How to take an intersectional approach to pay transparency

Many organisations are focusing their efforts on pay transparency, but need to remember that all aspects of diversity, equity and inclusion need to be considered in pay, not just gender. Aniela Unguresan considers the issues. 

In the face of economic struggles and high employee turnover, doubling down on diversity, equity, and inclusion could be the disruptive shock needed to invigorate the business landscape. But are organisations doing enough?

Pay transparency efforts, which are becoming more common in response to the EU Transparency Directive, often serve as an example of conforming to legal compliance rather than truly committing to a DE&I strategy.

While the new transparency laws will be a powerful tool for encouraging conversations about pay and any pay gaps, business leaders need to reinforce this with other inclusion efforts that demonstrate a commitment to creating equitable workplaces.

Beyond gender

For example, when discussing pay gaps, I think many people forget that other gaps exist beyond gender.

DE&I maturity cannot be achieved by focusing on the gender pay gap as a standalone issue, with ethnicity pay gaps also being seen across the UK and globally.

An intersectional approach to pay must be adopted to ensure we are considering all aspects of employee identities and how this may be impacting on equity.

While ethnicity pay gap reporting seems like a simple solution to addressing this gap, recent research by EDGE Certified Foundation revealed that France, Germany, Austria, and Belgium do not allow the collection of personal data on race and ethnicity by law.

This poses challenges to addressing ethnicity pay gaps with data not readily available for employers to address.

Even in countries such as the UK where data collection is permitted, a lack of discussion and legal focus on ethnicity pay gaps have resulted in significant pay disparities remaining unaddressed.

A UK study by Robert Walters revealed that 42% of black professionals, for example, had not received a negotiated pay increase in the last year, double the number of their white colleagues. So, why is this not being addressed as a priority?

Unconscious bias

If business leaders are noticing clear disparities in their pay increases or promotions, it is important to consider the unconscious bias that may be influencing these decisions.

It is essential to recognise and understand what biases we may have because of our lived experience, gender identity, social background, and many other factors.

Discussing the issue in an honest and open forum and raising the awareness of unconscious bias is the best way of challenging it within organisations and preventing it from blocking the path to diversity and equity.

It is also key that we remember that pay transparency will not solve the problem. Embedding pay transparency in legislation is key for opening important discussions, but recognising the gaps won’t close them.

You cannot have equity without balanced representation, and this representation is necessary to achieve long-term, sustainable DE&I progress.

Robert Walters’ research found that, in the UK, 41% of Pakistani and Bangladeshi professionals work in the three ‘least-skilled’ occupations.

Companies where all senior professionals are white men and women, with ethnic minority talent in lower levels of responsibility, will still be accepted as providing equal pay for equivalent work. However, this is not what true equity looks like.

Moral duty

Organisations must assess their intentions and ask themselves, are we running pay equity analysis to manage our risk? Or are we committed to investing resources into creating a more diverse, equitable and inclusive workplace? These are two fundamentally different directions.

Examining representation and pay equity across all levels of responsibility helps organisations to identify areas where they may be struggling to hire, retain or promote diverse employees.

While we all have a moral duty to ensure we are committed to diversity, equity and inclusion, it also makes business sense. We are in an economic cycle where there is plenty at stake for businesses, shareholders, employees, and consumers.

The failure to address persistent issues – pay equity and gender diversity, for example – in the workplace has effectively sabotaged the journey to a more prosperous future.

Business leaders need to proceed with calculated boldness to create the disruption needed. There is no better time than now to enthusiastically embrace DE&I because it is the optimal tool to produce the purposeful changes needed to replace time-worn habits with modern ideas and practices.

This will spur a higher level of employee commitment and in turn contribute to overall success.

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