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4 Ways Leaders Can Ensure Equity for People of Color

Worth
Susanne Tedrick
April 1, 2022

Equity is an important element that leaders must address in their efforts to attract and keep diverse talent in their organizations. Within diversity, equity, and inclusion (DEI) initiatives, equity is providing each individual within an organization the right mix of resources and support they need to be successful in their role, and ultimately, an important contributor toward the success of the organization.

Although there are many laws that ensure fair compensation and employment opportunities for all, like the Title VII of the 1964 Civil Rights Act and the Lilly Ledbetter Fair Pay Act of 2007, people of color are still experiencing gaps in terms of pay and opportunity. According to a recent U.S. Bureau of Labor Statistics report, the median weekly earnings of Black and Hispanic people working full-time jobs were 21% and 22% lower, respectively, than those of their white counterparts. The gap has narrowed over the past few decades, but it is indicative that inequity persists.

Regardless of where you may sit within the organization, or if you hold a formal leadership title, there are actionable steps we can take to work towards closing the gap for people of color.

Addressing Misconceptions on Equity

Equity and Equality Are Not the Same

Equality is supplying the same tools, resources and opportunities to all talent, and in equal amounts. The problem with this approach is that, at the outset, it incorrectly assumes that every person in the organization is exactly the same—same skills, same background and experiences, and the same professional challenges.

Equity acknowledges that diverse talent brings unique skills and experiences to the table and that not everyone will come into the organization with the same level of skill proficiencies, or even the same strengths and weaknesses. Equity also focuses on investing in quality resources and tools available to talent rather than just simply on the quantity alone.

An example: A hiring team wants to recruit diverse candidates into their organization. They may decide to use tools that remove candidates’ personal identifying information to minimize the effects of unconscious bias (or biases that we are not consciously aware of, but creep into our actions and decisions). This would make the hiring process equal. To make the process equitable, the hiring team would go further and evaluate what in their organization may prevent them from attracting and recruiting diverse talent. They’d take the time to talk with their employees of color to understand their feedback on their recruiting experience and in the organization. They would examine and compile this data and incorporate both their quantitative and qualitative findings into their recruitment activities and practices.

Equity Is More Than Pay

While pay is an important piece, it is not the only means in which equity in an organization should be measured and assessed. It also encompasses access to opportunity, or the lack thereof.

“Equity is way beyond pay,” says Trisha Daho, chief executive officer and founder of Empowered LLC. “It’s about how your people are rewarded regarding the opportunity they are given in the organization… how they are given access to clients and other leaders within the organization”.

Indeed, the lack of opportunity equity can compound the already damaging effects of pay inequity. Without opportunities for advancement, workers may continue to miss out on additional pay that can be used towards repaying debt, personal investing or building wealth to pass on to future generations. Workers can also become frustrated with the (perceived) lack of opportunity and may leave the organization (or industry!) altogether.

Equity Is Not ‘Lowering the Bar’

Critics of practices to build equity (and DEI efforts overall), believe that they are in effect hiring and recruiting talent not on merit, as well as lowering standards to appear “politically correct” to others. They believe that talent recruited through DEI efforts may not be capable or competitive, and the investment involved in these efforts—including money and time—could be better spent elsewhere.

This has proven not to be the case. In studies from consulting firms from the likes of McKinsey and Deloitte, research has shown that companies with diverse talent by gender and ethnicity have achieved above-average profitability, are perceived as more innovative, and are more likely to attract top talent.

The need for real equitable practices within an organization is not just a social or moral imperative, but a business one. Any organization seeking to stay competitive, regardless of the industry, should view this as a genuine opportunity to become a market leader—not a burden, cost center or obligation.

How Leaders Can Help Build Equity

While building equity for people of color within an organization can be challenging, it is not insurmountable. Here are some ways to make progress:

Gain Support From Across the Organization

Efforts to increase pay and opportunity equity for people of color cannot be done by a single person or department alone. Cross-functional leadership must share the responsibility of driving these efforts and fully understand the effects that inequity can have on the cultural and financial health of the organization.

Develop Compensation Review Practices

It is important to regularly review the organization’s pay structures, including policies and practices on starting pay, merit pay and increases tied to promotion (if these don’t already exist, it is important to address that first). These types of reviews should look at elements like race, gender and ethnicity, besides performance, tenure and promotion history. Where pay inequities are present, it is imperative to take corrective action by making salary adjustments.

Examine Professional Development Activities

It’s also important to measure the effectiveness of professional development programs, such as mentoring and sponsorship programs. Programs such as these should be evaluated on their performance against organizational objectives, like identifying high potential candidates for leadership and then how many people actually move into these roles. It’s also important to ensure that different demographics of the organization’s population are taking part and completing these programs, too. If that’s not happening, reviewing how the availability of these programs is being communicated or their overall selection criteria may be worthwhile to do.

Be Transparent

Beyond legal and regulatory compliance, transparency on pay practices can positively affect employee engagement, satisfaction and retention. It can also reduce secrecy and gossip that may erode an employee’s confidence that they are not being paid a fair wage. Provide employees with information on how decisions on compensation, including merit pay and promotions, are made as well as the frequency of when compensation reviews occur. Publish the pay ranges for positions by title and experience level.

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