A majority of employers (60%) are not only conducting analyses to identify and address pay equity issues, but are conducting analyses with the objective of “resolving the root causes” of identified pay inequities, according to “Pay Equity Practices – Survey of C-Suite and Reward Leaders” from WorldatWork and Korn Ferry.
Recent media reports on government agency pay discrimination settlements, ranging into the millions of dollars, show that they typically date to pay practices at least several years in the past. But, if the survey findings hold up, such pay equity settlements may decline in the future.
The WorldatWork and Korn Ferry report says employers are taking action for a number of reasons:
- “Build/maintain a culture of organization trust”
- “Remove bias from programs and practices”
- “Because it makes business sense to do so”
Survey results reveal pay analyses initiatives typically are driven by the C-Suite or Human Resources. The report notes, “The legal function, while not owning the process are often an integral part of the team, esp., in larger organizations.” The bottom line is pay equity analyses can be protected by the attorney-client privilege only if the analyses are conducted at the direction of counsel for the purpose of providing legal advice and are kept confidential.
On confidentiality and disclosure of analyses results, the report states, “Most organizations broadly communicate the intent and general findings of the pay equity analysis to senior leaders, followed by people managers.” It also notes that only a “minority of organizations provide broad-based communications to employees.” Decisions about whether and to what extent to communicate analyses results are fraught because employers cannot publicize results while maintaining the attorney-client privilege.
The report makes many recommendations, including:
- Doing nothing is becoming less of an option
- Consider external resourcing to ensure organization capability gaps are covered:− External statisticians for robust analytics
- External legal counsel to protect privileged communications and legal expertise
- External compensation consultants for strategic / complete project management
- One and done is not sufficient: “Conduct annual reviews to identify potential pay disparities across protected class groups”