Garry Straker – The Pay Equity Landscape

Connect withGary Straker:

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Connect with Dwight:

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• dwight.brown@salary.com

Connect with David:

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• david.turetsky@salary.com

Resources:

• World at Work
• Colonial Total Rewards Association
• CompAnalyst Compensation Software
• HR Data Labs Season 3 Episode 22
• HR Data Labs Season 3 Episode 20

• “I think pay equity, in terms of how we define, it has evolved and changed particularly in recent years and as a result of many different factors. But today when we talk about pay equity, we're really talking about a general sense of fairness in the workplace.”
• “For a lot of organizations, I think it's going to be incremental steps. There's a lot of housekeeping and analysis that needs to be done around pay equity . . . and the integrity of your data is just going to be critical.”

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 in people analytics today. Give them the technology to connect, hit record, pour 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 may get passionate and even irreverent, but 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

Hello, and welcome to the HR Data Labs podcast. I'm your host, David Turetsky. Like always, we try and find phenomenal people, guests from inside and outside of HR to give us the scoop as to what's happening in the worlds of HR data, analytics, HR technology trends. Today we have with us our friend and colleague, Gary Stryker, VP of Compensation Consulting from salary.com. Hey, Gary, how you doing?

 

Garry Straker  1:14

Hi, David. Nice to see you. Good afternoon, Dwight.

 

Dwight Brown  1:16

Hey, Gary, good to have you here.

 

Garry Straker  1:19

Nice to be here.

 

David Turetsky  1:20

And always we have our trusted friend and co host, the man who has the deep voice, Dwight Brown from salary.com. Dwight, how are you doing?

 

Dwight Brown  1:31

I am doing spectacular. It is a good day.

 

David Turetsky  1:36

Today, we have a very special topic. But first, I'd love it if Gary could you could give us a few minutes on who you are and what brought you to this moment.

 

Garry Straker  1:45

Great. Well, thanks so much for having me. I'm excited to be a part of your podcast here. So again, my name is Gary Striker. I'm a Vice President of Compensation Consulting at salary.com. And I'm someone who has been consulting in the area of total rewards for just about 25 years. And during that time, I've had a chance to work with clients really all over the country and different pay markets, helping them build market aligned internally, equitable, sustainable, total compensation plans that really help drive their their businesses forward and really loved that work. It's been a lot of fun in recently, in the last few months, it has never been more challenging given the dynamics of the current labor market. So never a dull moment, David.

 

David Turetsky  2:27

No, no, it's a lot of fun. And our topic today, which will kind of bring that out is been making it even more fun, but we'll get to that in a second. But the one fun thing that we do for each of our guests, is to put them on the spot and ask one thing that no one knows about you, Gary?

 

Garry Straker  2:47

Well, I'm not quite sure that no one knows about it, David, but very few people do. And that one thing is I actually have a background in theatrical production. And in my prior life, I worked as a stage manager and at one point had the the privilege and honor of working for the Royal Shakespeare company in Stratford upon Avon and London, England, taking productions of Shakespeare around the world. And that stems from the fact that I actually have an undergraduate degree in theatre production.

 

David Turetsky  3:18

Wow. I have a newfound respect for how dramatic you are.

 

Dwight Brown  3:26

Theatrics, theatrical training comes into play in the consulting

 

David Turetsky  3:30

Absolutely.

 

Garry Straker  3:31

Lot of transferable skills

 

David Turetsky  3:33

Absolutely keeping a straight face when clients say things. And I love my clients I really do. Today, we get to talk about a really key topic and one that has been in the fore for many years, but no more so than it is today. And that is pay equity and what's going on in the pay equity landscape. And we're living it and in fact, Gary Stryker is the embodiment of the compensation professional who's kind of really taking a lead on it, especially at salary.com. So, Gary, this is gonna be a fun one.

 

Garry Straker  4:10

Thank you.

 

David Turetsky  4:20

So Gary explained to us and explain to people who may not really even know what it is, I mean, they may understand it from their own, their own world and maybe even their own compensation. But tell us what is pay equity?

 

Garry Straker  4:35

You know, that's an interesting question, David, because I think pay equity in terms of how we define it has evolved and changed particularly in recent years and, you know, as a result of many different factors, but today, when we talk about pay equity, we're really talking about a general sense of fairness in the workplace. And, you know, historically pay equity, you know, going back to 1963 excuse for me when the Equal Pay Act was passed, you know, we thought about pay equity as equal pay for equal work. And I think most of us conceptually can get our arms around that and sort of understand what that means. But today's world is different. And the workplace has evolved, employee expectations have evolved. And when we talk about pay equity, nowadays, we're typically using that term pretty broadly. And so pay equity can mean everything from looking at and addressing the gender and or racial pay gaps that exist within the workplace. And, as you know, and that's what gets a lot of the media attention. That's the sort of the general average pay difference between different demographic groups will relative to white men, and certainly a lot of organizations are paying a lot of attention and focusing on that typically as part of their diversity, equity inclusion goals. And the pay gap is more of a function less of paid than it is about representation. But that is an important piece of what we think about today, when we talk about pay equity and pay equity can also mean dealing with identifying and addressing pay disparities that exist in the workplace, which cannot be explained for legitimate permissible job related factors. And obviously, that is an illegal pay practice. And so there's good reasons to avoid that you obviously want to keep yourselves out of court. But you know, I think even beyond those two things, pay equity can also just be about equal opportunity in the workplace. And, and certainly, there's so much focus on that as a result of the trustees strategic focus on diversity, equity inclusion, really, you know, virtually every, every corporation in the United States has a priority around that. And so I think, you know, in today's world, the definition and how we look at pay equity has evolved and changed and even within, you know, certain organizations, it may mean different things.

 

David Turetsky  6:59

I think you brought up a really interesting point, which I want to touch on a little bit, which is, there's a difference between regulation, and cultural implications of pay equity, right. So a company might want to be an employer of choice, and therefore have aspirations of pay equity. But they also need to follow the regulations of pay equity that exist in the locale, whether it's a municipality or the federal government, whatever it is, can you talk to what's the big difference between, you know, the regulations? And, and actually just good corporate practice?

 

Garry Straker  7:36

Yeah, I mean, that you're really kind of hitting the nail on the head in terms of I think, what the priorities are in today's workplace. And it used to be that, you know, we were more concerned about the compliance issues, right, and making sure we were, that we were on the right side of the law, right. But you know, I think for a lot of organizations, those days are behind us. And now it is more about culture, it is more about trying to elevate the employee experience in differentiating yourself as an employer of choice in in whatever way you can. And for a lot of organizations that is about, you know, being more transparent about pay, it's about creating pay practices and policies that are better understood, and just addressing the overall concern and expectation that employees have, the pay will be administered fairly within the organizations they work.

 

Announcer  8:29

Like what you hear so far, make sure you never miss a show by clicking subscribe. This podcast is made possible by salary.com. Now, back to the show.

 

David Turetsky  8:39

I think that gets us to our next question. And we'll probably spend the bulk of our time on this question, which is how pay equity has kind of evolved the compensation process as a work, because we used to be able to just market price jobs and kind of go home and, you know, be okay, everything will be okay.

 

Garry Straker  9:00

Yeah, that's certainly true. And for many years, now, market pricing has been the predominant approach to, you know, administering pay within our organizations. And that's, you know, was was partly because data just become, became much more sort of available and accessible. And, and I know, you remember the days when we used to get, you know, three ring binders six inches thick with with pay data, and it was laborious and tedious to have to wade your way through all that. But nowadays, we don't, we don't do that we have access to data and technology really at our fingertips whenever we want. But, you know, the focus on pay equity really requires a more balanced approach. Certainly market data is always going to be important and having you know, that that that market reference is really going to help make hopefully, well informed, you know, good decisions as it relates to pay. But nowadays, I think we have to look at it again, more broadly. We can't just hang our hat exclusively on market pricing. You know, I'm seeing a much more much more focus on, you know, trying to be a little bit more consistent, a little bit more disciplined and structured around how we administered pay. And, you know, there's still obviously, you know, times when, when you have to, you know, I'm gonna use the term shoot from the hip. But nowadays that comes with a significant amount of risk, particularly given the level of scrutiny and focus around pay equity. So I'm seeing just a need to take a much more balanced approach, yes, we're going to always sort of look at market pricing to help inform and guide compensation decisions, but increasingly, so we're going to use that in, in balance with the need to, you know, maintain internal equity.

 

David Turetsky  10:42

You brought up before the word transparency. And I think that where you're going as well, where you're talking about more structure, more rules and consistency brings up the point where companies are asking for, and employees are pushing for more transparency to understand how is my salary derived? How is my merit increase derived? And some of the clients that I'm working with right now, they are doing compensation studies specifically so they can drive more transparency in their pay processes. And therefore when and as we're deriving not only the market pricings, but also the structures along the way, we have to think about how are we going to be explaining this? And how are we going to be communicating this? So to me, that kind of also puts an important pressure point on an old practice that we use salary structures? And how are we going to modernize it and make it more transparent?

 

Garry Straker  11:39

Yeah, yeah. And that's, I think one of the most important trends we've seen, maybe in the last 12 months, is an increasing level of transparency. That, in part, by the way, has been driven by some of the legislative activity around the country. And so I think we're up to seven or eight states now that have required some sort of wage range disclosure in their job postings. Only two states in the country and New York City actually require wage range disclosures in job postings. So you know, I think that that's being pushed, in part legislatively. But I think more and more organizations are starting to see the value and merits of including that pay data upfront. And even in those markets that don't have those types of laws in place. We are seeing employers move towards, you know, including wage ranges in, in job postings, and certainly making it available to job candidates up front. And I think that helps, first of all, manage expectations, but I think it can also create a more efficient recruitment process. And, you know, the extent that the you know, the practice in the past was that you never really had that compensation discussion until you got down to the wire, right? I mean, think of how many, how much time and effort and how many interviews have gone through, you know, the recruitment process before you actually get down to the wire. And of course, that's where the rubber meets the road. And I think providing that level of disclosure upfront, is going to prevent, provide a more efficient process, it's going to manage expectations more effectively. And it's also I think, going to communicate and signal to, to job candidates, a little bit about your culture, right, and what your values are, and hopefully establish and build trust, right from the get go. Because that's one of the I think the one of the greatest benefits of transparency, is, is it sort of builds trust, and gives employees confidence and comfort that their organization's pay practices are aligned with values that are important to them?

 

Dwight Brown  13:44

You know, it's interesting, because I get when I tell friends and acquaintances what I do, I've been really struck by the fact that I've been consistently getting the question from them, why is it that employers never post their pay in a job posting? Yeah. And the truth of the matter is, there's no good answer for that. I think there were justifications there. But, you know, when it really comes down to it, it is a little bit counterintuitive as to, as to why we would have this established practice. And and then when I talk with them about the fact that we now legislatively, are seeing states mandate as they their reaction is good, it's about time.

 

David Turetsky  14:31

One of the fascinating things about it is culture, right? I worked for financial services institutions that said, if employees start talking about pay, it goes, it goes bad fast, and therefore, we're going to make it and I'm going to use this word, don't quote me on it, none of you on the podcast quote me on this, illegal, we're gonna make it illegal. And so we're going to not just frown upon it, but we're going to warn people that if you continue to talk about pay, you'll be put on warning and could be fired for it. Because they just didn't want to get into those situations where they had to explain differences in pay, especially given the fact that while base pay didn't really matter in financial services, it was really about the bonus. They didn't want people talking about their bonus, or their LTI package, because that's where it will go really horribly wrong. Yeah. And so that secrecy, and that veil of secrecy led to kind of a tense balance between giving them enough information and giving them the information they needed to, to be a party or a business partner in those discussions.

 

Garry Straker  15:41

Yeah. And I think, David, that, that sort of level of transparency, and that trend that we're seeing goes beyond just just beyond, you know, the workplace and employees. Other stakeholders have a vested interest in seeing more as it relates to human capital practices and pay practices specifically. And, you know, it's one of the reasons why the SEC has, has indicated that they may be introducing some more stringent rules as it relates to human capital risk information that will need to be reported by publicly traded companies. And that will include by the way, things like, you know, potentially, you know, the pay gap difference that exists in the organization, any, you know, pay equity claims, or lawsuits. And, you know, I think the SEC is recognizing that human capital risk is investment risk. And so when you start getting the attention and the focus of the investors, yeah, that's a way of changing things.

 

David Turetsky  16:38

We had regulation SK, I guess it may be a year ago, now, maybe a little bit more, which did start talking about the mandated disclosure of material HR metrics. And while they didn't specify which metrics, they were, I think a lot of us who follow it, were very surprised that they did not specify things like pay equity, or pay gaps or things like that. So I totally agree with you. And I think it's a really good trend. Hopefully, it will be there. Because as these things start coming out into light, especially if it does increase the risk, then people are going to vote with their feet, especially investors. And it will, I hate to use the word punish, but it will definitely have a lot of impact to organizations that don't take it as seriously or don't follow it.

 

Garry Straker  17:27

You know, David, I anticipate some day in the future where my analogy is, you know, how much time and effort we spend in choosing colleges, for our children, I have three children and, and so when you started, you know, to go down that path, you looked at things like graduation rates and class sizes and crime on campus, and you look to all these different things. But nowadays, you know, we get out of college, and we go join, join an employer, we don't know anything about them. We just think we had a couple of interviews and met a couple of nice people. And we thought, yeah, that looks good to me. But I see a time in the future where those types of disclosures, especially around environmental, social, and governance issues, and again, human capital, you know, risks, I think employees are going to expect to see it. And those are the things that we'll be looking for when we go and maybe submit a job application, they'll probably be some report that we're going to want to see before we even consider throwing our hat in the ring.

 

David Turetsky  18:24

Absolutely. You know, it's really funny, you bring up the ESG because we just had Susan Hunt Stevens on talking about ESGs in today's organizations, and talking about how serious it is, and how it's really changing the equation for how organizations are looked by not not just by employees, but by investors. So good shout out to Susan Hunt Stevens for episode 19 of the HR day labs podcast.

 

So Gary, we're gonna transition and go to question three, which is, what other trends are you seeing in the workplace that relate to pay equity?

 

Garry Straker  19:09

Yeah, I mean, obviously, we just covered one of those. And that was transparency. But I think really, what I'm seeing is, is greater utilization and optimization of technology as it relates to compensation administration, and, you know, you and I have been doing this long enough that, you know, when spreadsheets came along, we thought that was the best thing since sliced bread. And but, you know, we know how cumbersome and challenging it can be to administer pay for a complex organization across different locations and, and, you know, hundreds of different jobs to try to pull all the market data together and be able to do that efficiently. And, and so, you know, I think one of the things we're seeing is more utilization and optimization of technology, particularly as it relates to pay equity because, you know, as you know, a pay equity audit or pay equity analysis does require some, you know, fairly sophisticated, robust statistical modeling and being able to do that within a software platform that houses all your compensation data and employee demographic information is just going to allow you to do that more efficiently, more routinely and consistently across the organization. So, you know, obviously, a salary.com technology....

 

David Turetsky  20:19

I knew there was gonna be a CompAnalyst plugin in there somewhere.

 

Garry Straker  20:22

So this is music to our ears. But, you know, I think demand for that, it's just going to increase.

 

David Turetsky  20:27

Well, it has to, right, and there's going to be more sophisticated algorithms that come out. But at the end of the day, what we're trying to do is get to a consistent approach, right. And it's not necessarily the sophistication of the approach, as it is the applicability of their approach, and the ability to explain it too and I'm not just talking about the plaintiffs attorneys or to defendants, I'm talking about it in the way in which you're explaining how and what you do to your employees, right, and making sure they understand it, you know, talking about transparency. You know, I don't think there's a day soon where we're going to explain to them a pay equity analysis. But what we can do is explain that we are looking out for you. And we're trying to take care of you by making sure that the right people are being reviewed, and that the organization is doing the right things on your behalf. That's a level of transparency that hopefully we can get to, but I'm not sure that's going to come soon. But....

 

Garry Straker  21:29

Yeah, I think I, I think I agree with you David, I mean, transparency is a continuum. And there is a lot of people who will shudder a dimension of transparency, and just feel as though they're not quite ready for it. And, you know, probably the greatest opponents of transparency are those that, you know, maybe haven't had the sort of structure and discipline around their pay practices. And I know that there's probably some skeletons in the closet there that we don't are not ready to reveal yet. So for a lot of organizations, I think it's going to be incremental steps, I think there's a lot of housekeeping that needs to be done, and analysis, you know, around pay equity. And, you know, I know this is in your wheelhouse you and Dwight, but, you know, understanding and maintaining your data and the integrity of your data is just going to be critical, I think, going forward. And so I think organizations are really gonna have to, you know, focus on that as well.

 

Dwight Brown  22:18

It seems also at least from my working with various clients, that, that there seems to be a shift where people genuinely are wanting to adopt pay equity practices and wanting to understand what's going on in their organizations, it's kind of moved beyond the, it's kind of moved beyond this point where it is a mandate for people to this point where, where people have that desire, and they like I, I want to have equitable pay practices within my organization. But it's a shift. And then like you talked about, Gary, that next question is, how can we utilize our data to evaluate this and people are hungry for it? It's, it's not something that they're just going out and, and checking a box, because it's some sort of legislative mandate. There's a true desire that's coming through. And I think that this is a good shift in the right direction.

 

Garry Straker  23:24

Yeah, I think it's very, very positive. I think it's going to take a while for everyone to get comfortable with it, at least in some organizations. But, you know, I think, you know, we've heard so much about, you know, the large corporations who have, you know, committed to pay equity within their organizations and publicly announced, you know, that they've achieved a milestone when it comes to pay equity. And so the sales forces of the world, the Starbucks of the world, have been very, you know, very visible and vocal, the work that they have done in this in this area, but that has a way of trickling down. And I think eventually, you know, even small employers are going to have to invest time and energy in dealing with this issue in a way that they maybe have not done in the past.

 

David Turetsky  24:08

I think it gets down to who are the participants in those conversations as well, who are the consumers and to me, there are two parties that really need a lot more help. And that's managers and employees. Managers need to have the right tools at their fingertips to be able to not only make the right pay decision, based on new policies that you brought up before Gary, but also the support of their HR team to be able to make the right decisions, to be given the right information to be given the right policies and told how to do what they should be doing. I forgot one group in there which is recruiters. Recruiters are really special people. And they really need a lot of assistance and making sure that they're not getting bargains, that they're finding the right people at the right job at the right time. And being able to make the right decision for both the, the employer as well. As the candidate yet again, getting the right training, based on what we were talking about before, and then the employee is another really important, I would say note in this, which is, you need to be able to communicate with them what it all means, you got to break it down for them in real brass tacks, so that they really understand why and what and how it's not going to make you rich. We're not, we're not bringing everybody up here to this level. But what it's supposed to do is beat, make sure that you're paid fairly amongst your peers, or whatever the interpretation is for that particular company. And I think if we don't, if we don't take those groups and make sure that they're a party to this, then I think we'll miss the boat.

 

Garry Straker  25:44

Yeah, David, I agree with you. 100%. I mean, this just can't, you know, I hate the notion of, you know, comp directors or HR directors being the police around this issue or just pay generally. And organizationally, that's that's a real disservice, I think, to employees and managers, but, but there is an education process that needs to happen. And there is some level of accountability that anyone who supervises employees needs to embrace and that is, you know, be able to have a basic conversation in layman's terms, why pay, you know, how you're paid, what you're paid? And, and I always say, you know, how much is really important, but how can be equally as impactful? And if you don't know how, you know how much almost, it doesn't matter.

 

David Turetsky  26:32

Totally great.

 

So Gary, today, we talked about the topic, the really critical, important business topic of pay equity. We talked about how the focus on it has changed compensation practices, and what trends happen in the workplace because of pay equity. What else did you want to impart to our listeners today?

 

Garry Straker  27:00

Yeah, you know, I think we have to remember that all this focus and attention around pay and pay equity, it all, it is all focused on the employee experience. And sometimes we get so you know, we get our head down, and we focus in on the weeds so much. And we fail to sort of remember recognize that, ultimately, this is about trying to create an environment where employees hopefully can come to work every day with their intention of being the best version of themselves, without the distractions or concern or doubt, or, you know, mistrust as it relates to their pay. And if they feel as though that they are being fairly treated, then I think you've gone a long way to elevating that employee experience in a way that hopefully allows you to keep them you know, longer and, and, and recruit new employees, which in today's labor market, we know how difficult that is.

 

David Turetsky  27:59

Absolutely. Gary, thank you so much. We learned a lot about pay equity today. I really appreciate you attending.

 

Garry Straker  28:06

Thank you so much for having me. I enjoyed the discussion.

 

David Turetsky  28:09

Thank you. Dwight, thank you very much for being here.

 

Dwight Brown  28:11

Thank you. And thank you so much, Gary, for being here. This has been really informative.

 

David Turetsky  28:16

And thank you all for listening. And if you liked this episode, please don't hesitate to forward it to your friends and neighbors and parents. And if you really liked the episode, please follow us. Thank you very much. Take care and stay safe.

 

Announcer  28:31

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