In recent years, the topic of workplace diversity, equity, and inclusion (DEI) has rightfully become pervasive in domestic and international dialogue. However, employers should heed the dangers of adopting “overly aggressive” DEI policies within their organizations.

A recent discrimination claim involving global advertising agency Wunderman Thompson is a case in point. The agency found itself in court – and under public scrutiny — after veering too far on the other end of the spectrum in its efforts to reduce gender pay gaps within its workforce.

According to an article by Lewis Silkin, Wunderman Thompson was seeking to overcome a tarnished reputation regarding its pay practices. In 2018, the company disclosed a staggering gender pay gap of 44.7% in its workforce. Not long after, a top executive was quoted at a conference saying the agency intended to “‘obliterate’ its reputation for being full of ‘straight white men.’”

The comment sparked controversy in the media and among company employees. The issue was compounded when Wunderman Thompson later let go two creative directors who complained about the comments at the conference and who also happened to be straight white men, resulting in a court case against the agency for its alleged bias against individuals of one gender.

While the court acknowledged the agency’s desire to reduce gender compensation gaps as legitimate, it also found the creative directors were unfairly dismissed and discriminated against on the basis of sex.

Though the company was trying to advance pay equity, it instead damaged its reputation further.

Wunderman Thompson made a costly mistake in thinking that pay equity could be achieved quickly and easily. DEI is not a set it and forget it business function. Rather, meaningful DEI requires careful strategy and long-term vision. The case of Wunderman Thompson illustrates that overly aggressive actions and unrealistic expectations around time can result in reverse discrimination situations that defeat the purpose of pay equity measures, to begin with.

Employers must be careful when trying to remedy pay equity issues and further DEI not to discriminate against any group of people. This point was also illuminated by a court case in Ohio involving a police officer who argued that the City of Cincinnati was systematically discriminating against white males. While the outcome of that case is uncertain, it underscores a serious business need for ongoing DEI monitoring.

Employers can more effectively – and legally – solve DEI issues by taking authentic steps to remove barriers for underrepresented groups and ensure equal opportunity for all.

Well-meaning policies or practices can negatively impact workers based on protected characteristics such as race or gender. That’s where technology can step in to help. Conducting a pay equity audit is one way employers can proactively avoid discrimination inadvertent or otherwise.  The incentive for employers goes beyond checking the box. When it comes to profit and innovation, organizations that foster an equitable work culture are out-performing those that do not.

Trusaic’s PayParity solution uses consulting services and DEI software to help organizations be thoughtful and proactive in their approach to solving equal pay issues and achieving DEI goals. Our always-on monitoring tools are designed to safeguard your organization’s reputation and minimize any legal risk.

Learn how your organization can effectively implement the principles of equity in our research report, Creating a Culture of Diversity, Equity, and Inclusion, conducted by Harvard Business Review Analytic Services.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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