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Lack of equity in compensation, advancement may curtail employers’ DEI strategies

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Within a company’s overall DEI strategy, equity may be the missing link, particularly in three main areas — compensation, advancement opportunities and educational requirements — according to the 2023 Equity in Hiring Research Report from HireVue.

Only half of employees responding to a survey said they felt supported in their career growth and that people from all educational backgrounds have equitable opportunities to advance their careers.

“It takes deliberate effort to recognize the unique resources that different employees need to access the same opportunities — and ultimately thrive within the organization,” the report authors wrote.

“This could be anything from implementing policies and procedures that promote fairness to providing resources and support to underrepresented groups,” they said. “In the end, an equitable workforce will allow everyone to reach their full potential.”

In the survey of 1,500 HR professionals and 6,000 employees, employees were less likely to say their organization values diversity, that they feel a sense of belonging in their organization or that they feel their unique background and identity are valued.

Many employees noted a lack of transparency and equity in compensation. In particular, 52% of employees said there were significant differences in pay for employees with the same job title, and 47% said they’ve been discouraged from applying for a role due to the lack of information around compensation. However, 84% of HR professionals said they’re transparent about pay to both employees and candidates.

Employers can improve fair compensation practices with skills assessments and skills-based hiring, according to the report. Although skills-based hiring won’t solve compensation equity issues, it can help eliminate some subjective barriers, the report authors wrote.

Upskilling and internal mobility options may help as well, they suggested. In the survey, about 55% of employees said they feel supported in their career growth, as compared with 88% of HR professionals who said employees from all backgrounds have equitable opportunities to advance their careers in their organization.

“Many employers feel that helping employees learn new skills or advance in their careers is an open door to better jobs elsewhere. Could they leave? Sure,” the report authors wrote. “But more likely, they will feel supported to grow within the walls of their organization,” they said, which can improve productivity and the bottom line.

In addition, assessments beyond traditional degrees can help with equity in educational requirements, according to the report. In the survey, about 78% of HR leaders believe their organization provides equal opportunity for people without degrees, yet 86% said educational achievement is still an important indicator for hiring decisions and only 14% have dropped degree requirements from job listings.

Beyond that, about 40% of employees say they’ve been discriminated against in the hiring process due to lack of higher education. “If employers want to increase equity in the labor market, skills-based hiring must be a critical part of their strategy,” the report authors wrote. “It helps recruiters make better decisions and gives candidates the opportunity to demonstrate the required skills.”

Employees from different backgrounds may also experience a gap in workplace culture, which can contribute to inequity in employee experience and self-development opportunities. To improve these measures and prompt board-level action on equity goals, experts say directors need better data and tools to define clear targets, metrics, reporting structures and integration with business outcomes.

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