1. to Guide the Conversation about
Ten Principles
to Guide the Conversation about
Pay Equity
April 2018

2. < 1 > Be Proactive, Not Reactive
Firms should consider undertaking a proactive pay equity analysis.
There are myriad ways to examine pay of employees and different approaches will be right for different firms. Some firms may partner with statistical experts to perform a multiple regression analysis, which compares the pay after taking into account factors that impact pay, like level, experience, geographic differentials, and other metrics. For other firms, it may be appropriate to conduct small group statistical review or evaluate employees person-by-person. Whatever the choice, reviewing the pay of employees is a step firms can take to ensure pay equity.
Any analysis should be conducted with the advice of counsel and under the attorney-client privilege.
Conducting an analysis, developing the appropriate employee groupings, determining the factors that most explain pay in your workforces, adjusting the model, and interpreting the results requires specialized skills. As a result, firms are wise to partner with experienced legal counsel and statistical experts who routinely conduct these analyses.

3. < 2 > Invest in Structure
If different parts of the organization or people holding the same broad title are paid differently, another important way to ensure equity is to be able to name, identify, and track those differences.
Investing time and resources in developing a job structure, obtaining up-to-date market data, setting salary ranges, and developing tools to track information in a human resource information system (HRIS) is essential to ensuring that firms can ensure its employees are paid appropriately and demonstrate the same.

4. < 3 > Remember Not Every New Hire is a Unicorn
Once you have a set compensation structure, empower your compensation and HR to help hiring managers stay within the structure when making hiring or promotion decisions.
Hiring top PR talent in a competitive market is difficult and there are enormous pressures to hire top talent at whatever price. Firms should consider internal equity before making an offer. If a new hire is paid above market and above his or her peers, this may require subsequent adjustments to peers, making the “one off” decision to hire outside-of-range much more costly.
What about the true unicorns? Ensure that proper approvals are obtained so that this can be documented and recorded.

5. < 4 > Empower Managers
Firms may wish to budget for equity adjustments. Including a fund for adjustments in the budget or setting aside a portion of the firm’s annual merit or promotional budget to address employees who are lagging their peers is another active way to address pay equity.
Empower managers to propose equity adjustments using this set-aside to address differences before they become issues.
Note: promotional “caps” can be addressed using this process, too.

6. < 5 > Act But Don’t Overreact
If there are unexplained differences in pay, commit to make changes.
But before moving forward, make sure that the review or analysis took into account all of the main factors that drive pay. Does one account director support a team of ten and another a team of three? Are there other material differences in scope and responsibilities by practice that are not captured by the electronic data that fed the compensation analysis? Have you separated your revenue-generating roles from non-revenue generating roles?
Many differences that appear unexplained upon first pass are legitimate. Thoroughly explore these first to ensure pay fairness.

7. < 6 > Speak Out
Speak out about pay equity. A stated commitment to pay equity from the top of the organization sends a powerful message about the firm’s commitment to diversity and inclusion.
But be mindful to protect the confidentiality of the project. The proactive pay analysis is typically conducted at the direction of the firm’s legal team, so ensure that you are not revealing too much about the confidential project. Focus on the bottom line results and the firm’s commitment.

8. < 7 > Don’t Ask, Don’t Require Candidates to Tell
Consider cutting every job seekers’ least favorite question “what do you make in your current role” and focus instead on the market, the candidate’s skills and experience, and compensation expectations.
Beginning in 2017, several jurisdictions enacted laws that prohibit employers from inquiring about current or prior salary details with external candidates in the interview process. Even where there are not outright bans, firms should consider these laws and determine whether an across-the- board ban makes sense for their organization.
In the absence of having information about prior pay, it becomes essential for firms to have pay structures and up-to-date market data.
Currently nine cities or states have enacted salary history bans. The laws differ in many respects but all forbid employer and third parties from asking candidates:
What they are earning
What they have earned in the past
What makes up their compensation package

9. < 8A > Revisit Opportunity Parity
If you already have a program in place to address pay differences look at opportunity parity.
Are both men and women being offered opportunities for high-profile projects, key client accounts, or travel opportunities, and mentorship opportunities? Are these opportunities provided equally to people of color within the firm? Are there outdated norms that need to be reviewed and addressed?
Fair opportunities are more likely to result in fair pay.

10. < 8B > Think Jungle Gyms Not Ladders
Creating career on-and-off ramps and building career jungle gyms, rather than straight career ladders is another step firms may wish to consider.
While employers are unlikely to face lawsuits because they maintain a traditional career-ladder approach, they are likely to miss key talent.
Embracing a less linear approach to career progression is likely to attract and retain important talent and, at the same time, may help narrow any pay gap between men and women. A win/win.

11. < 9 > Think Globally, Act Locally
For firms with global operations, you may wish to look beyond the U.S. to ensure pay equity and review global pay equity.
The pay equity and data privacy laws, the market, and the factors that are relevant to pay vary from country-to-country so the analysis should be undertaken within each country.

12. < 10 > Make it Sustainable
Ensuring pay equity is not a one-time activity.
Firms should consider building pay checks into their annual promotion, merit, and new hire process.
Consider building time into the annual pay process to conduct this review before the pay decisions are announced.
Think: clear structure, consistent application, and continuous checks.

13. Questions?