We recently celebrated Women’s Equality Day and small businesses may wonder if they need to worry about pay equity? I would hope most leaders would expect they are paying a fair and reasonable salary to their staff, regardless of gender. But is it that easy?
For many years, the practice had been to ask potential job candidates what they’re making at their current position. The thought being that amount could be utilized to determine an appropriate wage to bring them into the new position, ensuring you were offering the right wages to entice them to come on board. Unfortunately, what that tends to do is compress wages for some employees.
Although I don’t believe the typical intent was to compress wages, most business leaders would like to keep their employee wages down, not to limit employee pay but to maintain appropriate budgets. However, we need to refocus wages on the position and expectations, not on prior earnings. We need to focus on the requirements of the job to bring on successful candidates. What are the needed skills? Education? Licensing? Other? And what is an appropriate range in pay based on those expectations?
Now is a great time for small business to take the lead in this. While pay ranges are required in job postings in some states, they aren’t yet required everywhere. Why not get ahead of potential legislation and post ranges for any/all jobs needed?
We’ve been talking about transparency in organizations for some time now, and there is often a desire from employees to work in businesses that clearly communicate their purpose and practices. Small businesses often lead the way in innovation—let’s make pay transparency part of the practice.
I “grew up” in a time where people didn’t talk about what they made. It was private and personal. We now live in a 24/7 environment with cameras and microphones everywhere. This is something we need to embrace; open the door to these conversations. We shouldn’t hide the “worth” of positions and experience; whatever pay they “deserve” should be made clear. And there should be validity as to why they earn what they do and what led to those amounts.
Bottom line, should small businesses worry about pay equity? Let’s lead the way by embracing the opportunity to pay appropriate wages for the specific jobs being done. Regardless of who fulfills the role.
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