Sally Loftis – Pay Equity Isn’t Scary – Here’s How and Why to Do It

Connect with Sally:

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Connect with Dwight:

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• dwight.brown@salary.com

Connect with David:

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• david.turetsky@salary.com

Podcast Manager, Karissa Harris:

• HRDataLabs@salary.com

 

Production by Affogato Media

Resources:

• Loftis Partners
• Compensation Consulting
• HR Data Labs Season 7 Episode 12
• HR Data Labs Season 7 Episode 10

• “It’s important to look at some of the demographic markers [around pay data] like department, gender, race and ethnicity, tenure, age—things like that. That’s when you start uncovering more of the inconsistencies in your data.”
• “We need to communicate [pay data analysis] results with some actions.”

Announcer  00:02

Here's an experiment for you. Take passionate experts in human resource technology. Invite cross industry experts from inside and outside HR. Mix in what's happening in people analytics today. Give them the technology to connect, hit record, pour their discussions into a beaker, mix thoroughly. And voila, you get the HR Data Labs podcast, where we explore the impact of data and analytics to your business. We may get passionate and even irreverent, that count on each episode challenging and enhancing your understanding of the way people data can be used to solve real world problems. Now, here's your host, David Turetsky.

 

David Turetsky  00:46

Hello, and welcome to the HR Data Labs podcast. I'm your host David Turetsky and today we have a very special guest Sally Loftis, of Loftis partners. Sally, how are you today?

 

Sally Loftis  00:56

I am wonderful, the sun is shining. And I'm grateful.

 

David Turetsky  00:59

It's actually shining here too in Massachusetts, which is very strange.

 

Sally Loftis  01:04

Yeah, yeah, we have really long winters. I live in the Blue Ridge Mountains. And our winters are like a good six months. So a sunny day in the middle of winter is a gift.

 

David Turetsky  01:13

There you go. And so thank you for having this. Sorry, I'm not saying thank you to you. I'm saying it to the weather gods. Thank you very much for shining on us today. So Sally, tell us a little bit about your background and how you got to today.

 

Sally Loftis  01:28

Yeah, well, I mean, I won't go back to the day I was born. But I will say, you know, I grew up in the South in a small town, my caregivers kind of worked in the margins of the community. So that really made me aware of some of the inequalities in the world, right, these people maybe who weren't seen or heard, and kind of fast forward to college, decided to major you know, and have a pursue a career in human resources. And so I've worked in human resources for the last 25 years and really focused more on the strategy side. And so in the last 10 years, I've kind of moved into a niche around pay equity, especially within nonprofits and small businesses. So that's where a lot of my work happens now, but also in organization development and social justice.

 

David Turetsky  02:12

Excellent. Well, it sounds like a lot of fun. And you're probably pretty busy too.

 

Sally Loftis  02:16

Yes, I am.

 

David Turetsky  02:20

So Sally, one fun thing that no one knows about you.

 

Sally Loftis  02:23

This was a hard one because the people in my house know this. But you know, I'm completely obsessed with our dog Rocky, and I literally talk to him like he's our child. He's a shepherd doodle. And even when no one is home, like I'm totally talking to him. He sits in my front seat of my car, we drive around. Where's the seat belt? Right? I have to I have to buckle the seatbelts. Otherwise my car beeps. So yeah, we say he's our favorite child. I'm just joking.

 

David Turetsky  02:51

Being a crazy dog person. I understand what you're saying. I actually have two dogs both pug one pug mix one pug pure pug. And they are my kids beyond the three that are that have the two legs.

 

Sally Loftis  03:06

So exactly saying I have three two legged ones too.

 

David Turetsky  03:11

Yes, well, I don't think I necessarily think that's necessarily that different than most dog owners. Most dog owners consider their dogs children. So, but I will give you one thing. I definitely don't have my dogs in the front seat. So that's definitely unique.

 

Sally Loftis  03:29

I live in a small town so most people know me when they see me and they'll be like, it's so funny. Your dog looks just like a person in the front.

 

David Turetsky  03:35

Well, Shepherd doodle will be pretty big too. Right?

 

Sally Loftis  03:37

He's like 45 pounds. Yeah, yeah.

 

David Turetsky  03:41

My pug mix is 70 was 70. Probably about? I don't know. 20 dinners ago. 30 Dinner skills.

 

Sally Loftis  03:52

I was like, that's a big Pug.

 

David Turetsky  03:54

No, here. Well, he's a very he's got the mind of a pugs who wants to eat forever. But he's a Norwegian Elkhound pug rat terrier and boxer mix? Oh, quite eclectic. The family. Yeah. Yeah. We will talk genealogy at some other time. Yes. So so let's let's transition over to our topic today, which is a really amazing one. And one that we've talked on the HR data labs podcast a lot. It has a lot to do with a lot of things. And you talked a little bit about it in your intro. Our topic for today is pay equity and digging into your pay data. So what's so important about digging into your pay data? What What will you find? What might you find?

 

Sally Loftis  04:45

Yeah that's a great question, David. I appreciate it. Because I feel like pay equity and pay transparency are words we hear a lot now. Right? And a lot of people are talking about it, but we don't always kind of have our hands around really what it means. And so one thing is Is it important when you're looking at PE data is that you really need to look at it beyond just kind of overall and at the position level, it's important to look at it around some of those demographic markers, if you have access to that data, right? Around, maybe, you know, by department, by gender, by race, and ethnicity, by tenure by age, things like that. Because what happens is, that's when you start really uncovering more of some of the inconsistencies in your data, for instance, you may be like, Hey, we, you know, five years ago, the technology department was our priority. And we were willing to pay, you know, 30%, more than everybody else at the time, and that process has never changed. But now, that's really not the same, and you've never kind of updated your internal kind of pay systems and decision making. And so digging deep, helps you kind of see some of those little things that you hadn't really thought about in a while, but really probably need to change.

 

David Turetsky  06:00

And you mentioned the when you dig in, who's the you in the circumstance? Who are the people who are actually doing that digging?

 

Sally Loftis  06:06

Well, you know, it varies across company. You know, there's, obviously there are vendors out there who offer, you know, we'll do the pay equity, some of those assessments for you, if you have the software, you know, HR, maybe the hrs that does that. You also some people, you know, some HR people are able to do it themselves actually have a blog post that shows people how to do a free pay equity assessment, kind of based on what I'm describing, do that you can, you know, basically do on your own, if you have the data accessible to you?

 

David Turetsky  06:40

Well, a lot of times when we deal with pay equity a lot, the lot of the audience that we're dealing with, is primarily at the head of HR level, or the head of HR plus the General Counsel level. So it's not, not every HR generalist, not HR business partner, and not every compensation person even will have access to or should be doing those analyses, right.

 

Sally Loftis  07:05

I mean, obviously, I think it depends on the team and what level of access they have to that. So for instance, I worked at a corporation for many years where I was kind of part of the greater HR team, and then the compensation team would come in once a year, and we'd sit down and review all the pay data for that department of, you know, 1000 people, and you know, kind of work through that. But then I'll also work with a lot of small businesses and nonprofits where HR, they may not have an HR person, or you know, it's more of like a generalist role versus like somebody you know, who's a director level, or something like that. So that then becomes, you know, a little bit different than if you have an entire HR team that's kind of there and ready to do the work. Right.

 

David Turetsky  07:50

So it really does vary on who they are, how big they are, and what resources they have at their disposal. Yeah, absolutely. And so let's talk a little bit next about what are disparities, because you mentioned basically a Rubik's cube of lots of different things, right. So you can test by gender, you can test by ethnicity, race, age, disability, veteran status, there's a ton. Which where do you start?

 

Sally Loftis  08:19

Yeah, I think one thing is, whenever you're doing that, you know, kind of pulling that pay equity assessment out and doing the work. First is approaching it with a sense of curiosity. A lot of people, one don't want to do the assessment, because they're scared of what they might find exactly right, too, is that they'll be like, Oh, my gosh, we're, you know, really bad in these areas. And it's more about, like, let's just kind of look at it and see what's happening. Because you know, how I mean, even especially, you know, with larger corporations, sometimes you just inherit pay structures that you didn't create very few times in my HR career have I gotten to create, you know, an organization's pay structure from scratch. And so, you know, or there's just, you know, mergers and acquisitions, you know, high turnover, whatever. So, understanding that we all inherit situations that maybe we didn't approve, or weren't and, you know, didn't have any involvement, but just preparing for the conversations that might happen, because what I find is when you start digging into that pay data, it's almost like a weaving, right? And once you kind of pull that key string, things start unraveling, because you start having conversations about well, the promotion process or you know, the hiring practices, or maybe development for a staff member, so it tends to kind of connect to a lot of other things.

 

David Turetsky  09:35

Well, you're getting into something beyond even just strictly pay equity because a lot of times pay equity starts at base salary. And I think you're getting into a couple of other things here. You're getting into opportunity. You're getting into maybe incentives are overtime. There's a lot of other things beyond just base pay in pay equity that then could get looked at.

 

Sally Loftis  09:57

Yeah, that's Thank you. That was a great insight. Because yeah, one thing I typically will have conversations with people with, you know, because we pretty quickly start talking about benefits, right? Because then it's saying, you know, one thing I work with organizations are really trying to center employee voice in the process. So we're getting feedback we're hearing from employees. And sometimes people are kind of surprised by, hey, you know, in the last two years, maybe this benefit is not as important anymore. Or maybe we need to add this benefit, or even some of the ways in which we work. Like I literally was just talking to a client yesterday about how they needed to kind of build some pause and reflection into their practices. And we understand like, what if you had like a new internal meeting day? You know, or what if you built a retrospective as after meeting after each of these processes, and that's kind of something that helps the whole organization and wouldn't be categorized as an employee benefit, right? But might give people some capacity, if they're giving you feedback about like, hey, my most important thing right now is not being so busy, right?

 

David Turetsky  11:01

And I hear you, and that's really a brilliant insight, I was thinking we're gonna go a little differently on benefits, where most benefits that have been created have been centered on the family unit, as it stood probably in 1950. And hasn't really evolved since then. You know, you think about life insurance, you think about health, obviously, health and welfare, you know, as part of everything like health insurance and dental insurance. But, you know, it doesn't really cover off on things in 2024 that we really care about, like, for example, pet insurance, as we were talking about before, or, Yeah, seriously, too. But, you know, are we missing the boat? Is there also part of pay equity that needs to look at? What do people in 2024? Need? As far as benefits go?

 

Sally Loftis  11:49

Oh, yeah, that's a great point. I think one is like, what are you trying to motivate people to do? Right? And then two is what are the supports you're putting into place for that, and, you know, supports as far as in, you know, in the workplace, but also around benefit structure? So to your point, yeah, I mean, it's been kind of a one size fits all in with benefits in for me, at least in my HR roles, there was always like looking at the utilization, right, how many people are using this. And so I think there's a shift that's happening and will continue to happen that, there's probably going to be maybe an increase of benefits or an expansion of benefits in a way that you it may only apply to a few people, it may not be something that everybody wants to opt into. But it's really important to that group of people is important for you to have it. So it's kind of almost like targeted benefits a little bit like, you know, like a multi tier program.

 

David Turetsky  12:48

Well, in the old days, back in the 80s, and 90s, we used to talk about something called a cafeteria plan. Oh, my gosh, you got to check off the box of which one you're on. Yeah, today, we really do have something like that it was really ala carte, where you don't just sign up for all your benefits, you actually have the choice of getting cash versus your benefits. And I think what you're talking about is a little different. It's a, you get to actually choose what benefits you'd like, even if they're not standardized. And even if you don't have the very high end, to be able to really, really make it make sense. There are some vendors that actually have that service where, you know, they have a marketplace filled with benefit vendors or perquisite vendors. And you can sign up and the company signs up for it and the employee gets to elect based on a, I guess you could say up having a menu, and you pay the price. Yeah.

 

Sally Loftis  13:37

Yeah. And sometimes I've seen where companies like give you you know, X many credits that equals however many dollars and you kind of choose what you want, right. I think the other thing around benefits to emphasize is with pay equity. Once you get people all into living and thriving wages, your benefits conversation is different. Right? Because if people aren't into the living and thriving wages, they're taking anything they can, you know, I mean, it's like survival, right? So it's important to, I think, have that conversation alongside pay equity, but also know that may change once you get any pay equity changes implemented.

 

Announcer  14:17

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David Turetsky  14:28

Let's say somebody does an analysis and they find that there are gaps. And whichever way the gaps are, what happens next, what do HR professionals do when they actually find inequities in their in their pay?

 

Sally Loftis  14:44

Yeah, that's a great question. One thing is that people will assume that once they do the assessment, they're ready communicated out to staff and or, you know, employees and I'm like, there needs to be a pause there. Because we need to communicate these results with some action DNS, right? Like, we need to kind of figure out how are you going to address them. And so that's not always a quick or easy fix, right? What I'm finding is more, like I said earlier is that people are having to kind of update their internal thinking systems. I'm personally and organizationally and team wise, you know, in so it takes some time to kind of have some conversations. And it may be your step is like we need to update our compensation philosophy, you know, or we need to change our promotion structure. And that may not, you know, that could take six to 12 months, sometimes if you're really doing it, you know, and then you have a group of C suite executives who may be super busy and have all these other things going on. So it's important to kind of think about like, this is going to take some time and how you communicate to employees about what you're doing, or when you're doing it is just knowing that once you do the assessment, if you're telling them ahead of time setting expectations.

 

David Turetsky  15:56

So let me step back a second, though. But when we find that there are gaps, we need to make sure first of all, there's statistically significant gaps, right. And the second thing I want to bring up is, don't you think that it's really a good time when those gaps are found, to then communicate about transparency and about how things should work, especially given the way in which most states are going or many states are going? And how those rules are kind of invasive to even non regulated states? Don't you think the best way to forward is to just be open then?

 

Sally Loftis  16:29

Yeah, I agree. Absolutely. When it comes to pay transparency, I tell people, it's really important to not just be about the legal compliance of it is about like, it is a it's an intervention of trust within the organization, right. And so you don't want somebody finding out what the person next to them is getting paid because they saw your job posting. Right. Right. So there is an element that work with with the clients around let's talk about your appetite for pay transparency, if you're you know, if you're in a state or country or whatever, that doesn't have it, but if you do, and then trying to do that in a manner that builds trust, rather than reactive, or, you know, just kind of throwing something out there. And there's a level of consent that needs to happen on that to like, some people would be like, Okay, we're just going to show everybody's pay, like, don't do that. Don't do that.

 

David Turetsky  17:24

Guarantee, that's something else.

 

Sally Loftis  17:26

I mean, that's yeah. And like I said, I work with a lot of organizations are smaller and are like, oh, yeah, we can do that. But I'm like, No, you know, there's some level of protection for the employees, but you can share ranges and help them understand how these ranges were established, and how people move through the ranges. Does that answer your question?

 

David Turetsky  17:43

Yeah. And that actually, is a mature conversation from a business perspective, as well as personal because now what you're saying is, here's the data, like, you're a professional, you're an adult, here's the data that we use to judge who the right person is for this role, and what level of pay we can support in that role. If you're being paid less than that, and you're in that role, we're gonna have a conversation, you know, we're going to have a discussion about your performance, your experience, if you were going to be hired again today in that role, you know, what rate would it be at? And then we'll talk about, you know, fixing it over maybe, maybe it's immediate movies over long term, and maybe it's during the next focal cycle, but at least it's a business conversation, and it's a mature conversation, not a Oh, go ask your manager and the manager, Chris, oh, go ask HR. And there's the finger pointing that goes back and forth?

 

Sally Loftis  18:33

Well, totally resonates with me, because I think about there's times I work with companies that managers don't even have access to their employees pay data, right. So that there's a level of education and having a manager pay that and structure that conversation. Well, but to your point, yeah, I mean, it's really being able to, I usually work with clients to build a paid grid, where anybody in the organization, you could kind of give them the resume, you know, maybe if someone and they could 99% of the time get into this is where this person should be paid based on what the grid is. So it's a little more objective and a very subjective world. And it you know, Pe is such a mystery, right, like, it's just what I do focus groups with, you know, employees, I'll be like, so what PE K conversations you have in at work, and they're like, It's first time we've ever talked about PE and open atmosphere. Or like when we don't like there's no conversation about PE unless it's like with HR in my performance review.

 

David Turetsky  19:34

That’s why we treat employees like children. We really do. And that's why I think transparency is finally maturing the conversation to a business discussion not you know, some emotional, horrible conversation you can't have what I worked at Morgan Stanley, back in the 90s it was a don't talk about pay or you'd get fired.

 

Sally Loftis  19:54

Stuff good. Yeah, well, and if you're doing the work around pay equity right, and You're looking at cost of living, and you've really kind of done that intentional strategic work around your pay ranges, then, hopefully, it becomes less emotional because you are paying people what they're worth in that time to a living that they can afford and keep on and grow in their development, right. So it's not as you know, working in HR, you're getting people's emergencies all the time of things happening at home, or, you know, whatever. And giving, you know, pay equity allows people to have a little bit of cushion to handle the unexpected.

 

David Turetsky  20:35

Exactly, exactly. Hey, are you listening to this and thinking to yourself, Man, I wish I could talk to David about this? Well, you're in luck, we have a special offer for listeners of the HR data labs podcast, a free half hour call with me about any of the topics we cover on the podcast, or whatever is on your mind, go to Salary.com forward slash H R DL consulting, to schedule your FREE 30 minute call today. Let's talk about the third question, which is what can an HR person do right now to actually have these conversations or at least start them in their company?

 

Sally Loftis  21:12

Yeah, there's, you know, several steps one is breathe, it's okay. You know, pay live, yeah, you're gonna live through this. And it's just a really good time to really kind of look at your pay right now, you know, coming over the last four years, obviously, the market has been so topsy turvy all talked about that a lot on this podcast. And so things are starting to stabilize a little bit. So it's, it's a great time to have those strategic conversations. I think one is just seeing kind of what the appetite is for those discussions within your decision making group, whether that's your HR group, your C suite, you know, kind of see what people are willing to say, also always say, employee feedback, get your data, right. What are people saying? What are they, you know, get all the data, I work with a lot of organizations that don't even have, like really good employee feedback loops. So that may be the first place to start, right, is starting to get that employee feedback. So it's really kind of starting to kind of prime the pump, right of like, starting to have these conversations, kind of getting the ball rolling, because you don't want to jump into this, and then find out, you know, do an assessment and then find out, nobody's gonna do anything about it, because then you're just sitting there holding the information. Absolutely.

 

David Turetsky  22:26

And, to me, it also starts with having conversations at the top, and making sure that the leaders understand, especially finance, that there is something that we're going to find here, we don't know what it is yet. But we're going to find something. And when we do, we need your support to be able to understand how it's going to impact the business, because it will, and it might be small, won't be very small pockets of impact. But it could be big, and we're going to have to fix it one way or another. Because this is an institutional problem, or it's not. And either you get on board with the fact that we have to fix it, or you don't. And that's a bigger problem. But if you don't have their support from beginning, there's really no way of being able to be successful in this great point.

 

Sally Loftis  23:09

I work a lot with finance, people in this work, obviously, because they're typically trying to do the kind of the cash flow, you know, cash flow projections, but also to your point to is looking at some of your data, right? If you have a 40% turnover rate, which is fairly common right now, you know, thinking about what's the cost of constant recruitment and the lost work, right, for the three to six months, it takes you to get a new person in and up to speed. If you could decrease your employee turnover by retaining more people potentially with pay, really the money's there, you know, you just kind of kind of, you know, the turnover is more of a lagging indicator and pay equity than a leading one. But if you're having more people accept Java job offers, having more people stay past the first year, those are all signs that you're doing the right thing.

 

David Turetsky  24:03

And you're gonna have to watch those metrics very carefully. And you're gonna have to pay attention and feed them back and watch the feedback loops. And one of the things that I typically do when I'm at the start of this process is to your point, it's not just about me, it's not just about employee surveys, I love looking at term reasons. Term reasons give me that feedback that we either know, we don't know why someone left. And either it's detailed, or it's really high level. But what I like to do before anything happens is where as I'm trying to, to your point, priming the pump with it with feedback loops, is at least make the determination reasons well put together enough that I'll have the right reason codes that will at least either tell me the story, or that that don't make it so generic that it doesn't help me at all. And there are many companies that haven't looked at their turn reasons in years anyway, and so it's a good time to kind of open them A table up and take a look.

 

Sally Loftis  25:02

That’s such a great point. Yeah, there's some people who don't even do that work, right, haven't kept up the data. Don't do exit interviews, of course, exit interviews when you're doing them internally. You know how, you know, some people be real blunt with you on the way out, but you know, some people, you know, don't want to burn a bridge and may not share everything. But yeah, absolutely. Exit data is huge. A huge indicator for you.

 

David Turetsky  25:262

So if there's anything else that you would tell someone when they first are getting started on this, what would you tell them? Is there any other advice you'd give them?

 

Sally Loftis  25:36

Yeah, I would say, you know, kind of what my clients tell me is that they didn't realize that there was going to be kind of so much change management work. And all of this, because it really is kind of pulling that thread that unravels the sweater. And so it ends up you're having to have conversations and other areas that you weren't expecting. So really assessing your capacity. I mean, obviously, I encourage everybody to go ahead and start doing it now. But understanding, it's probably going to take more, it will take more time than you want it to because you are having conversations and it's it's going to take more of your work time than maybe you initially assess.

 

David Turetsky  26:11

And maybe you need more skill than you actually have. Because you've made a few some regression analysis to see if there is some statistical significance you may need to do is tons of Excel work, you may even need to gather more data, right? Like if you don't have all of those pieces of data on each person. You can't start this thing.

 

Sally Loftis  26:30

That's exactly right. I mean, sometimes your starting place, like I said, is just do even have the data. Yeah. And that's a good starting place.

 

David Turetsky  26:38

So if you are going to try pay equity, you're going to try to find out where you are within the world of pay equity, you have a lot of work to do. And it wouldn't both both lists, Ali and I are okay. If you want to hang up now. Put the podcast down and go start lifting God. But if you're still with us, that's, that's great. And we would encourage you to do whatever you can hire experts like Sally or myself to come in and give you some of our advice as well. But But seriously, it's a it's a long, it's a journey. It's not, it's not a quick, it's not a quick race, it's not like a foot race.

 

Sally Loftis  27:20

I love how you frame that. And I will say one thing I've learned from my clients is it's really important to be in community, you know, build community with organizations that are doing kind of the similar type of pay equity work are headed in that same direction. start having conversations, because you're going to need some people. You know, of course, we consultants will stay all day long if you need us to but like, you're going to need some people that you can just call up and be like, how did you, you know, do this, you know, do you negotiate salaries, what's your, you know, 50% my clients don't 50% do. So I mean, just kind of talking, you know, through that kind of thing. And business reasoning is super helpful.

 

David Turetsky  28:06

All good words of wisdom, Sally. It's been a pleasure. Thank you so much.

 

Sally Loftis  28:10

Thank you, David. I really appreciate that.

 

David Turetsky  28:12

And we'll have to have you back on another topic. Whatever is near and dear to your heart.

 

Sally Loftis  28:16

Sounds like it will be our dogs.

 

David Turetsky  28:20

So that's our next episode with Sally Loftus, Sally, thank you so much for being here. Thanks, David. Thank you all take care and stay safe.

 

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