2021 has been deemed the year of DEIB. Last year, we learned a ton about the complex identities and needs of our employees as we navigated the global pandemic. Diversity, equity, inclusion and belonging (DEIB) is increasingly becoming a higher priority on business agendas largely due to the many inequities that were brought to light last year as a result of the pandemic, as well as the growing global social justice movements that have generated significant societal opinions and corporate responses.
Encouragingly, we are starting to see more and more companies working towards a culture of equality and belonging, to create a fairer workplace for all. However, it’s time for more organizations to adapt their total reward offerings to address these 2020 findings and make all employees feel more valued and respected at work.
In this blog, Ruth Thomas, Co-Founder and Senior Consultant at CURO and Gethin Nadin, Director of Employee Wellbeing at Benefex, answer your questions from our recent webinar, where they discussed what you can do to ensure your total rewards strategy is inclusive and meets the diverse needs of the different demographics within your company. We've summarized their insights here:
Total Rewards and DEIB:
As per a study by McKinsey , female job losses due to COVID-19 were 1.8 times more than male workers in 2 very diverse economies - US & India. When speaking of diversity, equity, inclusion and belonging in rewards, should we first emphasize the need for a significant shift in accepting the need for inclusion in workforce participation and income security across genders? What is your view on this point?
RT: The pandemic has unfortunately laid bare inequities that lie at the heart of our society and workplaces and is having a disproportionate impact on women - so much so that the economic impact is being described as a “shecession”. The social and economic aftershocks from the COVID-19 pandemic could set women back by decades. Even before the pandemic, not one single country has yet to reach gender equality, and even worse, many countries are moving slowly or even backtracking on key gender issues. So yes, employers and lawmakers need to focus on critical issues such as workforce participation and income security across genders.
GN: The Coronavirus pandemic set gender diversity back significantly. You were far more likely to lose your job or be furloughed if you were female. But even for those who continued to work, pay rates and being more likely to have caring responsibilities meant that women in work were still disadvantaged because of the pandemic. And this is a similar picture across the world.
This means we need to understand that the person we were born and the way society is structured means some employees are at a disadvantage. Employers have the responsibility and the opportunity to equalize pay and rewards that take into account these differences in society.
Having a good DEI strategy is great, but what is your view on how companies can ensure that it is absorbed in the company culture and reported concerns be addressed fairly?
RT: When it comes to actions, driving accountability from the top is critical to success. Agreeing which diversity and inclusion objectives are most important and which shortcomings are most in need of addressing in your organization is just the beginning. Objectives and shortcomings need to then be translated into an actionable plan that sets measurable goals aligned to your accountability framework.
More generally, opening up conversations on race across organizations and giving all employees a safe, comfortable space and voice to share thoughts and ideas is paramount. Many choose to do this through staff networks, encouraging discussions on different experiences to provide insight into unseen barriers and devise practical and creative solutions. It’s all about fostering an inclusive culture where a diverse range of people are fully and happily able to be themselves.
GN: Trust is a foundational part of the employee experience and is foundational when it comes to things like DE&I and wellbeing. If an employee can’t tell you their truth, you as an employer will never be able to make a difference. I think a key way that organizations can do this is to give people permission to be themselves. Whether that is raising the profile of your Black, LGBTQ+ senior members of staff or allowing and encouraging those senior members of staff to talk about their own mental health challenges. This shows the organization that diversity is embraced and celebrated. Start with creating a trusting environment as part of your DE&I strategy.
How regularly should reward strategies be reevaluated in line with DE&I?
RT: Most organizations are at the very early stages of aligning reward and DEI strategies, so for most it is a case of doing an effective audit to examine existing total reward provisions and how they serve all segments of the workforce. Then, put the processes in place to monitor on an ongoing basis so that you can be reactive to changes in your workforce composition. For our clients who are actively monitoring pay equity, many are adopting quarterly cycles for reporting.
Where can an organization get started on its pursuit of expanding and improving on DE&I?
GN: Ask your people. Create a diversity group who you can encourage to be open in a safe environment and they will help you to understand their community and challenges.
What's the first/most important initiative a company should do in regards to DE&I?
RT: Understand how diversity plays out across your workforce. Without accurate, up-to-date data, you cannot start to understand the full picture of your workforce and might not uncover crucial issues that need to be addressed.
How can we get management to sit up and pay attention to this? Turnover is down dramatically due to COVID-19 and there are few new roles. How do you present D&I as a genuine business problem within a successful business?
RT: An organization that embraces DEIB ensures all voices are heard. Through representation, organizations foster a socially and morally-adept workplace which is a win in itself. But various studies have shown that workforce DEIB can also benefit an organization’s bottom line by creating a competitive advantage in many ways. Studies conducted by McKinsey & Company found that ethnically diverse companies are 35% more likely to have financial returns above their respective national industry medians and that gender diverse companies are 15% more likely to outperform their respective national industry medians. Deloitte’s 2019 Human Capital Trends report states that organizations embracing a diverse and inclusive culture (including pay equity) have a 22% lower turnover rate and a 22% increase in employee productivity.
GN: The evidence is very clear. So much so that I can say with absolute certainty that diverse teams create better businesses. They generate more revenue, have more loyal customers and even have higher shareholder return. Collate the evidence, prepare to tackle the objections, and build a business case that DE&I should be a critical pillar of your strategy permanently.
With employees having very different needs, how do we create a sustainable plan that can be managed without too many complications?
RT: Increasing personalization in reward was an evolving trend to ensure the reward value proposition met the needs of an increasingly diverse workforce. Historically, we have seen this delivered through flexible benefit platforms. Leading organizations were already exploring this more broadly allowing employees to flex between base pay, incentives or equity based on their own personal needs and appetite for risk. Then the pandemic highlighted the importance of wellbeing, benefits and differing employee requirements. To future proof, we need to think about building processes (and no doubt technology) to support managing these levels of choice across the reward spectrum.
GN: I agree with Ruth that personalization is the secret to successful reward and wellbeing strategies. Your employees have very personalized experiences in their lives and they are expecting this at work now too. Remember that flexible benefits were always supposed to be about giving employees choice – so they could tailor reward around their lives and individual challenges. Over time, we’ve forgotten that and we made the assumption that the fair thing to do was to offer every employee the same benefits. Now we are back in the mindset of actually enabling employees to curate a benefits scheme or total reward that works for them, which is a great way to design employee experiences that really make a difference. Any leading benefits provider should be taking this approach.
Have value propositions changed during the pandemic? How has the total rewards value proposition changed as a result of the pandemic? How will total rewards change in light of the pandemic and WFH/remote work?
RT: Yes, the total rewards value proposition changed as a result of the pandemic with employers focusing heavily on the safety, health and wellbeing of their employees (through benefit and wellbeing provision) and now budget constraints are impacting compensation awards. That’s when you really have to optimize your reward spend. The best way to do that is to understand what’s effective and what’s ineffective, and what employees value most. So it’s really time for a reward audit – time to evaluate each element of your reward package, how much they cost, and which bring the most value and are most valued by your employees and which drive the biggest business impact to your organization. You need to evaluate ROI in terms of attracting, retaining, engaging and rewarding key talent. Don’t take anything for granted.
Any thoughts on proactive steps to mitigate bias in a recognition strategy?
GN: A really easy way is to ensure you aren’t using historical data to inform your strategy. Anything with human fingerprints on it probably has some bias in it. So start afresh and try to build a team to look after recognition strategy design that is diverse in itself.
How do you place DE&I strategies for non-for-profit organizations?
RT: Non-for-profit organizations should reflect the communities they seek to support. This white paper by BattaliaWinston addresses this topic.
What questions are legal to ask in the UK re: sexuality, disability, etc.?
RT: In the UK, The Equality Act 2010 makes it unlawful for employers to discriminate against job applicants and existing workers because of a ‘protected characteristic,’ namely:
- Gender reassignment
- Religion or belief
- Sexual orientation
- Marriage and civil partnership
- Pregnancy and maternity
There is no requirement under this legislation to collect data on protected characteristics. But if you do this, EHRC guidance advises employers to tell applicants and workers the reason why the monitoring information is being requested, provide details of the process for gathering, storing and using the information and implement procedures to ensure that the information is not used to discriminate against, harass or victimize them.
If you collect personal information (e.g. ethnicity, gender, faith, sexuality) about job applicants or staff, you must also protect their data.
How do you analyze inequity?
RT: Data-driven analysis on representation, pay fairness and the different experiences of employee groups across the talent lifecycle is essential. Only by analyzing employee data can we move beyond anecdotal evidence and subjectivity to truly measure inequality.
Where would be a good place to go to get a comprehensive and up-to-date overview of the legal requirements (reporting or other) per European country?
RT: The UK Fawcett society recently published a comparative analysis of Gender Pay Gap Reporting across a number of European countries and the European Commission also provides a summary of best practices in EU countries.
Should we share full ranges with everyone in the agency? Midpoints only? Min and Max only? Or should we share everyone's salaries?
RT: When it comes to pay transparency there is a big difference between broadcasting everyone’s salaries and being transparent about how pay is determined, and this can be represented on a continuum.
We recently polled webinar participants asking where they felt they would be situated on that continuum.
The results highlighted that most organizations are still in an “aspirational state” when it comes to implementing pay transparency, with the largest group not sharing any information on pay.
- 36% – No information shared except their own pay
- 28% – Share information on how pay is determined
- 16% – Share salary range data for current role with employee
- 16% – Salary range data shared internally
- 3% – Individual employee salaries shared internally
- 2% – Salaries shared publicly
What’s important is identifying where you want to be on the transparency continuum and focus on how to get there. We answered more pay transparency questions in another CURO blog.
Our experts closed the virtual session with 9 key takeaways on aligning total rewards and DEIB strategies:
- Build diversity and inclusion strategies that you can hold in one hand while you build and develop your benefit, pay, reward and wellbeing strategies.
- Use product design principle - design with empathy, ask yourself WHY?
- Do your benefits cater for specific gender challenges?
- Evaluate the utilization of existing programs and understand what the barrier to utilization is - need or knowledge.
- Audit your websites and handbooks to look for inclusive language, imagery and policies.
- Have a data driven strategy. Be curious about the stories in your data and this will allow you to move away from a “what about ’ism” DEIB plan.
- Understand how diversity plays out across your workforce.
- Examine existing total reward provisions and how they serve all segments of the workforce that “meet them where they are and where they want to go”.
- Build processes to offer personalization in reward.
Want to see how you can use CURO Pay Equity analysis software?
Book a 1:1 demo with us.
Want to see how you can use CURO Pay Equity analysis software?
Book a 1:1 demo with us.