Pay equity, diversity and inclusion
Intersectionality and How It Impacts Pay Equity
Diversity, equity, and inclusion (DEI) discussions within organizations often focus on traditionally marginalized groups in isolation. For example, there might be policies that promote mentorship opportunities for women or an employee resource group (ERG) for Hispanic employees.
The differences within our sameness
These efforts are important; however, they are arguably overly simplistic.
Not all women have similar experiences and backgrounds. Nor do all Hispanics. In addition, an employee may be both female and Hispanic, for example, and such an employee would likely have a different lived experience than a white or Black female employee or a Hispanic male.
We say that such individuals live at the intersection of multiple categorizations, and that’s true of all of us. We may be simultaneously Black, female, heterosexual, Jewish, a parent, an athlete, etc. All of these traits or characteristics impact who we are as individuals and are important to our sense of belonging.
Understanding the intersections that help define individual employees is also important when it comes to pay equity, as we’ll discuss in this post.
What is intersectionality?
As noted above, we all exist at the intersection of a variety of characteristics that help to define who we are. In the context of DEI, intersectionality specifically looks at the multiple ways different groups and individuals face discrimination and oppression.
For example, a Hispanic lesbian may have experienced discrimination throughout her life based on her ethnicity, her gender, and her sexuality. That creates a very different lived experience than, for example, a gay white man may have had.
Intersectionality is important because it provides a framework within which to better understand the complex ways society treats different groups and individuals and the impacts of that treatment. As the EEOC notes, “pay inequity is not solely an issue of sex discrimination, but an intersectional issue that cuts across race, color, national origin, and other protected classes.”
Different forms of discrimination and identity have varied impacts on individuals.
Why is intersectionality important to understanding pay equity?
Pay equity is important in any organization. It refers to the expectation that similarly situated employees (i.e., with equivalent seniority, experience, skills, and job duties) should receive equal pay.
The business world, and society at large, is well aware that taking an average of compensation across all employees misses important variations among different groups – men being paid more than women, for example. This is why companies and other organizations look at comparisons between pay for different genders, races, and ethnicities.
As Cheryl Pinarchick, an attorney with Fisher Phillips told SHRM: “By ensuring employees are paid equitably, employers can increase efficiency, creativity and productivity by helping to attract the best employees, reduce turnover and increase commitment to the organization.”
Pay equity is more than just a competitive compensation tool too. It is also, “an opportunity to foster innovation, drive employee engagement, minimize turnover, maintain (or improve) brand reputations, and attract investors,” according to a post by the Harvard Business Review.
But just as pay can vary widely among employees as a group, based on individual characteristics, so too can pay vary widely among Hispanic employees and among female employees. Humans are complex. Using a single characteristic to define them and to make pay comparisons fall short.
Intersectionality is important to understanding pay equity because it looks more closely at the multiple factors or demographics that impact compensation, instead of focusing on individual factors in isolation. That process can be, of course, quite complex.
Intersectionality and pay equity audits
Most companies care about pay equity. That may be because of their values and commitment to doing what is morally right. Or it may be because they understand that employees – especially those from traditionally marginalized groups – are less likely to want to work for employers that aren’t committed to paying them fairly. Or it could be due to increasing state laws demanding equitable pay practices of employers.
Suffice it to say that in a business environment faced with the continued specter of the “great resignation” even as resignation worries grow, fair pay is an important business imperative.
The problem with the traditional approach of considering pay equity, though, fails to account for important nuances that can impact a company’s ability to attract and retain top talent. One-dimension approaches, based on just race/ethnicity or just gender, miss the full picture. If an organization is blind to the fact that it pays Black women significantly less than Black men, for example, it is unlikely to address that issue because it only analyzes compensation through a single dimension.
The dangers of single-demographic audits
Conducting a pay equity audit without accounting for multiple dimensions, such as gender, race/ethnicity, and age, can lead to an incomplete and potentially harmful analysis. This is because an analysis that only considers one dimension, such as gender, may reveal pay disparities, but it will not reveal the full extent of the problem. Additionally, it may not address the specific experiences and challenges that individuals who belong to multiple marginalized groups face, leading to lackluster solutions and blockers to achieving pay equity.
Intersectionality is key to achieving pay equity because it recognizes that individuals can experience discrimination and inequality based on the intersection of multiple identities, such as race, gender, and age. This means that the experience of discrimination and inequality is not just the sum of the discrimination and inequality experienced by each identity individually, but it is something more complex and layered.
For example, a pay equity audit that only looks at the gender pay gap may reveal that women earn less than men. However, if the analysis does not take into account race, it may not reveal that Black and Latina women earn even less than white women.
Similarly, a pay equity analysis that only looks at race may reveal that Black and Latinx workers earn less than white workers, but it may not reveal that within those groups, Black and Latina women earn even less than Black and Latino men.
The power of intersectionality
Intersectional pay equity audits are essential to simply understand the nature and scope of an organization’s pay practices. When conducting a pay equity audit, or any compensation analysis, employers must evaluate their employees’ pay at the intersection of gender, race/ethnicity, age, disability, and other protected class demographics.
Intersectionality is one of the key differentiators for Trusaic’s PayParity pay equity audit software. PayParity can analyze compensation through the intersection of gender, race/ethnicity, and age in a single statistical regression analysis. At once, employers can understand compensation differences across their workforces, accounting for multiple demographic details.
Other companies often analyze these demographics one at a time – that is – not together and through binary analysis. The danger in analyzing compensation this way, as mentioned earlier is that it is missing the whole picture.
The only way to determine whether your pay practices are truly equitable is to consider intersectionality. Contact Trusaic today to see how PayParity can assist in more accurate and meaningful pay parity audits.
If your organization needs assistance achieving its DEI goals, check out our professional consulting services and DEI software, PayParity.