How To Fight The Gender Pay Gap By Establishing Transparent Pay Systems

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Tim Reitsma Whether you are leading a company, team, or starting something where you will be hiring, compensation is usually one of those areas that are top of mind. Do I offer bottom dollar and see if they accept? Do I offer top dollar to someone who has experience versus others, or do I make everything transparent? Pay equity and transparency will promote a healthy culture, a thriving workplace in today's episode, we'll hear from an expert on this topic.

Thanks for tuning in. I'm Tim Reitsma, the resident host of People Managing People. Welcome to the podcast. We're people managing people, and we want to lead and manage better. We're owners, founders, entrepreneurs. We're middle managers. We're team leaders. We're managing people. And yes, we do human resources, but we're not HR, at least not in the traditional sense.

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My guest, Robin Turnill, is a founder of Pivot HR Services here in Vancouver, B.C., and in my opinion, is an expert in all things HR. So welcome, Robin.

Robin Turnill Good morning, Tim. Thank you so much for that kind introduction.

Tim Reitsma Yeah, I've known you for a while now. And we've you know, we took a course and a coaching course years ago and that's where we met and have stayed in contact. And so I've always really appreciated you and your insight and your friendship. So now I'm so excited to have you on today's episode, really talking about pay equity, transparency and, you know, we will talk about that gender gap. And so but first, before we get into it, what's top of mind for you? How are you doing?

Robin Turnill Yeah, thanks for asking. I am really excited to be on today, Tan. It's a funny thing we did take that course.

It was only a one day or three. It was a few days, of course, but it was several years ago now. But I still have this really clear vision of us salsa dancing.

So what's top of mind? Every time when I talk to you, the very first image I get was you and I salsa dancing in the middle of our group of people we barely know.

Tim Reitsma Yeah, that was our baby blushing right now. I'm glad it's me. You know, my awkward robotic salsa dancing image. Let's start things off way.

Robin Turnill And I think we all need that laughter in some of the things that are going on today.

You know, I have to say, as a small business owner who supports other organisations, just seeing have tremendous changes that have happened as a result of COVID.

But also being really impressed and the way that companies have been able to shift and respond, setting up there in place to work remotely wherever possible and really being able to shift some of their business models to respond has been really impressive. So that's really what's been top of mind over these last couple of weeks, both in supporting clients, but in watching and observing all the many stories we're hearing about on the news.

Tim Reitsma Yeah, I think you and I could have a follow-up conversation maybe even later this spring or summer, just on the landscape of work. You know, I know in British Columbia it's dramatically changed around the globe, it's changed. And so when we're recording this in March of 2020 and I'm really curious to see what work will look like later on this year, will it be a remote work culture now or will it be one where everyone goes back to the office? I'm really curious to see how this pandemic has is shifting are our work priorities. So stay tuned for that. That podcast just came up with that great idea. So thanks for that, Robyn.

Robin Turnill Absolutely.

Tim Reitsma So today's episode, you know, we want to talk about pay, no compensation. And I know I've worked in an organisation and while I've worked a number of organisations, but one I worked with was really secretive about pay. They said you know, you cannot share this with anyone. This is top-secret. Like it was a trade secret or I was gonna go to jail for sharing compensation. And so when I became a leader in that organisation, it was ingrained in me that we can't share and we can't share what people are making specifically on roles. And so, therefore, you know, least for me. I didn't think about pay equity. I didn't think about transparency. I didn't think about. Was there an actual gender pay gap? And so, you know, you wrote an article in an online magazine called People Talk and we'll share the link in the show, notes on pay equity. So what inspired you to write this?

Robin Turnill Yeah. So at the time, Ontario had announced a wage transparency act that they were just in the process of unveiling. And through that act, it became really apparent that DC was actually one of four provinces that didn't have any specific legislation that was moving towards addressing the gender pay gap. And at the time, with Ontario coming out with what is pretty groundbreaking legislation, it inspired taking a closer look at that to determine what were some of the key principles of their legislation. And in that process, I will just say I want to share about the legislation. But it's also important to note that they've put the legislation on hold when the new Ontario premier came into the province. That legislation has now been put on hold. So I don't know if it will end up being enacted, but what was created at that time, I think makes a lot of sense.

Tim Reitsma So, you know, I know this. We're talking about British Columbia and Ontario here in Canada. We do have listeners around the globe. And I think this is a topic that is so relevant to anywhere, any province, state, country that you're in is looking at pay equity. And so, you know, in the article, you talk about having an open and transparent pay system specifically to help close the gender pay gap. So what is an open and transparent pay system?

Robin Turnill Yes. So I think people often will get a picture of an employee less this huge Excel spreadsheet with all of these employee names. And then right next to the names, every single person's salary, which is then just widely distributed, posted up in the lunchroom.

It doesn't it doesn't quite look like that here.

Here's what it can look like. I won't weigh in yet on whether or not it should look like this. But here's what it could look like. Typically, what we're talking about, an open and transparent pay system. What we're referring to is that each role in an organisation would have an associated pay range or set rate attached to it. So, for example, if you're a sales associate in an organisation, you could expect perhaps that your pay range might go from forty to forty-six thousand. As an example.

And so every single rule that's in an organisation would have that number attached to it. And therefore, anyone that was applying for any position would understand what the associated pay range was for the.

Additions that they were applying for. So in the truest sense, it's not about the individual, but it's about the role and the associated value that role brings to an organisation.

Tim Reitsma OK. So I do like the idea of everyone's salary on a spreadsheet posted up in the lunchroom. And, you know, maybe sitting back and watching the reactions. Maybe that's the best course of action. But what I'm hearing is it's really just systematizing salaries and having ranges, I guess, for specific rules. So regardless of, you know, say, you know, John or Jane has applied for the job and we're gonna offer Jane one number and John a different number, even though they've got equal experience, it's really putting some thought into the system behind the pay. Is that correct?

Robin Turnill Exactly. And it imposes a rigour when you know that you're going to have to create these ranges for each of the positions. It allows organizations to be really thoughtful about thinking about, okay, what key skills, level of education, specific certifications, what are they going to be worth to our particular organisation? And through that process and there's a number of different ways that you can do this through what's called job classification.

You can do it where you assign a point value. So let's say a job requires a master's degree and that's going to be worth 20 points to that particular position. To have a master's degree versus a bachelor's degree might be given 10 points. And so when you're going through in your grading out rules that require master's degree, they're point value will end up inherently being higher. Or you might be asking for five years of managerial experience. And that would be worth a certain amount of points if a rule did not require any managerial experience, that would be worthless points. And so you tally up all the points for a particular role. And at the end of it, you might have your managerial roles having a point value, let's say a five hundred and those in senior adviser roles having point values of approximately four hundred and so forth. And it creates this hierarchy.

Robin Turnill And then for each hierarchy level you would have an associated pay range.

Now not every organisation is necessarily going to be able to enact a point system, but there are far easier ways to do that. And that's to look and say, OK, we're going to play the matching game.

We're going to take to our organising and we're going to match them up.

And we're going to say which of these two positions is most valuable to our organisation? What do we need? More. And so in a paired position, you might say, OK, position A is inherently more important to us than position B. So A goes on top, B goes on the bottom. Now you pair up position B with a new position and so forth. And you start to slot roles so that you can get a top hierarchy all the way down to what would be considered sort of your entry-level positions up all the way to your senior lettered leadership positions. And so once you have and that can take a very short amount of time to be able to develop this hierarchy. And once you have that hierarchy set, you can turn your mind to what the P should look like in those particular ranges. There are lots of different tools that you could use if you want to check it out on the market.

Robin Turnill Right.

You could do anything from PayScale to Glassdoor at a quick glance or rules that are posted on. Indeed. So there are some really quick ways, too, that you can sort of check with the market if you want to, and you don't have the resources to pay for a compensation consulting firm. And so that's away. But what that allows you to do is be clear about what are the rules in terms of their value to the organisation and how much should they be paid.

And knowing that you're going to have to actually make that system transparent to employees, it lends itself to the leadership team, really putting a lot of thought into that process.

Tim Reitsma Yeah, I think, you know, I think back to a leadership role that I had a number of years ago, and there were a lot of questions around how salaries were determined ads. You know, at the time we had performance reviews and salary reviews at the exact same time. So I'm pretty sure nobody ever heard what we gave in a performance review. They're just waiting for the number at the end. It's like me actually getting a raise or not. So, you know, there are people who can do that. But I'd also potentially advocate for separating those two. But that's, again, another topic. But the creating that transparency around that process and because we're getting so many questions, you know, we had a pretty large H.R. team. So we actually asked the H.R. team to run some lunch and learns on how we actually determined the salary. And we had a very complicated Excel file with salary data, point systems, ranges, experience, and that provided us, I guess, the rigour. So when questions did come up, we're able to justify it. It wasn't just a name or sorry, a number we just pulled out. So it's like, oh, I think your 1 percent increase or we're going to hire you at this dollar because, you know, I think that's the best, the best amount for your role. So it was very systematized. And I think that's what I'm hearing is a great takeaway for whether you've got a large HRR team or you don't have anybody in H.R. to help with this is having a system that's transparent to your employees and that you can stand behind. Does that make sense?

Robin Turnill It's him. It's. You hit the nail on the head.

It's really about the process when people try to determine if they think their pay is fair. One of the very first things you'll hear them concern themselves with is how did my employer decide how to pay me and what mine he should be? How am I paid relative to other people? It's that procedural fairness that people turn their minds to. I'll tell you an interesting story actually, just to highlight that fact. I was in the process of doing an H.R. audit with a new firm that I was going to be working with.

And one of the things that I was speaking to employees about as I was trying to get the lay of the land in terms of how they were feeling about some of the H.R. processes and policies that were in place at this particular organisation. And one of the things we were looking at was their bonus process. And the bonuses were actually extremely generous. But interestingly enough, the employees deemed that they were unsatisfied with those bonuses. And when you got to the why that was so, it was because they had no idea about what their bonus was based on. So by all accounts, this was a pretty hefty bonus to be giving people. And in fact, I can tell you from the sort of looking at the market that indeed they were paying over the market at the end of the day for total compensation to the employees at their organisation. But the employees were actually complaining about their bonuses because they had no idea how their bonus stacked up to the employee next to them. They didn't know the criteria upon which the bonus was set. And therefore, this company was paying a lot of dollars out for this bonus program that in fact, with d incentivizing people. And, you know, I think there's a lot to be said about paying attention to the process and the further surmise that an employer is paying so much of their operating budget in their salaries. Most employers want them. That's the biggest single expense that they pay out are their salaries and their wages. If they're not paying those out in a way that motivates and incentivizes their workforce, they're missing out on a huge opportunity. And that will invariably lead to people likely deciding to exit an organisation or be there and be there in a bit of a grudging way.

Tim Reitsma Yeah. And, you know, having people sitting in seats, taking up that space in your payroll or in your organisation, who is not happy? Just think about the quality of work that's coming out of someone who is not happy or miserable. And there could be a lot of very various factors to lead to that. But if there's confusion around pay and confusion around how bonuses are paid, it's an opportunity. It's a real opportunity for employers, especially today, to bring light and bring about some transparency to that. So I kind of want to shift the conversation a bit so that we know, people are listening to podcasters. There you go. There's like 15 minutes of a process of setting up the process. And it probably gave a great example of a scoring system, a way to quickly get salary data. But I want to talk a little bit about what do you believe is the root cause of pay inequity or, you know, if we want to get specific of gender pay inequity?

Robin Turnill Absolutely. So I think there's a multitude of factors that are present. The first one that all pointing to is the fact that historically it's been women who have exited the workforce to be able to tend to children at home as a result of maternity leave. And what we have seen is that the longer that an employee exits the workforce for any reason and the harder it can be to re-enter the workforce and be able to make strides ahead. So for each long period where women historically and even today too, you know, still continue to be the primary parent that exits the workforce upon the birth of a child and stays with them.

You know, in Canada, we have great legislation that allows a parent to stay home for up to 18 months. And a lot of women take advantage of that. Maybe not even once, but twice or three times or more. And over the course of that, your career.

Although a human rights legislation is quite clear, you can't adversely impact someone who has been gone as a result of eternity, it tends to happen.

In any case, people will have been gone for a long time, maybe missed promotion opportunities. Perhaps when they come back. People write them off a bit saying or they won't have the time to devote to their work very much because they're going to have to leave early for recitals or doctor's appointments or because of any child care reason.

So I think that has been a huge barrier for women both historically and still today in the present workforce. The impact of maternity leave. And I'm also a part of me, Tim. Where are you going to say something?

Tim Reitsma Oh, yeah. No, I was just thinking about, you know, as as you're talking about it, that didn't even cross my mind. I hadn't even really thought about maternity as a penalty. But you're right. I think of someone who is off work for a year or a year and a half here and in Canada, and they're coming back. And potentially that's a year, year and a half of pay increase. And were all your colleagues are jumping ahead, but you might be kind of left behind. And so, yeah, I think that's just a useful. A useful thing to think about.

Robin Turnill Yes, it's has a tremendous impact on women's earning potential. Certainly, it is an important factor. Another factor, I would say is that historically women's work and I'm going to put that in quotations, you can't see me, but I'm doing air quotes right now.

Where'd I say weapons work?

What I mean by that is traditional work that has been filled by women has often been work that has not been placed a high value on by society. So typically a child's care early educator roles. Women who work in day-care centers. Women who participate in domestic work in terms of housecleaning.

Even teachers, when you see them next to you as a profession, they're still widely dominated by women teachers. And when you look at some of the male comparator roles such as in policing, for example. So a lot of policing is male-dominated. Again, I really want to stress I'm in no way suggesting that there wouldn't be males in some of these more would have been traditional female roles. And I'm also not saying that there wouldn't be women in some of these more male-dominated walls. I'm talking about sort of large systemic viewpoint taking sort of a bird's eye view of this and where the majority of people are.

When I talk about traditional male or female roles and so when you look at the comparables, the traditional male roles paid more.

And inherently when we think about pay, the pay is a really deeply personal thing because at the end of the day, yes, pay equates to security and your ability to pay a mortgage and provide for your family and buy groceries and gas and the like.

But it also goes to a deeper sense of people's self-worth, because pay, in essence, can be a reflection of what society tells you you're worth. So that can be very alarming when we start to think about pay for its overall symbol. And overall, what we've seen is that female-dominated roles tend to have been dictated by society to have been worthless from a pay perspective than male-dominated roles. And that has led to quite a disparity.

A third factor is when we look at the types of programs that women versus men go into in university and university, of course, being that gateway to the type of work that people will do afterward.

Upon graduation, we see not as many women represented in engineering, architecture, finance, a lot of business degrees.

Whereas women tend to be more involved in the social sciences, education, languages. And as a result of that, even though women are coming out, there's a higher percentage of women in Canada that are coming out with university degrees. They are, though, going into roles that actually pay them less than their male counterparts.

Tim Reitsma Wow. So three very, very good points that you make. Robin. And I think for me, I'm just thinking about, wow, it's as I'm right now building a business and we'll be hiring people in the future. It's something we need to think about. Something that I need to think about is is how we're paying our people and ensuring that we've got a fair process and an outline process and putting our biases aside, putting our thoughts off, OK, well, you know, that's there may become apparent one day. So maybe I need to you will not hire them or pay them less because I'll be doing less work. And as leaders and organizations, whether you have an H.R. team or not, we're responsible for that, for those decisions. And we need to be able to justify those decisions. So I think it's it's pretty somber thoughts and points that you. You make. And so I thank you for sharing that. And so, you know, I think as we're going through this conversation and wrapping up in a few minutes, you know, what are a few practical things leaders can do to ensure that they're compensating fairly? You know, we talked about the process. We talk about the gender pay gap and especially with maternity and quote-unquote, you know, the male and female jobs. What can we do to ensure do we need to, again, post it in the lunchroom to ensure that we're fair? Maybe not. Do we need to hire a compensation consultant to review what's? What are some practical things that you can share with us?

Robin Turnill Yeah, absolutely. There are the good news is, regardless of the size of your organisation, whether or not you have any charred apartment, there are a few practical things that can be done. So some easy steps. I would say are to take a look at grouping your department. So taking all the roles in certain departments. So if I took all the roles in an accounting department and I sat down in a group, the light positions together, like the people responsible for payroll or accounts receivable and accounts payable, and I grouped them all together and I analyse who's making more in this department.

And so leadership just taking a look at each department.

And if there is a number of different business leaders and they can be responsible for doing that analysis for their departments, so it doesn't have to be cumbersome. But taking a look at it with fresh eyes that. That's a good way to start. The second is to determine some sort of process. Again, it can be a really it does not need to be a hugely cumbersome process, although I would say the more rigour attached to it, the more defensible usually the system. So I would say that so if an organisation does need help with that, there are lots of outside people who can assist, but just be able to answer these questions.

Why have we decided to pay this amount for this particular position? What is its value to our organisation?

So having that fresh look and then what's really important is making sure to not make you don't want the pay gap to continue to widen. For the gen and for genders so as to be able to eliminate that from happening.

Posting salary ranges up there on job postings. We know by the research that women tend to negotiate less for their salaries.

So if it's a blind posting where there's no compensation listed by virtue of not having a range posted, women are less likely to negotiate, whereas men are far more likely to negotiate. So right from the get-go, you might be building the gender pay gap into your hiring decisions if you don't already have a clear publicized wall salary range for that role.

The other thing that I would say is really important is him. You mentioned this at the beginning where people were actually getting, you know, maybe hauled out of the workplace and sent off for disclosing compensation information.

Well, the legislation that Ontario was primed to roll out actually prohibited employers from stopping employees from talking about compensation. Employees absolutely should be able to not be banned from being able to speak to each other about their compensation if they wish to disclose that.

We find that the more secrecy there is, the more likely that there are inequities happening within a pay system. So those are a few tips to get people started.

Tim Reitsma That's great. Robin, I was thinking about a horror story from early on in my leadership career. So I took over managing a small team and was fairly new to the role of fairly new to the organisation. It was my first leadership job. And so I didn't really know what I was doing, kind of flying by the seat of my pants. And one of the employees was going on vacation and thought it would be a good idea to just send his email to auto-forward to the team. Well, his pay stub was in one of those e-mails that were auto-forwarded. And very quickly, the entire team knew how much he made. And that really highlighted a massive pay gap in the team I was leading and. Spent a better part of six months cleaning that up. And so what seemed to be an honest mistake actually led to significant repercussions for me and for the organisation. We didn't lose anyone because of that, because we found that there was a pickup. There was a serious problem and we fixed it. And so if you're listening and you're thinking about your compensation plan, thinking about your team, know don't be like me and wait for an accident to happen, you know, get on top of it. You had to do what Robin was suggesting. Take her advice, even as simple as just analysing what people are making to see if there is some, you know, uncovered bias or mistake or something in your pay system. So, you know, the title of the podcast is as Mind the Gap. And it's so important to take a look at it now before any legislation comes down. I think it's the right thing to do. So with that, I just want to thank you so much for your time, Robin. You give so much practical advice and real advice. And again, well, we'll let our listeners know how to contact you. It's at Pivot HR Services. Yeah. So thanks for coming on.

Robin Turnill Thank you. Tim, it's always a pleasure to talk about this really important topic. And as a closing note, if I could just say, yes, we've been focussed today on talking about the gender pay gap. I would just note that we also see that the pay gap as it relates to indigenous peoples, people with visible minorities, and people with disabilities. And the reason why I think that's really important to note is a lot of this comes down to power. And those that are in a lesser position of bargaining power when they come into an organisation tend to be paid the least. And over time, that salary does not catch up with them.

And then when they apply at their next job and they're asked, "oh, what did you make at your last job?" And they have to say this lower than market salary, then they end up getting paid for a lesser dollar at their new job as well. And it follows and follows. So I agree very much with Mind the Gap.

And one of the very practical ways to do that is when you're hiring people not to ask them about what they used to make at their old job.

That's a really great way to stop that inequity from following forward.

Tim Reitsma I love that. That's such practical advice and so real. And I know we talked about gender, but it's more than just gender. There are pay gaps across different demographics and disabilities and people groups. And so thank you for highlighting that. And for those who are listening. Yeah, we'd like you to just take a look. Take a look at your compensation and your organisation. And, you know, if you like what you heard, please subscribe to our podcast at peoplemanagingpeople.com or wherever you get your podcasts and head to our website and leave a comment. We'd love to hear from you. So with that. Thank you. And thanks again, Robin. And we hope you tune in again soon. Take care.