Totally Rewarding Chats | Ep. 18: Tackling Pay Equity Today and Moving Forward

Understanding pay equity, transparency, and the raw pay gap

In this conversation, Sean Luitjens and Gail Greenfield discuss pay equity and transparency in the workplace. Gail explains the difference between pay equity and the raw pay gap, highlighting the importance of addressing both the explained and unexplained parts of the pay gap. She also defines transparency as the mandatory and discretionary sharing of compensation information by organizations. Another key insight brought up from this conversation is the need for companies to consider pay equity and transparency as strategic decisions, and to be proactive in addressing these issues.

One best practice for companies to get started with pay equity is to conduct a proactive pay equity analysis to understand the current state of pay equity in the organization and remediate any issues. Sean and Gail recommend organizations seek advice and guidance from experts, whether through consultants, technology solutions, or available resources. They also discuss ways to analyze pay to ensure internal equity, the cadence of remediation, the importance of monitoring pay equity progress between remediation cycles, and the challenges of remediation.

In this episode:

• Host, Sean Luitjens, General Manager of Compensation Benchmarks, Visier

• Guest, Gail Greenfield, EVP of Pay Equity and Total Rewards Strategy and Solutions, Trusaic

Episode transcript:

Sean Luitjens (00:00.682)
All right, it is another totally rewarding chat and I am stoked to have Gail Greenfield here. How are

Gail Greenfield (00:07.511)
I'm doing well, how are you?

Sean Luitjens (00:09.038)
I'm all right. We are on opposite coasts. So I'm not gonna lie. If people hear the wind, I'm in New England. So for me, 80 sun, a little wind is like open the windows. It's a great and beautiful thing. And you are on the West coast, right? Near LA. So you're like that's every.

Gail Greenfield (00:25.377)
Yep, yep. I was just gonna say it's just about the same, but it was like that yesterday and it probably will be tomorrow.

Sean Luitjens (00:32.628)
Yeah. So if anyone hears any wind on mine, that's why, because I'm taking advantage of it. And Gail has her blind closed because she just doesn't.

Gail Greenfield (00:40.373)
Yes, I'm completely enclosed, ensconced.

Sean Luitjens (00:43.436)
Yeah. So Gail is the I'm going to read this because it is the one it is the winner for the longest title since we've been in this. So the executive Vice President of Pay Equity and Total Reward Strategy and Solutions. I got that for you.

Gail Greenfield (01:00.191)
Yes, yes, I don't use that. That's too long for even me. So I usually shorten

Sean Luitjens (01:05.546)
so tell me what you do there. And then you're kind of your journey. Give me your, I've been telling people, give the elevator pitch of where you're at and how you got there and however many floors you need so that I don't screw it

Gail Greenfield (01:18.429)
Sure, sure. So just to give you some context about Trusaic, the company I work for, it's a workplace equity technology and services company. And we use a combination of technology and as well as a support model to help companies achieve pay equity and opportunity equity. So that's really the essential of what Truzaic does. And in terms of kind of my work there, I guess I would say it's a little bit of everything. I'm very involved in client delivery.

So in the work we actually do for our clients, I'm very involved in that. But I also do quite a bit of kind of more marketing related activities. So I have a blog series that I've been working on for the last about nine months or so. And I post a lot on LinkedIn for those that are on LinkedIn. So I do a lot of that work. I also participate in kind of conversations with prospective clients help them understand kind of our methodology and our technology and our support model. So I kind of, I really like that. I have lots of different hats and so I never get bored.

Sean Luitjens (02:26.836)
Okay, Andy got stuck talking to me when we were touching base. So that's the downside of your job. And how did you get there? So did you magically show up there or like?

Gail Greenfield (02:32.301)
That's ridiculous.

Gail Greenfield (02:40.001)
I did, I literally just knocked on the door. So I spent most of my career at Mercer doing consulting. So doing pay equity consulting along with broader kind of talent management consulting. And the core of kind of what I did at Mercer and what I'm still doing to this day is basically taking an evidence -based approach to talent management, whether looking at the drivers of turnover, looking at the drivers of promotion, looking at compensation. It's all based on kind of what is the data revealing to us about how an organization is paying its people and how it's managing its people. And so it's really taking that evidence -based approach to help companies address pay and opportunity inequities. So that's really what I spent most of my time at Mercer doing. And that's just continuing on in that same vein at Trusaic.

Sean Luitjens (03:36.992)
Right, I did not know even though I won't lie, we talked a little beforehand. We've talked before. I did not know you were a fellow Mercer alumni. so long ago, we're not going to talk about when, but, but.

Gail Greenfield (03:44.467)
Yes, I saw that you too were with Mercer for quite a...

Well, that was, yeah, I started back in 2000 and stayed till 2021.

Sean Luitjens (03:57.486)
Okay, you were there before.

Yeah, so I was in the middle of that somewhere. So to prove you're a human, what do do for fun outside of work? You know, in Southern

Gail Greenfield (04:03.702)
Yes.

Gail Greenfield (04:10.515)
Yeah, you know, there's, I wish I could say I had some really hardcore hobbies and I actually have on my phone on the note in the notes app, I have a list of hobbies I might do when I retire. But so I'm, if you have ideas, let me know and I can add them to my list.

But I do, the things that, the thing I do do is I'm I'm a very, and I'm not just saying that because this is a podcast, I'm a very avid podcast listener. I would say most of the podcasts I listened to are not at all work related. I like my podcast to be just sort of more general. some of my, some of my personal favorites are this American life. I love hidden brain and radio lab. And how I built this and for my guilty pleasures, I love Smartless. I don't know if you're familiar with Smartless as well as the Office Ladies as a big Office fan. So I try and listen to some podcasts pretty much every day. So I guess that would be my main hobby at this point.

Sean Luitjens (05:19.542)
Okay. How I built this, how I built this I've heard. That's a good list. That's a good list though.

Gail Greenfield (05:24.755)
Yeah, I love how I built this. love hearing about how businesses are built and just the variety of different experiences of founders. And it's really fascinating.

Sean Luitjens (05:34.764)
And before we go, are you a reader too or are you a listener? That part fascinates

Gail Greenfield (05:39.211)
Well, I am a member of a book club, but I really don't have a lot of time to actually sit down and physically read a book. I used to, when I lived on the East Coast, when I lived in Maryland and I commuted to Washington, DC every day on the train, on the Metro, I could read a physical book. But now I just don't really have that time. So now I'm doing audio books. So I'm reading by listening.

Sean Luitjens (06:03.37)
That counts. So as we get started, I've been asking every kind of pay equity guru that we've kind of run through on here, take your pass at defining equity versus transparency out in the marketplace. And we'll start

Gail Greenfield (06:22.189)
Sure, I think that's a great place to start, particularly because I've been doing pay equity work for almost 25 years now. And in my experience, there's really a lot of confusion about what do we mean by pay equity? What is pay equity? And actually, when I'm talking with clients, that's typically the first thing I like to talk with them about is what are we even talking about?

Just so we're all on the same page, so we all are talking about the same thing. So in terms of kind of how I, here's how I like to describe it. For those that have ever, again, read my blogs or seen me present, they're probably like, yeah, I've heard her say this a dozen times now, but I feel like you can never say it often enough to remind people what we mean when we talk about pay equity. So most people are familiar with the raw pay

So the raw pay gap tells us how average or median pay differs for different demographic groups. Just as an example, the UK gender pay gap report requires companies with 250 or more employees to report the median pay of women compared to the median pay of men. So that's the raw pay gap. But conceptually, I like to kind of decompose the raw pay gap into two different components.

The first component I like to call the explained part of the raw pay gap. And then obviously the other part is the unexplained part of the raw pay gap. And so when we think about the explained part of the raw pay gap, that really reflects the extent to which pay differs by demographic group due to differences in what we think of as compensable factors. So these are factors like occupation, career level, education, experience.

So these are, in some sense, legitimate factors that you would expect to drive pay differences across individuals. And for the typical organization, the largest part of the explained pay gap is really due to representation differences across career levels. So if we look at almost every organization, you'll typically find men...

Gail Greenfield (08:42.015)
And white employees disproportionately represented in higher career levels that pay more, and women and people of color disproportionately represented in lower career levels that pay less. So it's this explained part of the pay gap. It's not necessarily desirable, but it's something that we can at least understand and we can also measure it. And in terms of how you actually go about addressing the explained part of the raw pay gap,

What's interesting is that you don't really address the explained part of the raw pay gap through pay adjustments. It's really more about career and opportunity equity. So if I'm talking to an organization about how do they address their explained pay gaps, it's really about how do we get women and people of color into higher paying roles? How do we design policies to ensure that all employees are provided with equitable access to career advancement. So, you know, when we think about pay equity, it's really quite distinct from this concept of opportunity equity that is really driving that explained pay gap.

So when we move on to the part of the pay gap that we can't explain, right, so this is the part that we can't identify. It doesn't appear to be due to the legitimate factors that we can measure. So things like how long they've been with the organization, their performance, what their role is in the organization, their career level, et cetera. When we think about these kind of the remainder that we can't explain, that's really what we think about when we talk about pay equity. It's the remaining part of that raw pay gap that cannot be explained by these differences in compensable factors and maybe due to inequities based on things like gender or race or ethnicity or some other demographic characteristic.

And when you kind of hear about this concept of the unexplained pay gap, you might also hear it referred to as the adjusted pay gap or the controlled pay gap. That's one of the other sort of problems that we suffer from in this field is that we tend to use multiple terms to mean the same thing. So the unexplained pay gap is really that adjusted or controlled pay gap. And the unexplained pay gap, you can address that quite directly...

Gail Greenfield (11:05.249)
By running a pay equity analysis and, if needed, adjusting the compensation of specific individuals who are part of an underpaid class. So ironically, if you think about the raw pay gap and the explained and unexplained part, it's actually a lot easier to address the unexplained part via a pay equity analysis than it is to address the explained part, which really speaks much more to structural issues and things like occupational segregation. Which are much larger and much harder to actually solve for. So pay equity is actually of the two, a lot easier to actually resolve. So that's kind of how I think about pay equity and how I define pay equity. And if you're up for it, if you're okay, I might test you a little bit on what I just shared. Because one of the things I've noticed is

Sean Luitjens (11:57.24)
Wow. Okay.

Gail Greenfield (12:04.391)
you read the headlines or you read in public sources various quotes. sometimes they're trying to sensationalize and you also just it's not always clear what they mean. And so I think understanding the difference between like the raw pay gap and pay equity is important when you're looking at like a newspaper or an article and you're trying to understand what is it they're actually saying. So I'm going to read a quote. And I want you to tell me if I'm reading about a raw pay gap or if I'm reading about a pay equity statement. Are you ready? Okay. All right. So the first one, women working full time and year round are paid an average of 84 cents for every dollar paid to

Sean Luitjens (12:43.81)
Okay, I'm ready.

Sean Luitjens (12:57.666)
So to me, that's raw pay gap.

Gail Greenfield (12:57.825)
Raw pay gap? Yes, that is a raw pay gap. In fact, that is the most recent information on the US gender pay gap.

Sean Luitjens (13:07.816)
Which sadly, I will point out that number has not moved much in the past several years, like

Gail Greenfield (13:12.909)
Yeah, I think it's moved. I was looking at this. I think it's moved by about 10 cents or so in the last 20 odd years. I mean, it's not, I mean, it's better than not moving at all. So there has been progress, but it's been too slow. All right, so here's your second quote. Our objective is that employees performing comparable tasks are paid similarly with any differences in pay explained by legitimate

Sean Luitjens (13:22.87)
Yeah, it's not

Gail Greenfield (13:41.717)
job -related factors. Our review incorporates relevant job factors, including location, function, and job level, while also considering individual experiences, expertise, and education.

Sean Luitjens (13:54.818)
Yeah, so to me that's the adjusted pay gap and probably done with some type of, you know, multivariate analysis on top of it to kind of bring it all

Gail Greenfield (14:04.575)
Indeed, exactly. All right, you're two for two. All right, I'll give you one more. I'll give you one

Sean Luitjens (14:05.527)
How

I'm with a public institution, at this point, you know, I'm okay, you know.

Gail Greenfield (14:13.357)
All right, your last one. Black women working full -time year -round are paid 69 cents and all earners, including part -time and seasonal, are paid 66 cents for every dollar paid to non -Hispanic white men.

Sean Luitjens (14:28.814)
I would probably say that's a raw pay gap number because there's yet categorization done.

Gail Greenfield (14:35.967)
Indeed. Yeah, indeed. And the reason it's important is because, you know, when you read just the headline somewhere, it's important to understand, are they talking about kind of an apples to apples comparison, which is really pay equity, or are they just talking more broadly about the raw pay gap, which of course is very important? I mean, the raw pay gap is what women take home with them, what people of color take home with them, right? That's what they actually, you their actual lived experience.

But the way of addressing that gap really varies greatly in terms of whether it's part because of opportunity inequities or due to pay inequities.

Sean Luitjens (15:14.54)
But I think that's where, and maybe we'll get there when we talk about best practices of analyzing pay equity, right? I use bus drivers as my example for a lot of people because, you know, it was probably an I am one, so I feel like I can call them out. Older white gentlemen, we'll call ourselves. know, to your point, the number of people that are probably bus drivers that are older white males, or at least male, are probably much higher than women.

And when it's same pay for the same work, and those institutions that hire bus drivers tend to have a, you know, 3 % raise, peanut butter spread, keger over 30 years. Like, at what point does that become point of diminishing returns and how do you compare those, right? So to me, that's the trickier one when you talk about adjusted pay gap, because your expertise as a bus driver probably starts out and you gain a lot of it fast.

Gail Greenfield (16:08.791)
Mm -hmm.

Sean Luitjens (16:11.276)
Right? And then after five or six years, you still become a better driver, it's experience, but not at the same rate. So how do you define that adjusted pay gap on like

Gail Greenfield (16:20.877)
Sure. Well, in that particular case, I would say that when you're accounting for length of experience, so experience as a driver, for example, you can account for those diminishing returns. That's what's so wonderful about regression analysis is that you don't have to have a purely linear relationship between, let's say, tenure and pay. You can actually have a relationship that increases at a decreasing rate, for example.

So you can specify your model so that you can determine if there are indeed these kind of non -linearities. But that would hold for anybody in that role, whether it's a male or female, white individual, person of color. But there's a great deal of flexibility in kind of multiple regression as an analytical tool.

Sean Luitjens (17:11.704)
So before I forget, how do you define transparency?

Gail Greenfield (17:14.775)
yes, yes, yes. So in terms of transparency, like to, again, I like to separate things. Just like with pay equity, I like to break it down, say with pay transparency. So I like to think about the aspects of pay transparency that are mandatory, that are simply required.

Sean Luitjens (17:23.63)
I'm not gonna get any better, am I? Am I gonna get

Gail Greenfield (17:38.157)
So for example, I'm sure I don't have to share with you that in certain states, California, New York, Colorado, and a whole host of others, I used to be able to know all the states that started to require pay ranges and job posting, but I gave up trying to remember because I think I ran out of fingers on my hands. And so I just now have it written down somewhere. But there's quite a few jurisdictions in the US require organizations to include pay ranges in their job postings. Similarly, under the EU Pay Transparency Directive, job applicants will have the right to pay range information from their prospective employer at some point during the application process. that, to me, is a part of pay transparency that a company is required to do. There is no discretion in whether or not they comply. Well, I guess there are some.

There really shouldn't be any discretion in whether or not they comply. They really should be complying. And then also on top of that, if you think about there are literally dozens, I think there are more than 50 jurisdictions around the world that have some sort of pay data reporting requirement in place. So those are the parts of pay transparency that are required of organizations.

Then, know, there's kind of, when I think about what, when a company is trying to decide whether or not it wants to become more transparent, it's really less about that mandatory piece, because they really have to do that, and more about the discretionary part of pay transparency. And I think of that as strategic pay transparency, because a company is really making a strategic decision about the extent to which it wants to move beyond what is legally required and refers to the extent to which an organization chooses to share information about its compensation philosophy and policies and practices above and beyond what is legally required. So this discretionary component is really, in my view, what defines an organization's pay transparency approach. What are they choosing to share above and beyond what they are required to share?

Gail Greenfield (20:00.405)
For example, organizations need to decide what information to share. Like, are they going to share pay ranges across all of their job postings, not just in maybe job postings where it's legally required? Are they going to share their pay equity gaps? Are they going to share their raw pay gaps? All right, so there's a lot of decisions to be made. And then they have to decide, well, who do they share that information with? Do they share just internally, just with maybe their board and company leaders?

Do they share it more broadly with managers? Do they share it with employees? And do they start sharing information with candidates, with the public? So every company has to decide what discretionary information it wants to share about its compensation practices and who they want to share it with. But I think they have to recognize that there's a pretty quickly shifting norm toward greater pay transparency.

I don't think companies can hide too much longer, right? There's just been such a push for pay transparency above and beyond what's legally required. I think most companies would be wise to begin thinking about how they can become more transparent, how they can position themselves to become more transparent. I think the train has left the station and they just want to make sure that they're well positioned to kind of heed the call for more transparency.

Sean Luitjens (21:29.25)
No, I agree. think there's much like pay equity in the U .S. for those that are still using the ostrich method versus actually tackling it. You can either be defensive or I don't want to call it offensive, but use it as a industry, a proactive piece of strategy and working with your company and build trust. Or you can try to hide as long as you can. And that's kind of the first decision that I think companies have to make. Then it's to what level? To what degree will I go to share or not share?

Gail Greenfield (22:01.067)
Yeah, and one thing that I try to avoid is assuming that companies should be more transparent, right? So I think every company has to decide for itself how comfortable it is being transparent. For some, it's an enormous culture change, and it's not something that really can be done overnight, right? Really does require a larger change management exercise. And so I try not to be, I try not to tell companies, you should just be transparent because I just don't think that's very good advice.

Sean Luitjens (22:34.126)
I think I want to try

Sean Luitjens (22:42.06)
I agree. think before we dive into kind of best practices on pay equity, I think what's forgotten in that is the decision, but then how am going to communicate it and that ability to communicate how I communicate it, how am I going to answer questions like that piece is huge. And so the decision could be yes, but then it's like, can I do this well? No. So maybe I'm going to do it next year. I'm going to take a year to get my communication strategy in place. So it's not as binary as some think, I think.

Gail Greenfield (22:57.389)
It's huge.

Gail Greenfield (23:11.711)
Exactly. No, it's not. it is highly particularly in large organizations, right? Where just any kind of change management exercise is going to take more time than you would that then you would like. I mean that, you you wish there could just be a switch, turn it on. Everybody knows everything and we're all happy, but that's just not, not the reality.

Sean Luitjens (23:30.914)
That's term I use, auto -magically happen. So you work with a lot of companies and you talk to a lot of companies. So the thing I was really interested in is like, what are the best practices and best ways for companies to get started into pay equity? So as you talk about pay equity, you're like, well, you got to take all these variables and all these variants. know, I see the, you know, the term, you know, whiffs and pegs and stuff.

Gail Greenfield (23:57.549)
I love that. Wrists and pegs. Yes.

Sean Luitjens (23:59.882)
different methodologies which we could nerd out on, you if we wanted to nerd out on, you know, whatever, log linear, blender, Oaxaca, like it's overwhelming, right, for people that aren't like, some of us, it's our day job, right? So how do you see companies that have been successful about implementing this, how they start and work through the process to be successful versus getting overwhelmed and trying to tackle too.

Gail Greenfield (24:25.175)
Well, I guess one thing I would start out by saying is that you don't have to be an expert in statistics to do a pay equity review in your organization. That said, you will need some support because it does require the use of some pretty sophisticated statistical techniques that it's very easy to get things wrong.

And it's very easy to build a very bad model, very bad pay model that will lead to inappropriate pay recommendations and such. So I guess I would say that the most important thing an organization can do is really just take that first step of actually doing what I like to think of as a proactive pay equity analysis to really just understand what is the current state.

Pay equity in the organization, and then of course, remediate any issues. And in terms of the first, first step for an organization that's never done this before, first thing you want to do is you want to talk to your internal counsel about this. You don't want to go doing a whole bunch of number crunching, calculating. Even if it's some basic statistics of average pay for men and women, et cetera, you really want to talk to your counsel because they might choose to bring in external counsel.

They might want this work to be done under privilege. So I think that's really important to work with your counsel to figure out the appropriate protocols as you're doing this work. And in terms of the work itself, the first time you do this, an organization is going to need assistance. So they're going to need advice and guidance from an expert.

And what's great is that there's a lot of sources of information out there. So obviously some organizations are working with consultants to help them do this. Some are working with technology to help them do this. Some are doing it themselves using just available resources. There are actually some really great resources available out there that a lot of these vendors have created.

Gail Greenfield (26:45.773)
To talk about how to conduct a pay equity analysis. But ultimately, you still want to make sure that you're getting appropriate advice and guidance. And even if, for example, you choose a technology solution, you're still going to need support. You're still going to need some advice on how to segment your workforce. What are those relevant wage influencing factors that I should be including in my analysis?

Those are hugely important decisions. And making bad decisions can lead to bad results that you don't want to take action on. So the key is that you want to make sure that whatever you're doing leads to results that are reliable and robust. And you can actually feel comfortable taking action on in terms of making remedial pay adjustments. So I do think that organizations looking to do this really need to get some advice and guidance, whether they have a little money to spend or a lot of money to spend. You can still get pretty decent advice and guidance even when you don't have those resources. And what I would say, as a former consultant and currently working for a technology and support company, we're always willing to have conversations with organizations, even if they're planning to do the work themselves.

We're happy to talk to them about best practices around how to conduct an analysis and how to structure your analysis and all of that. People shouldn't be afraid to just reach out to experts and just get some advice because most are willing to provide some basic advice just as a kindness because we all want to see, or ultimately, people in this field really want to see organizations improve their pay equity situation.

And we want it addressed one way or the other, even if we're not the ones necessarily providing all of that guidance. I think we're all kind of willing to help. I think that's what I've noticed with the folks in this field. Everybody's really, we're all in it together to kind of make this a better world, at least in terms of pay equity.

Sean Luitjens (29:03.886)
Yeah, I agree. Just asking, you know, I know you're tech and you know, I guess we're both tech companies and provide services, but what's needed, what has to happen, you know, talk me through what your best clients have had and taking that 30 minutes is fine. I mean, I think it's, and to be honest, probably like you, some people are scared to call or don't want to call, but it's like, I actually dig those conversations. So it's like, you're not actually bothering us so much, you know, out of the gate.

Gail Greenfield (29:30.463)
Yeah, absolutely.

Sean Luitjens (29:31.0)
I'd probably add to your comment is, for me, one of the best practices I've seen that has to happen is comparing apples to apples. so understanding the jobs in your company. Initially it was an apples and oranges thing, and now it's not even red apples, green apples. You kind of have to understand which are Mac apples and which are Gap apples and which apples I'm putting in which bushels together.

And so that understanding that work, there's work that gets done to your point that you could do internally, you could do externally. That's the foundation, which then leads to the math, which is your data good, are your jobs matched and is your data good? Like is your pay data good, a reaction comparing apples to apples? So to me, that's kind of the other best practice before you even get to tech. And as a development nerd at a tech company, sometimes pains me to say that, the dev, math is math, right? I think you mentioned...

The models can be really complicated, but if you put the wrong numbers into the same model versus the right numbers, they come out differently. Otherwise, the same numbers into the model on the model. So I think that's a great point to start, though, like just figuring out and learning and gathering resources and what has to happen.

Gail Greenfield (30:37.803)
Yes, absolutely, absolutely, no, totally.

Gail Greenfield (30:45.963)
And getting the buy -in from leaders, I think that's really important. You don't necessarily have to have buy -in from every leader. Just one. mean, because one thing that I think organizations maybe don't think quite enough about is, what do I do if I identify issues? Have I set aside a budget for that? And while it typically doesn't require a huge budget,

Sean Luitjens (31:08.268)
Yeah.

Gail Greenfield (31:13.453)
to address pay inequities, it requires generally something greater than zero. So I think that if organizations are thinking of doing this, they want to at least have sufficient leadership buying that they can be assured of some sort of budget to address issues that arise.

Sean Luitjens (31:17.816)
Yes.

Sean Luitjens (31:30.51)
Yeah, or is it gonna come out of the 4 % that I always give? I think the other piece about something you said earlier, that part is kind of easier, I think, for people to get their head around. It's dollars, right? And dollars and more. The opportunity to put in these, I think is a tougher discussion with management. Like, if we lift this up and figure it out, part of it's just gonna be money. Part of it might be...

Gail Greenfield (31:43.051)
Mm -hmm, yeah, absolutely.

Sean Luitjens (31:56.108)
we've, whether we meant to or not, not been great about providing equitable opportunity. And are you guys ready to tackle and communicate that? I think that's scarier for managers than dollars, because the dollars can be fixed. We can argue whether you want to remediate, and I'll ask you in a minute, in a year, or you want to do it in three years, like what's best practices for the legal layer, but it's pretty

Gail Greenfield (32:07.017)
It is.

Gail Greenfield (32:20.041)
Yes, it is. It's a big, it's an easier thing to tackle.

Sean Luitjens (32:22.818)
The opportunity, you can't just put more people in that other role where other people are. How do you functionally make that change show up the company? How do you communicate that that's what we're doing? I think that's tougher.

Gail Greenfield (32:33.069)
Well, and it just takes so long. It takes a long time because organizations, if you find inequities in hiring and promotion, those are not events that happen that, I mean, it depends. Some organizations do have a lot of kind of velocity, depending on the industry, but the typical organization doesn't hire thousands and thousands of people and promote thousands and thousands.

Sean Luitjens (32:59.77)
And the other thing is,

Gail Greenfield (33:00.457)
It's difficult when you're trying to close those gaps. It's going to take longer because you just need that time element to basically address these higher inequities, promotion and retention inequities kind of over time as you adjust your policies and practices to ideally remove bias from those decisions. You have to then see how that plays out. So we make a change.

To, you know, we create a certain policy that we believe is going to bring in, you know, people of color into the organization, more women into the organization, or we're addressing some barriers to promotion. Well, then you need to let it play out. It's like an experiment, right? It has to play out for a couple of years before you actually see, this making a difference? And, you know, if it's not, you know, what do we do about that?

Back in between my days at Mercer and Trusaic, I spent some time in a DEI function. one of my main responsibilities there was to try and measure the effectiveness of DEI interventions. That's important, but too infrequently actually done, in my view.

Sean Luitjens (34:18.397)
Yeah. I think as we talk about remediation, like the last thing I talk about, and obviously I'm biased because I chose the working place that's analytically driven, is understanding kind of as you think about the best practices for remediation, where are you now and where are your opportunities to remediate? So to your point, do I have a company that basically has 5 % turnover?

In which case, I'm not going to be, but I'm going to have to remediate with my current employees by default. Or am I at a place that has 50 % turnover in which in two years, you know, I've got a hiring practice and I can solve a lot of that math. And same thing for promotion, you know, like those analytics are where we are now and getting that baseline now so that you can look at these things and over time, make the adjustments. Cause you have to let them play out, but you have to know if you're doing better. Am I steering in the right direction generally? And then make changes.

Gail Greenfield (35:05.591)
Mm -hmm. Yep.

Sean Luitjens (35:11.63)
So what have you seen though as people remediate from a timeframe and policy and process? Because it is interesting to me, the EU thing says 27 and people are like, it's 27. That's two to four cycles away. It's actually... No.

Gail Greenfield (35:24.299)
Yeah, that's not far off. So in terms of a cadence for remediation or a process, I would say for the typical organization, it's probably appropriate to remediate pay inequities once a year, ideally during the merit cycle.

If you do it less often, and I've seen companies do this before, I've worked with companies that have decided they only want to do this every three years. And if you remediate, let's say every two or three or four years, one, you're not necessarily addressing your pay inequities in a timely manner, and you also might end up with large remediation costs.

You want to at least remediate once a year. But at the same time, you may not want to remediate more than once a year because that has kind of drawbacks of its own. So just from like a budgeting standpoint, most organizations are not in a position to make pay equity adjustments multiple times a year. And also, if you make pay equity adjustments outside of your merit process, that might draw some unwanted attention to the adjustments.

So most organizations combining their pay equity process with their merit process and coming up with a single adjustment that they then communicate to their employees. But I will say that what we recommend organizations do is in between those remediation cycles that they monitor their pay equity progress. So just because you're not remediating doesn't mean that it's just a once a year exercise, right?

We would generally recommend like maybe quarterly or maybe at least once in between remediation cycles that you do another analysis to see how you're doing, right? To monitor your progress, particularly for organizations that have a lot of change, right? That either hire a lot of people, have a lot of velocity or if they're undergoing a lot of &A activity, right? So they all of a sudden have an extra, you 5 ,000 people.

Gail Greenfield (37:41.409)
that they didn't have two months before. So organizations that are more dynamic, you want to be checking on your progress so that when you get to that next cycle, you're not surprised. You're not like, whoa. And you can get a sense of budget. You can get an idea of, how much do I need to set aside in the next cycle for pay equity adjustments? So that's just in terms of the cadence.

But I also think what's really important is for organizations to not just think about running a pay equity analysis, making my remediating and then checking on it during the year. They really, I think, should be more proactive. Here's where I'm willing to stand on a little soapbox and say that companies should be more proactive in preventing pay inequities as pay decisions are being made.

Compensation decision, whether it's a new hire pay decision, a merit adjustment, a promotion decision, an off -cycle pay adjustment, that's an opportunity to help prevent or potentially worsen a pay inequity. So we really strongly recommend that organizations should be incorporating pay equity into their entire employee life cycle and making sure that pay decisions when they're made are consistent with internal equity so that you basically preventing pay inequities from occurring in the first

Sean Luitjens (39:14.542)
No, I couldn't agree more. My soapbox is kind of like every promotion thing, especially the other way. If you don't have a lot of them and you don't have a lot of hires, you don't get to fix it as frequently. So if I've got a high turnover location and I accidentally get one wrong, I got another 30 coming, right? You kind of hide the mistake or fix it. But if you're only hiring one or two people in a range and you continue to make the same mistake, you just don't see it.

Gail Greenfield (39:19.297)
cough cough

Sean Luitjens (39:43.564)
I think between that and the large disconnect between TA. So talent acquisition, I come from TA originally, so I won't say they're the root of all problems, but

Gail Greenfield (39:55.213)
Well, but their objectives, right? Their objectives might be a little bit different. Their objective is to get the person into the organization.

Sean Luitjens (39:58.67)
Time to fill, time to fill, and number of reps. Time to fill and number of reps, right? Those are the two big things they have. Nothing to do with how long they're gonna stay and what they make. And so actually, both of those are helped by the amount of money I can throw at that person, right? The larger part I can get, which is then thrown at the comp team to fix and pay equity. so I think, yeah.

Gail Greenfield (40:15.671)
Sure, of course. Yep.

Gail Greenfield (40:22.071)
Yeah, and it also leads to compression issues, may separate from a pay equity issue, potentially.

Sean Luitjens (40:29.24)
Correct. I think I'm on same page, like that remediation thing. There are two separate processes that you have to kind of keep your eye on, but bifurcate the whole, when I'm paying and how I'm tackling so it doesn't stand out. But I don't want to just tackle it once a year. Hey, it's that time to run equity and fix it. And then you're like, how did we get here again this year?

Gail Greenfield (40:50.911)
Yeah, now that is, mean, you know, some, and some organizations are fine with that approach. I, I'm surprised, but they are like, yeah, okay, fine. We do it every year. We spend a certain amount of money every year. Others are like, why do I keep having to spend this money? Why can't, what is going on? How can I prevent these inequities? And the biggest, the most important part of preventing those inequities is giving information to talent acquisition and hiring managers, et cetera.

Around here is the equitable pay range. If you set new hire pay within this equitable pay range, which is probably going to be more narrow than their actual pay range, their internal pay ranges, we can actually prevent inequities from getting worse. And so that, think it's an important part, getting that information to TA.

Sean Luitjens (41:37.322)
promotion.

I think promotions too, like do you promote by percentage of basic or to position and range? Cause if you just move to position and range and tackle it while it happens, otherwise you make a bad problem worse. I was already underpaid and now I'm going to give them a 10 % increase on promotion on a smaller number and move them into a lower rate. Like it doesn't make

Gail Greenfield (41:47.216)
yeah, don't get me started on that.

Gail Greenfield (42:04.715)
Yeah, that's one of my big peeves is when companies have some sort of rule about how large a pay adjustment can be, either for a promotion or a lateral. In my mind, that's no different than for new hires in many jurisdictions, you're not allowed to ask about their pay history. I think the same should be done inside the company too. I don't think there's somebody's pay history.

Sean Luitjens (42:30.196)
I think I need to go.

Gail Greenfield (42:32.737)
should be determining their pay in a new role or in promotion situation.

Sean Luitjens (42:36.278)
I think it's that regression line. So if you create a regression line for that role, and basically you're like, okay, you're coming in with, you know, zero years of experience, because you're in this new role, here's where you start, like, you know, and now solves the whole problem, because you basically fall on a line to start. So we can

Gail Greenfield (42:53.101)
Yeah, instead of saying, they can only increase, we can only do a 10 % increase. can never do a more than 10. They would never do that externally.

Sean Luitjens (43:01.016)
Correct, correct. There's two different modes for people hiring internal on -extremes.

Gail Greenfield (43:06.987)
Yeah, that's, that to me is especially with the, the push and so many jurisdictions having that rule against, you know, asking about prior pay. don't see why you wouldn't apply that inside your company to me, to be consistent.

Sean Luitjens (43:19.214)
Correct. I know we could go forever. So let me ask you usually the last question. It doesn't have to be pay equity, although I know that's how you think. If you could automagically fix one item inside of total rewards, wave a wand, what would it be?

Gail Greenfield (43:41.471)
Well, I think I'd be remiss if I didn't say I'd like to, you know, auto magically eliminate pay inequities. I mean, that will put me out of a job, but you know, that's okay. I'm pretty close to retirement.

Sean Luitjens (43:54.542)
It's such a, well, pay equity is kind of, it's in definition of a wicked problem, not just because I live in New England, but a problem that, you know, isn't solvable. just perpetually happens. So I don't think pay equity can really be solved forever. You know, it will get better at it, but I think that's a one.

Gail Greenfield (44:11.839)
Yeah, hopefully, yes, hopefully we'll see improvement, you know, over time, over time.

Sean Luitjens (44:16.398)
And I'm with you, I think most people, sometimes I've gotten in trouble when I've said all people, but most people want to be fair payers. It's just they don't understand how and why and the levers to pull to make that happen. But I firmly believe, you know, they want to pay equitably. They might decide they want to be crappy payers and pay at the 43 cents at all. That's fine as long as you're equally crappy to everybody, that's fine. But I think most people want to be, I'll say most,

Gail Greenfield (44:24.001)
Yes, absolutely.

Gail Greenfield (44:37.522)
That's fine. That's perfect. That's

Sean Luitjens (44:46.018)
Want to be fair and equitable, it's just how do you get there?

Gail Greenfield (44:49.739)
Yeah, absolutely. No, completely agree that it really is about, yeah, there are very few companies out there that really would say, yeah, I'm very happy not paying fairly. No, they want to pay fairly within their budget, within their ability to actually spend money on remediation. But what's great is that there are still ways to make progress, even with a limited budget. It might just take you a little bit longer to get there.

Sean Luitjens (45:14.606)
I agree. So thanks for being on. will say, Gail, we will have her contact information. You can find her. Obviously, if you have questions, she knows a lot. reach out. Touch base with her. She's pretty easy to find. I'm also happy to chat on this stuff. Like Gail said, I think most of us in this space that have been moving around with this, well, obviously, 45 minutes blows by.

Gail Greenfield (45:18.455)
Sure.

Gail Greenfield (45:41.013)
I know. I know we can't stop talking about it. So we'll talk to anyone who will talk to us.

Sean Luitjens (45:45.398)
Yeah, if you're trying to solve the problem, you're right. I've never, if I put myself out of a job because we solved that problem, I would be so fired up. Like I would just be the best thing ever. Thanks so much. I really appreciate it.

Gail Greenfield (45:53.601)
Yeah, absolutely, absolutely.

Sure. All right.