we use these is the competitors in those surveys. This is how we develop pay structures was a whole transparency thing that took us so far. And we became from that 20% turnover, one of the top 10 best best places to work for IT in the computer world. It didn't happen overnight, I was on a task force that I thought was six months that lasts for two years. But it was very, very, very helpful. And I cannot say enough about what transparency can do for engagement for your employees, and for your stakeholders, and then for your culture in general. So next slide.

 

David Turetsky: 51:00

Yeah, by the way, the problem is, is that you can't keep it secret anymore, especially in those locales, where it's now mandated, like we talked about.

 

Lenna Turner: 51:07

Right, let's not even get into the legislation that's raining down upon your head everywhere, and if it's not in your state, it's coming to you very soon. So transparency is very key, and critical. Communication plan components. If you we talked about Senior Counsel, I am a big advocate of having a strategic communication plan, along with any major initiative that you roll out, if you don't have communications people at your company, and you say, Well, I'm the communications person, remember, you got a mandate, you can get a resource, get someone to really help you think through a strategic communication plan, communicate your compensation philosophy, communicate often, to your employees to your stakeholders, train your managers, employees might say, well, how will I train them, train them on what how, what and how of your compensation, your pay equity philosophy, and then they can have really great open and healthy conversations around pay and performance and career activity. So the last one is encourage good conversation between employees and their managers, because it's been a black box and off the table. But the really healthy movement in your organization will come when you are able to as an employee, talk to your manager about how my pay is developed, and how that looks for me, and how I can move through the organization.

 

David Turetsky: 52:27

And I want to highlight one thing on here. And You will keep more people turnover in their organization if that last bullet, remember, I talked before about working in an organization that said if you talk about pay, you're fired? Let's encourage it. Why is it discouraged? Because we fear it went to 10%. It was probably, the CO probably wanted little, because no one knows all the answers. We'll give them the answers. Give them the cheat sheets. Is anybody communicate a career framework for your employees? Did they know? Excellent! I'm sorry, we're gonna run out of time. I'm so sorry. We'll talk after, okay? I apologize. I hate to do it. But the one thing is that when you talk about career frameworks, what is my next role? Where can I go? When you re-develop those job descriptions at the bottom, say other roles are like, other roles you might be interested are and allow them to see that there's something else beyond your function. I promise you'll keep more people because they'll now know they have a path forward in your organization. maybe not that low turnover. But you know, it really, really helps keep people encouraged, motivated. Some turnover is good turnover.

 

Lenna Turner: 53:47

So you probably want to measure success by defining your goals. Why are you really doing this? Are you doing it because you want to increase employee engagement? Do you want to mitigate the possibility of litigation, things like that. Define what success looks like for you? Is it having more acceptance rates, and that don't have anything to do with pay or your pay is not a factor, identify the data needed to measure progress against your pay equity goals. And I know we're running through it a little fast. But

 

David Turetsky: 54:14

And this is critical. If you guys design your HR processes, measure them along the way and make adjustments as you go through and correct course correct when you're making mistakes, the best thing that could happen to you upfront is failure. So you learn from your mistakes, you re measure, you keep measuring, and you find out what you're gonna do. Some metrics you might want to consider, and by the way, these aren't real metrics, there's no war for talent metric. But what there might be is, as Lenna said, what's acceptable turnover rates? And what are the rates we've had historically, and look at it over many years, so you can see some seasonality, especially given the fact we've had such crazy seasonality recently. You might want to look at compensation targets and you might want to see how have they gone? Are we paying those incentives that we said we were going to pay? As Jennifer mentioned in the video, sometimes it's not just base pay that we pay people. And we need to make sure that as we're looking at total compensation, are we actually achieving total compensation. Because people might leave if the executives are getting bonuses, but the employees who are have a target for them are not getting them. And then employee engagement, a lot of you do employee engagement surveys, right? Let's make sure that now we ask some new questions about how they feel about belonging. And does the pay equity philosophies that are being now introduced, make them feel better about being in your organization. The last piece here is this is not a one time as we mentioned before, this is a every day thing. You have to update this continually. Because you will always have new hires, you're always going to have performance reviews, you're always going to have promotions, and you're always gonna have transfers, and you're always going to have the next thing that happens to an employee. And every time it happens, something can go wrong, horribly, horribly wrong. Now, we should be mitigating that because now everybody understands your new pay equity philosophy. Now, everybody understands the new rules. Now everybody understands how compensation works. Everybody has it, because we're now being transparent about it. So now they know what to expect. And the last one is terminations. Why? I'll tell you, because term reasons stink, go look in your action reason codes, if you know what that is. Why do we have the word resigned as one of your codes? I want to know why people leave. Make sure you have the right codes to collect why people leave! Because otherwise, I don't know why they left! It could have been for comp. It could have been because their spouse moved. It could have been because they hate their manager. Everybody loves their manager, right? Thank you, they love their manager probably sitting right next to you. So that's what we have to know. And if you keep updating them, we know how to change course, if we're not doing the right thing. Exactly. So there are lots of rewards for paying equitably.

 

Lenna Turner: 57:17

And I think the biggest one is that you become an employer ahead of the curve in this whole thing. This method that we've laid out today, the framework, I think it sets you up to, first of all get that mandate, because now you have a process that you can translate into an action plan that your CEO and your board can actually support and approve and fund. So you set up there to already be ahead of the curve just by looking at the six steps that we're talking about here today. But you can become a winner in the war for talent and your culture can improve significantly by utilizing several of the steps within the framework.

 

David Turetsky: 58:02

Thank you so much for your attention. We really appreciate it.

 

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