The Crucial Role HR Plays in Pay Equity

A man and woman sitting at a table with a laptop, engaged in a discussion.

Canada is currently 52nd among 146 countries surveyed in gender wage parity by the World Economic Forum’s (WEF) 2023 Global Gender Gap report. You read that right … we’ve barely made the top 50. 

The report also says Canada has only shown a 0.2 percentage-point decline in the overall wage parity score since WEF last checked. At this rate, we need 95 years to close the gender pay gap in Canada. 

In Ontario, there is a gender pay gap of 13% that deeply impacts racialized, newcomer, Indigenous, and trans women and women with disabilities. 

But despair not, there’s still hope to join this battle against the pay equity gap in Canada. At True North HR, our eyes light up when someone says pay equity because we believe in fairness for all. 

Contact us to begin your journey toward pay equity.

What is Pay Equity?

Before we implement the solution, we have to understand what it is.

So, what is pay equity?

Pay equity is when employees are paid equally for the same or similar job duties — regardless of their identity factors, such as gender, ethnicity, age, or other characteristics unrelated to their job skills and performance.

Why is Pay Equity Needed?

We could give you hundreds of reasons why pay equity is needed, but we’ll keep it short and sweet.

Employee encouragement

Wage inequities can demotivate underpaid employees and decrease overall workplace morale.

Employee productivity

Workplaces that value diversity keep employees happier and incentivized to be productive and perform at their best.

Employee loyalty

Pay equity attracts top talent and reduces turnover by increasing staff loyalty.

Legal compliance

Complying with pay equity legislation helps organizations avoid potential lawsuits or discrimination-related penalties.

Positive organizational reputation

Prioritizing pay equity, diversity, and inclusivity gives companies a positive industry reputation. This can also increase brand loyalty, customer trust, and community goodwill.

Compliance with corporate social responsibility (CSR) standards

Pay equity is increasingly viewed as a core CSR component. Through fair compensation practices, organizations demonstrate their commitment to ethical business conduct and social justice.

Stronger bottom line

In our experience, spending more on equal compensation is an investment that strengthens a company’s bottom line because it gives employees confidence in their relationship with their employer.

Common Hurdles in Achieving Pay Equity

To solve a problem, we must dig into the causes of the issue as well. Here’s what research shows could be the possible reasons why Canada is still behind in pay equity.

  • Specific demographic groups may either be underrepresented or overrepresented in a job category, which could lead to gaps in pay equity.
  • Women generally tend to be caregivers in a household, whether for children or elderly family members, leading to a need for more time away. Companies tend to invest less in employees they mislabel as ‘unreliable’ workers.
  • It’s 2024, and we still don’t have enough women taking on leadership roles to advocate for other women or blaze a trail.
  • Implicit and unconscious biases lead to distorted hiring and compensation practices.
  • Studies have shown that women are less likely to negotiate for higher pay.

How Do We Fix Pay Equity Gaps?

It isn’t all doom and gloom when it comes to pay equity. There are solutions, but they require some bravery.

Take it head-on

The numbers tell it all, so monitor the gender pay gap in your company by auditing salary data.

Offer workplace flexibility

Adopt a workplace policy that doesn’t force employees, especially females, who tend to be the main caregivers, to choose between family or work.

Change the incentive structure

Reward your employees for their quality of work, not how many hours they put in. Using the latter criterion disproportionately singles out those who have unavoidable household responsibilities.

How HR Can Help Attain Pay Equity

Pay equity can be a complicated and intimidating concept for most, but we’ve done this so many times that it’s become second nature for us. We’re happy to review the steps you can take to become a pay equity champion.

Creating a pay equity structure

HR professionals work with employees to gather market data on comparative wage rates to assess if their compensation practices are fair.

Internal support for employees

A key feature of adopting fair pay equity practices is to be transparent. An HR team can help field queries from employees who want to understand the company’s pay equity policies.

Application of compensation legislation

Federal and provincial governments have enacted pay equity laws to protect employers and employees, and HR professionals are constantly studying these rules. Hence, they can easily help design and implement related policies.

Companies can do a lot around pay equity to show their staff members they care about them. Want to know how you can do that? Let’s talk.