Mapping the Gaps: Rep Sooner than Pay and Replacement Reporting

Well thank you all so much for joining us today um we are really excited uh to be talking about this and I'm so excited to be presenting with Chris um especially today because there's a lot going on in this space um and there's a brand new um research study that just came out um that Chris authored on Bloomberg so really really thrilled to.

To be here U talking about mapping the gaps getting ahead of pay and opportunity Equity with you today um so I wanted to talk through a couple of housekeeping things um just really quickly as we um as we go through so this is our agenda and as you can say it's a pretty packed agenda of topics that we wanted to cover today um and.

Throughout this we're going to be talking about some of the laws around pay and opportunity gaps um and although I am a lawyer um I'm not your lawyer and so we don't provide legal advice at syo so nothing um that we talk about today should be taken as legal advice um please use the Q&A or the chat features to submit your questions and we'll.

Answer all of the questions at the end of the session um one note that if you use the Q&A portion and you submit anonymously we wouldn't be able to follow up with you um directly with an answer if we're not able to cover it so if you'd like to see a response please make sure to submit using your name so that we can make sure to follow up with.

You we will be sending out the deck today and a recording of all of the web of the webinar to all participants and all registrant um and we also have the live transcript enabled for this webinar so if you'd like to use this feature it's pretty handy um please turn it on in your Zoom toolbar setting now so that.

You can see that transcript for folks that are uh we have a lot of friends here today so thrilled thrilled to see thrilled to see so many of your names um on the registration list um but we also have some folks that are new to CIO so we wanted to I wanted to just tell you a little bit about CIO um CIO is.

A expert back technology that helps employers measure achieve and sustain workplace Equity so we have a best-in-class workplace equity analytics um platform that allows you to analyze resolve and present and prevent um disparities in both pay and opportunity we also help employers with their uh Global Pay Gap.

Um reporting obligations as we'll talk about a little bit more today uh but it's all expert-backed so we have expert support and Consulting with legal best practices um statistics reporting total rewards and Communications guidance and support and I think that that's really what differentiates CIO and and certainly.

What drew me to CIO was the fact that it was this mix of really sophisticated technology but also the expert advice and support that Spann that wide array um of areas which is really what I think employers need to be able to um to sustain their workplace Equity platform we work with more than 300 customers um including more than 30% of Fortune's.

Most admired organizations so the the amazing organizations that are listed below are just a handful of our customers that have allowed us to share um share their logos but many more also work with us in a more in a in a more confidential way we've analyzed data for nearly eight million employees across our 300 industry leaders um so we're.

Really we're so proud of our customers and and all of the work that they're doing we're also proud to share that cindia was named number 20 on fortunes 2023 Change the World list this is not one of those pay-to-play um recognitions but something that um that was earned by CIO um a as we were selected as one of 50 companies um and.

We're and we're shoulder toosh shoulder with organizations like apple and Patagonia and Walmart and Microsoft on this list so we're really thrilled um and really thrilled to be with you today today I'm joined by one of my favorite cin um and that's Chris Martin Chris Martin is a research Economist at CIO um he focuses his research on issues of.

Identity-based exclusion in the workplace so he has original resource research that has explored paying opportunity gaps the impact of the salary history um disclosure laws on job offers offers the link between Employee Engagement and compensation um and Chris it's um it's really nice to be with you especially today um because uh Chris has.

Original research um that was um published today in Bloomberg and I think that Michelle um is going to drop the link for that research um to show you um and it's really right on this issue which is the intersection of how do the laws impact the pay gaps that we're seeing um um across the US my name is Christine Hendrickson and I sit on cio's.

Strategy team I'm the vice president of strategic initiatives and so um I was previously a partner um and the co-chair of the pay Equity Group at cyar Shaw um and uh at CIO I work on a w wide variety of issues and I am so lucky to work with so many of our customers but one of the topics that I work on um a a lot and especially right now is our Global Pay.

Reporting um uh product so um so um very nice to be with you today to talk through through this Chris I was wondering if you could ground us a little bit in terms of what is a p what is this pay Gap and we hear this stat so often that women are paid 84 cents on the dollar although that's a new number um but I wondered if you.

Might be able to Define what we mean by pay Gap as we're talking about it throughout this webinar yeah yeah sure thanks Christine yeah so the the pay Gap is the difference in average earnings between men and women put most simply uh and the reason we car about this is because ideally we would like to live in a world where workplace outcomes were.

Not different for men and women um so uh where we would expect earnings to be similar between the two groups but that's not the world that we live in today um there is some good news here which is that the pay Gap is the smallest that it's ever been uh so this is data from the Bureau of Labor Statistics in the US um that shows that.

The pay Gap is the narrowest it's been the bad news is that it's still quite wide at 84 cents on the dollar or 16% so women earn 16% less than men on average on a weekly basis here um so there's a lot of factors that go into this but this is the real backdrop for this change in global reporting requirements is that women.

Earn less than men uh if we look at this across the us we know that every state has a pay Gap as well so while these pay gaps are relatively large in States like Idaho and Utah and some states in the south in North Dakota um and relatively narrow in places like California and Vermont and New York every state uh has the same uh Dynamic at play which is.

That women earn less than their male counterparts right um and there's a lot of factors that play into this and uh if you're interested in learning more about it there's plenty of resources um including I recently published an article both about the US pay gaps by state um and European pay gaps which we'll look at next um so Michelle is.

Dropping those links into but it's more complicated than women earning less than their male peers although that's a part of it right so it's people performing similar work women earning slightly less than the men that are performing uh the same job uh next to them there's other factors that lead into it some of those are within a.

Company's control like opportunity Equity or women um we'll talk more about that later but basically do women have the same access to management and Leadership roles through promotions um and then some other factors that are kind of more Society based that may not be within the purview of a single company to identify and address on their.

Own but long and short there's a pay Gap in all in all 50 states uh and in the district of Colombia women earn less than their male peers uh when we look at Europe a wide I I was just struck by the fact that it seems quite a wide span um and one of the findings I found so interesting from the the your research that you just.

Recently did that's in that that's captured in that Bloomberg article is the fact that the the states that have kind of longer over have had laws over a longer period of time and especially this cumulative effect of having stronger equal pay laws and salary history ban laws and pay scale disclosure laws and and the like that.

They they seem to be additive and that those States seem to seem to have um the the smaller gate gaps to start but I would to hear just your thoughts on on the impact of of the laws on what we're seeing on those pay gaps by state yeah yeah sure um yeah there's plenty to say about that research uh so basically what we did is.

We looked at occupational pay gaps So within people performing um the same broad occupation uh how are the pay gaps narrowing over time and So within occupations we see the same thing we kind of mentioned this on that first slide about the pay Gap that the pay Gap is getting smaller um it's not getting.

Smaller that quickly so typically when we forecast out okay well when do we expect women to have the same earnings as men on average um those are typically dates late this Century or into Next Century um but we do see that pay gaps are closing in some of these jurisdictions uh especially those that had larger pay gaps before and uh.

Implemented laws that increase transparency or put some restrictions on salary history bans for example in the job negotiation process so States like massach and Illinois um and Colorado and Washington and we see the pay gaps closing much faster in those States than they are nationally um and then New York and California are the other states that.

We think about as being kind of Heavy Hitters with longstanding or longer standing laws um that address these issues directly uh and pay gaps are were already smaller in those states too so basically we've we're seeing those states with these laws uh being leading the pack uh in terms of Occupational pay gaps across the US so so as chy.

Mentioned that's new research that launched today in Bloomberg so please do go check it out we'd love to for you to see that great and then how about what what when we're looking at Europe that this of course is not just something that's happening in the US it's happening globally but you did this kind of drill.

Down into also looking at the pay gaps um by country in Europe love to love to hear your thoughts on that yeah yeah yeah sure so so in Europe we see the same which is across almost all European countries um there is one tiny exception in Luxembourg which is in in Luxembourg women earn as much as their male peers but in every other European country uh.

Women earn less than their than their peers um there's plenty to look at at this map too so there are some countries where the pay Gap is smaller uh and somewhere it's larger um one thing that really stands out to me when I look at this map is some countries that we think about typically doing really well when it comes to gender equity in places like.

The world economic forums gender Gap report um those are often the nordics so Iceland Sweden Norway uh Finland all rank in the top 10 um but their pay gaps are are larger so when it comes to labor market outcomes of course that's just one of the many components that feed into these gender gap reports so there's all sorts of stuff like from uh.

Inheritance rights and equal protections under the law for certain things um so those countries do really well but there's still a large earnings Gap um between men women in those countries so key takeaway here is that what's going on in the US is also going on in Europe which is that pay gaps exist they're narrowing but they're not narrowing at.

The rate that we'd want to see and so so that really provides the backdrop for why we're seeing increased legislation uh across the globe and the real goal is to narrow these pay gaps um and some of that is by putting the screws to organizations like putting pressure on organizations for those things that they can control which is equal pay for equal.

Work or work of similar value and uh opportunity gaps as well so let's talk about what do we mean when I say an opportunity Gap so what what we're seeing here is data from the US this is from a report that we released a couple months ago we we'll talk a little bit more about this report later um but basically an opportunity.

Gap uh as we Define it is is there a difference in access to Opportunities between different communities and that can be hiring promotions and other forms of advancement um but one way that we've been tracking these opportunity gaps is just by saying okay well how much more likely are men to occupy management and executive positions than women relative.

To their overall representation in the labor force so you can see here that white men this is in the US uh using 2021 data from the EEOC but white men make up 30% of all employees in the data set yet there are 56% of Executives and 42% of mid-level management so non-executive management so you can see this over.

Representation of white men in those groups and then these are the two groups that face the largest opportunity gaps in the US black women and Latina women uh where black women are 8.4% of all employees but only 2% of Executives and 4.1% of mid-level management and Latino women are 7.9% of all employees and 1.9% of Executives and 4.1% of mid level.

Management so you can see over representation of white men in these groups under representation of women of color in particular but women generally in these groups and that's uh how we're tracking the opportunity Gap at uh at CIO so the opportunity Gap also exists in all states right so this means that here we're looking at executive.

Opportunity gaps we've got the data available by state and Industry a lot of different ways we can look at it um similar to pay gaps opportunity gaps are closing so there's been serious gains um for women and people of color in management and Leadership gaps over the past 12 years and there's still a lot of ground to cover so when we look at those.

Forecasts of when do we expect these pay gaps or these opportunity gaps to close we're still looking decades into the future um and you can see I I love calling out uh Wyoming here Wyoming has a smallest opportunity Gap Wyoming is the um equality State uh right the first uh state to have women suffrage um but still the opportunity Gap exists and.

When we look at Opportunity gaps for women of color these gaps tend to be a lot larger and for people of color too so the same goes for pay gaps I didn't mention it before but basically when we layer race into these analyses in the US we see that both pay gaps and opportunity gaps are larger for people of color and women of color in.

Particular okay so that's the opportunity Gap that's one thing that uh companies can control right ultimately companies decide who gets promoted uh I guess you know individuals have the opportunity to say no to a promotion um but generally when it comes to employee development um we do see that at the employer level there tends to be gaps in.

Who gets those development and promotion opportunities so you can read more about what's the state of the opportunity Gap in the US in our report that we launched um plenty of information here including our forecast so when those opportunity gaps will close you're on mute yeah yeah one of the.

Things that was really interesting to me um is the fact that the um in Chris's research was showing this kind of direct correlation um between either smaller gaps or more rapidly closing gaps where we had employer we had um states that focused on um equal pay laws and interestingly we have an emerging trend of opport opportunity transparency laws.

Um both in Illinois and Colorado two of the states that were called out in Chris's research um and also in the EU and so I would expect that as we look forward we're just newly entering a new legislative um season and I would expect that we're going to see more of this um because as Chris had talked about earlier the pay Gap is a little bit.

About equal pay for equal work certainly a portion of that but it's a lot about equal access to opportunity so these laws that are focused on the opportunity transparency in Illinois Colorado and um as part of the eu's Equal Pay and transparency directive um will require that employers disclose pay or um progression criteria we see that in both.

The EU and in Colorado requirements that you have to post job promotions or job opportunities we see that for some jobs in Illinois we see that as part of the Colorado law and then also information that you have to provide information about the selected candidate so far we're just seeing that in Colorado although Colorado has.

Interestingly become one of the leaders in these um more more TR um towards transparency laws um um in in the US and so I think that this is something that we're going to continue to see and it goes to the fact that or goes to the point that Chris had made about the fact that we have to really be looking at both of these things and we're already.

Seeing the the way that the pay Equity laws have impacted the pay Gap and I would expect that if we look out five years from now and Chris were to do similar thing we would see that the states that are focused on opportunity transparency will see will see closing gaps in those in those spaces as well potentially potentially we're in early.

Days on the opportunity transparency laws but but it's but it's but it's interesting Chris one one thing that we were talking about earlier is that this is not something that is happening just in the US um but it's also something that's happening around the world and we're focusing here on Europe um because there's a significant amount of data.

There but I wanted to but but certainly something that you're also seeing around the globe but wondered if you could talk to us about the um opportunity gaps in Europe yeah yeah yeah happy too yeah so we used it different data set here obviously um to calculate what's the opportunity Gap in in Europe um just for the record or our software opiq we just.

Expanded to a lot of global jurisdictions with um occupational level benchmarks so you can see how your organization Compares in Slovenia right for women in management versus um the national Benchmark so that's available now huge Chris that's huge that's huge that was one of the things that when I was um before I came to CIO it was like.

This data set that I just always felt like I couldn't unlock which is we were able to use the EEOC and the Census Data to get pretty good idea of the benchmarks um for us employees but I hadn't seen a place where we're seeing kind of all of these or many many many countries that we had labor tool availability data for so now now that's.

Part of our opiq product so that you can actually calculate what uh what an aspirational Target would be based on that data for over a hundred countries um and that's part in the that's already now in the in the opq product so that's yeah exciting yeah we're really excited about it and uh and we use that data to calculate this that we're seeing here.

Which is the same math as we did for the US which is our women represented in management roles at the same rate as they're represented in the overall labor market in these countries and what we see in Europe is the same that we see in the US which is across all of these states uh be they EU member states or not um women are under represented in in.

Management leadership there are a couple countries where this isn't the case um Poland and uh Romania you can see on the map as having uh relatively small uh gender opportunity gaps where women are as equally represented in management as they are to the overall um but again across countries especially some of these ones that we tend to think about.

As being more Progressive with respect to women's rights such as the nordics and Germany um actually have quite large opportunity gaps so women are much less likely to be managers in those countries um as men uh and so the same thing appears in Europe I think this is why as you called out before there's some of these opportunity transparency reporting.

Requirements as part of the uh EU directive right um there's this requirement for organizations to track um and and post uh so it's it's both reporting and it's some processed stuff too right uh and Christine obviously you're you're the authority on that but what we see in the US is the same thing that we see in Europe which is.

Opportunity gaps exist these are one of the core drivers of the pay Gap and it's also something that's within a company's control one of the areas that we're seeing kind of a flurry of activity is around the P Global Pay reporting requirements so right now there are 28 countries with more jurisdictions um because places like in the US California.

And Illinois and U Minnesota for State contractors have pay reporting requirements um that layer on top um of the of those the um you what maybe do at the at the country level so there are 28 countries right now that have some type of pay reporting and as we look down the line this is going to be an area that we're going to see kind of.

Increasing opportunity as the EU equal pay and transparency directive goes into effect um in 2026 with the first report due on the 7th of June 2027 across all of Europe it's difficult to ex to underestimate how much of an impact I think this this will have on the world um as we're looking at pay and opportunity and I.

Think that if we look at Chris's slides the research that Chris did with the Bloomberg that the that laws do move the needle over time um and especially laws that are more C cumul cumulative in nature so not just requiring making suing people for pay gaps um but also things like of enabling people to talk about their pay or the pay transparency.

Laws um one of our colleagues Nancy romanish just has has said so to us so many times that it really just has completely changed the way that total rewards leaders focus on on pay Equity with these pay transparency laws and that's what we see coming with the EU um equal pay and transparency directive um that that's coming soon with the first.

Reporting in 2027 so on the next slide we can talk a little bit about kind of how big of a change this is so I mentioned before that there are 28 countries right now that require some kind of pay reporting so there are 15 um jurisdictions um outside of Europe so in the US we have Brazil Canada there's.

Also some requirements in in um individual provinces in Canada in Chile and in the US in um California and Illinois and state contractors in in Minnesota we also see pay reporting in countries that are not part of the European Union but that that do sit within Europe so that's Iceland and Norway and Switzerland and the UK and in.

Ukraine and then we have um more reporting requirements in countries outside of the US and Europe which where there's been outside of the US and the Americas where there's been more of a concentration so we have pay reporting requirements in Australia in India in Israel Japan Korea and South Africa so those ones are not.

Going to change those 15 that I just mentioned are not going to change at least immediately or at least directly because of the the EU directive but everything else 27 of the 42 countries with reporting requirements will be directly impacted by the new directive so there will be 14 countries that are all listed here that don't have pay.

Reporting obligations currently and those are places like you know bu Bulgaria and Croatia but also the Netherlands um and Poland where we don't have pay reporting obligations right now but they will as a result of the EU directive it will be a new requirement but then there's this other impact which is there's 13 countries.

That do have current reporting obligations but th but none of them have the exact same requirements as what's required by the EU directive and we put into the appendix more information about you know the ins and outs of exactly what's required by the EU directive we're happy to talk about it but we just had a lot to cover today and wanted to.

Make sure that we got got through all of that content um so when we look at this we're talking about over 64% of countries that have reporting requirements are going to be directly impacted by the EU directive um and I think that the press and the focus on that will be generated by this just really it's very difficult to.

Underestimate I think the the impact that this will have um and so I think what we're seeing is that employers are moving to an area that even if you took a more decentralized Approach to Global reporting historically that because of the fact that we're going to have 27 of the 42.

Kind of immediately impacted and because we're having just more and more obligations Brazil is like brand new to this list um with the first report due this year um there's requirements that are not that are changing and um there's many jurisdictions like New Zealand that are considering um changes to their reporting obligations we're just seeing.

This kind of snowballing effect as we see This Global cross-pollination of all of these different laws happening um all around the world this is also very concentrated in the first half of the year so the one of the reasons that we really wanted to talk today as we move right into in January is that the first half so H1 of.

The of the year is very heavy for pay reporting obligations so these just deal with the ones that are currently Avail that are currently required not even looking down the line at the requirements that are that are coming as a result of the EU directive but we have reporting in some country in every month between now and June and in many places.

There's m multiple countries that are due um each each um each month um some of these are required just once a year um and so if I'm looking at South Africa or Portugal or the UK or California where you only have to file that report once a year but many of them are actually more frequent so in Brazil for example the requirement that you submit.

Data to the to the government in Brazil and then the Brazilian um Ministry of Labor will prepare the pay Gap that must happen twice a year so the first time that it will happen um will be in February the data will be due in February and then in March the ministry of labor labor excuse me will publish the P reporting and then that will.

Happen again um that will happen again later in the year so it's it's happening more frequently similarly in Luxembourg you must share your um pay Gap um information with the with your staff delegation twice a year and Ukraine has quarterly reporting requirements um although impacted by by the.

War there are other countries that have less frequent um reporting obligations so Austria Finland Italy they require that you um report every other year um Canada is going to be the first report um is not due until September but you likely want to complete it by June so that you can get the feedback on the draft as required um and then that will.

Be something that only needs to be done done once every five years after that um and then there's different ones um we put on here on this list kind of the final deadline but some of them I did want to mention like Australia the report is due sometime between the 1st of April and the the 31st of May so we put it on May um but but some of these.

In Australia in Austria um Etc um are are can be can be filed even sooner and then there's this fact that we have rolling or employer specific deadlines it could be because it is based on your fiscal year like we see in Japan or in Norway um but it also could be because um there's not a specific deadline outlined um in or artic ated in the law.

Um but there but often you have to stay on the same Cadence um like in Sweden that you previously followed so those um rolling or employer specific deadlines are outlined at the bottom of this at the bottom of this draft um or the bottom of the slide the so I think that all we wanted to say in this part is that there's a lot to do on global.

Reporting and it's happening right now um because we have so many deadlines that happen at the first half of the Year interestingly like of all of those 28 countries that have reporting requirements there are just a handful like Denmark and Iceland and Ireland that have reporting obligations in the second half of the year although some of.

Them like Brazil and and and Ukraine that report more frequently than once a year will also be added to that list so a lot going on right now and we're hearing more and more from our customers um and from folks that are looking at cindia they're looking for more support in this space because it's really coming like a train um very very.

Quickly and added on top of that we're finding that employers are beginning um to think about how they're going to prepare for the EU directive so although the first report will not be due for any of those 27 member states with the new reporting requirements until the 7th of June 2027 people are starting now because.

There are really only two comp cycles and we're right in the middle of one of them to make adjustments to be prepared for the reporting that will come as part of the EU directive so again for our customers we're very happy to help you think through what is your approach and what is your process to um to looking at the reporting obligations so Chris um I.

Was going to turn this back over to you to talk through kind of how we can how we how can we address what we're what we're seeing down coming down the line yeah yeah great so asistin I think established really well there's so much happening this year in terms of there's a lot that's on your plate in terms of reporting if you're a global.

Organization uh that's already required and then you have this big thing in the future which is the transparency directive um so what should you do today right uh well first thing is make sure that you're up to date on your calendar of pay reporting obligations um we can help with that that's one of the things that we help our customers with as.

Christine mentioned so you want to make sure that you for every or country that you operate in where you meet the threshold requirement for reporting that you um ahead of the ball and that you know that you have that requirement and that you know what it looks like um so that there no surprises or Miss deadlines uh for those reports and one.

Thing go ahead please oh no no I just going to say that one thing that um that we get asked to do a lot is to to help employers figure out there's different thresold so some of them kick in if you only have 10 employees in the country but others like Israel kick in if you have 58 employees that or Japan at 301 employees they're they're all very.

Different in terms of the reporting threshold and so one of the things that we would be happy for anyone on this call to to help with is to if you want to um send your CSM or reach out to Chris or to me um or to anyone else that you're working with at CIO if you want to know how where you have reporting.

Obligations based on your headcount in each country if you share with us your headcount in each country just we just need country name in the headcount for some of them it's also broken down by legal entity um we are happy to put together for you a um a list of here's where you have reporting obligations this is what reporting obligations are.

This is when they're due this is when you can begin to um to prepare for those so definitely lean on us if that would be helpful at all to help um figure out where you have reporting obligations often this is so decentralized that we find that um at the more um for the total rewards leaders or Talent leaders they may not actually or chro they may.

Not know exactly where they have those reporting obligations so happy to help with that if that's of use to anyone definitely reach out to us or reach out to um to anyone else that you're working with at at CDO yeah yeah I think that brings up such a good point um Christine when you think about how decentralized.

Organizations can be and if we think about you know reporting requirements is living maybe within legal or compliance and that may not be tightly aligned with Total Rewards right so the second thing that we have is uh you know evaluate or prepare or verbalize uh your Global P reporting strategy um and if you wouldn't mind speaking.

Just a little bit about that like how can organizations think about how they um not only comply but also get a handle on these statistics and understand what they say about their organization and potentially respond right yeah so as we're thinking about there's some jurisdictions right now that these are already public so if we if we think of.

Countries like the UK or irand or Japan or Israel others as well um those are were kind of we've built a little bit of the muscle around the fact that those are public but when we imagine the fact that we're going to have 27 member states most of Europe all reporting on a single day and also as we look in the US that it's very likely that we're going.

To see reporting happening in the US um sometime this year um the EEOC has all but said that the that some type of pay reporting is coming is coming back and also seeing more States like Massachusetts and others um evaluating um additional reporting requirements in the US that we're finding that employers are wanting to make sure that they're.

Aligned in ter of in terms of what their strategies look like um and it requires not just calculating their gaps although that's really a critical part and part that we help with on on um CIO Global Pay reports but also understanding kind of like what it means so where do we have pay gaps where do we have opportunity gaps and we're finding that.

Employers that have the full CIO platform so both opq and PQ they're they're leaning on that pretty heavily to to figure out what what they're seeing in terms of their um of what their gaps look like yeah absolutely so I think that it's just that get the ability to understand kind of where you have your G where you have your.

Reporting what are you going to do for reporting how it's going to align to the way that you're um that you are doing your p equity analyses and your opportunity Equity analyses to have those be coordinated strategies it's just something that we're seeing um I think kind of an increasing need to do yeah yeah yeah yeah yeah and I think.

About especially as those things become public right you want to know what your plan is if an employee comes and says hey this is our pay Gap what are we doing about it what does that mean right yeah as an employer I don't think it's going to be enough to say like yeah we really should think about that right you want you want to have thought about it.

Right um which to the next Point yeah yeah I was just going to say that same thing that like I would just love to hear from a labor Economist perspective like on the how we're thinking about groupings and how that's different as we think about the EU directive yeah yeah so so grouping employees is kind of a critical step in any workplace Equity.

Analysis right so one thing that's it's both a blessing and a curse of this unadjusted pay Gap is that it's it's a really blunt instrument right and so people are performing Works in totally different functions right and so we know that accountants get paid differently than uh HR managers or or you know janitorial staff or mechanics um and so.

There's always this component of like okay well how do we compare like for like and how do we determine you know what's a what's driving these different pay gaps and so grouping employees is an important step of that process uh you want to know what your analytical unit is what's your group that you're looking.

At um in the EU those requirements are going to be different than they have been in the US and a great place to start is Sweden if you're already used to Global reporting uh the groupings that we'll see required under the EU directive are similar to those groupings so it's both employees that are performing the same job um but.

It's also employees that are performing work of similar value or of equal value to the organization and it may be that you put those all into one big group and that's your analysis and it may be that you do two different analyses one for employees performing the same job and one for employees performing jobs of similar or equal value but you know it.

Depends on how companies transpose that and we'll learn more before the EU directive actually works out but in any case now is a good time to start thinking about those groupings for your organization in the EU and Performing those analyses uh which brings us into this last point of what can organizations do today to start.

Preparing what should you do first and this is really just getting a handle on your internal analytics and understanding the Dynamics of the employee life cycle from application to separation you know how are different communities fairing how are women fairing compared to men in the US how are people of color fairing compared to.

White workers or white applicants at your organization um because you want to understand if there are barriers where those barriers occur and how they're driving the pay Gap at your at your organization um and this is going to allow you to create tailored interventions that may help right so we.

Think about like okay well if you're getting you know black applicants to your organization but none of them are making it to hire that's a really different issue than uh a big retention Gap or a difference in promotion rates uh or equal pay for equal work you know all of those things present um challenges to your organization they.

Just have really different interventions so the next thing is you want to get a handle on a holistic analytical framework that can help you identify where those gaps exist specific to your organization okay so talking a little bit about that in more detail this is just an illustration of the employee life cycle so we've got.

Recruiting right kind of the pre-employment process where applicants learn about your company and they apply and then they go through this recruiting funnel um and there may be inequities that exist there right in the US there's kind of a long history of laws that um address this recruiting funnel and hiring differences and it's unlawful all.

To uh discriminate in this process and so you want to make sure that you're organ a and doing that um even if it's just statistical discrimination so if it's not you know outwardly uh gender or race-based behaviors um but just sort of a different rate at which people make it through these processes even though they're similarly qualified that's.

Something you'll want to know about so it goes from recruiting to hiring then you've got employee development things like um performance reviews and work assignment um and that that leads to things like promotions or the failure to promote an individual and that can impact retention so our retention rate similar um and then ultimately you know.

At some point employees are going to separate from your organization but you definitely want to know if you're losing women at a much higher rate than you're losing men or if you're losing women in leadership at a much higher rate than you're losing men in leadership um so what we want to do is we want to layer uh an analytical framework onto this.

Understanding of the employee life cycle and this can feel a little overwhelming uh certainly here to help this is why we built an entire platform that car that covers things from um representation gaps to pay gaps um to performance rating analysis to promotion gaps right but ultimately we want to put this analytical lens on your data at each.

Point in this employee life cycle and that will tell you okay at our organization what are the specific issues that we face um what I would say generally is that in the US and in Europe we know that there are differences at each of these stages right so there's reason to suspect that you may have an.

Issue at your organization but what we see with our customers is that's not always the case so uh even within an organization you may have a pay Equity issue within one department and you may have an issue in performance ratings in a different department but it behooves you especially as we're preparing for.

Increased transparency in reporting to know specifically what are the communities that are facing barriers where in the employee life cycle are they facing barriers at our organization and then what is our going to what is our response to those barriers going to be um and the easiest one obviously is pay Equity where if you know that.

There's a difference in pay rates between men and women you just pay women more who are performing similar work and are otherwise similarly qualified or similarly position to men in those roles some in some cases it's going to be a more holistic approach right so if you're failing to promote a particular Community uh you may think about okay.

Well what is it about our organization ation that's not giving the same opportunities here and how can we address that so ultimately what is this last step so you have a sense of kind of thinking back to that those four steps that we talked about you want to know what reporting requirements you have you want to know what um your plan is for.

Those requirements uh you want to think about your groupings and then you want to think about um ensuring employee Equity throughout the life cycle this slide here is a little different four different points but this is about how we at CIO can help with that as well um so first thing is ensure equal pay for equal work or work of equal value so.

Once you've got your employee groupings put together you want to conduct an analysis that says okay is pay similar between men and women or other communities within this job group um if it's not can we explain why it's not using neutral job related factors peq is really the leading software solution for that sort of analysis uh it's our.

Flagship product it's what we started with um next next is tracking and analyzing representation gaps and what's driving those repes representation gaps at your organization so is it about promotions uh Performance Management attrition retention Etc um our software yeah oh I was just gonna say and it's it's awesome because now we can look at.

We could always look at movement and promotions and and performance um from a with a global lens but but on the representation side having access to that ability to have the representation data not just in the US but in a hundred countries um around the globe I think is is going to be a way that employers can really get their arms around like what.

Is the reporting strategy what is it what's actually driving what they're seeing because they're going to be able to Benchmark themselves against against those against those metrics which I think is really critical yeah yeah and you know our our r view of those global benchmarks shows that there is there are big differences right.

So um you know that's what I guess your your sheet you're even you're seeing it in the U in Europe but it's probably even more so if we look at other jurisdictions outside of Europe as well that's interesting yeah yeah yeah so representation of women in management it's really different across the globe and you want to make sure that you have.

That piece of context when you're evaluating your own operations within those countries right and so opq can help with that as well um Global Pay reports Christine is is the expert on this um and we'll talk a little bit more about this later but uh we also help with uh Global Pay reporting for our customers as well um and then the last.

Bit that rounds out our Equity platform workplace Equity platform is payf finder this allows you to make sure that your pay decisions that you're making at the margin right so when we hire someone into a role or we promote someone or transfer someone that the pay is um makes sense right and that it's internally consistent they're going to.

Be paid similar to their peers and we're not introducing new biases into into our processes we see this with our customers too right where the the primary driver of pay gaps that you know weren't existing in a job group last year but have occurred here or that are occurring is those decisions that we make when new people are hired into the group or when.

Promotions are made um that's what causes pay gaps to appear in these different job groups and so payf finder is a solution that helps us get ahead of that and ensure that we're not um you know bailing water out of the boat as we have a hole that's putting water back into it right so we're getting ahead of it and addressing the root cause but.

Christina I'd love for you to talk a little bit more about Global Pay reports yeah perfect and then we really want to get to FAQ so definitely drop your questions we have um some already please but please continue to add any questions that you may have either to the chat or to the Q&A um with your name that would be great so CIO um supports on our.

Global Pay reporting side um we're a One-Stop shop for all of those GL Global reporting requirements we cover 29 jurisdictions um just the distinction between countries and then some countries have multiple um within their there in the in Europe in the US and then also around the globe um we um have three kind of key deliverables um with.

With that and a lot more to come I'm so excited about what's on our our road map with um CIO Global Pay reports um but we have kind of three key deliverables so we provide you an instruction and guide that really outlines how do we group employees and where do we when we have some questions in there that I'm going to get to in just a second about how do.

We know if we actually meet the threshold reporting um for that jurisdiction or what counts as a as a full pay relevant employee or do we include overtime or do we include bonus or do what do we do about um Equity um and the like we um we answer all of those questions in that instructions and guide so on the next slide we could just.

Hit to that really quickly and then we can take down the slides um but we have um the instructions and guide we have a really detailed data template that outlines exactly the data that we need um with definitions for each jurisdiction and then we provide um a report that calculates the um and delivers the key metrics and model.

Narratives and Communications advice um and we have that for each of the 29 jurisdictions so really um really excited about that um so without further Ado I was going to start hitting some of these questions um if that that was okay okay perfect so great question um which is how do we know if this is specific about California um but how do you know.

If you meet the employer size threshold so this employer crossed the employee threshold in October but their average headcount is below a 100 um and so are they do they have to file or do they not have to file um it's a great again this isn't legal advice but I'm I'm quoting very um but there's there's an FAQ that I can um drop in just a second that.

Outlines the answer to this very question um so the way that California calculates it is that if an employer has fewer than a 100 employees then um they are not required to file the um the report in California that said not all 100 employees have to be in California um so even if you had let's say that you're like an employer you're based in.

Illinois you have 500 employees but you have two employees that live in California um or you have Labor or you have um labor contractors in California you would still have to file the report um even if all of those employees are not in California um the way that the state of California has defined whether or not you meet that 100 employee.

Threshold I'll talk about Labor contractors separately is they look at it through two lenses and it's an or so if you're either or on these so if you had more than a hundred employees during the snapshot period so you look at a payroll period sometime between October and December if you had more than a hundred.

Employees during that snapshot period then you would have to file or if you have a hundred or more regularly employed employees during the reporting period so for the question asker because it has an or not an and at least according to the FAQs the state of California um is typically looking for employers to file to file if they either.

Employed them during that snapshot period or they had a 100 or more um regularly employed employers during that period um there's addition obligations if you have requisite number of Labor contractors um so if that that wasn't the question but just wanted to mention that um as well and I'll drop this FAQ into the into the chat here we.

Go here we go um and then I'll look at I don't I haven't looked at it to figure out exactly which number it is but oh here it is here it is here it is it's um it's in section 111 c um which employers are required to file the report um is is outlined there so that was a great question yeah one thing I I would just like to add that I think is.

Really interesting about these jurisdictional differences too is that we do see these spillover effects um like with Colorado and New York City and California right where the state has the requirement but it's also impacting how organizations that operate a little bit in those states or cities or jurisdictions um think about their.

Entire uh process right so we do see an increasing number of employers that are saying hey our approach is going to be that um whatever the strictest requirement is in the US we're just going to do that across the us and that gets us ahead of the ball in terms of jurisdiction that's going down the pike and then we don't have to worry too much.

About you know uh failing to comply with one State's requirements because we do it in all states already so yeah that's exactly right um there's also one quick question here uh that just is when is the California report that's a great question so it's due the second Wednesday of May so for this year it's due on May 8th um but it it changes so.

Last year it was due like May 10th I think but it so it it switches a little bit but for this next year for the reporting based on your 20123 year B um is going to be due on the 8th of May of 2023 and we're happy to help um with any of that as part of Global Pay reports that's definitely one of the jurisdictions that we support um and.

There's some really exciting things that were happening in product um as well as with respect to the California pay report we're very very excited about um so that was a really good question um I had another kind of direct question that came just to me um about the reporting um about the reporting in Brazil um about a couple of questions about that.

So the first question was do you have to actually calculate the metrics for the report filing in Brazil and the answer is no it was not clear at all in the act in the law but when the regulations and the ordinance came out um that that um that explained more about the reporting requirements it was very clear that you have to submit two things to um in in.

Brazil so you're already required to submit da data through esocial you'll continue to do that they're going to leverage the data that employers in Brazil file through esocial and then there's the new section um of the um Ministry of Labor that's just newly opened um that you'll submit additional data and that has to be done by February.

Um and then the ministry of labor is going to actually calculate the gaps um based on the da data that is submitted and then employers are going to have to publish that and so we are working with many employers that are um trying to get their arms around what we think those reporting requirements or what those calculations are going to look like it's.

A little bit of a guess because this is they're definitely building the plane and flying it um in in Brazil right now because this um the law was passed quite late into the year and the reporting is due quite early in the year um and so um but again happy to happy to help with that it's also one of the jics that we we cover um as part of cindal Global Pay.

Reports um great uh we had one more really excellent question about pay Equity analyses particularly in the U which is what do we see as best practice for which pay component to use the basis for pay Equity reviews base salary total cash compensation so Fix Play Pay Plus incentives or do we want to include benefits value and Equity value uh you.

Know fringe benefits um it's much harder data to collect yeah I love this question one thing one thing I'd say is that there's not a single way that's the there's like a legally required way to look at this and Christin I'll definitely allow you to speak up on that we have built flexibility into pay EQ because even if we see a pay Gap uh with.

Total cash compensation you might want to know well is that driven by differences in base pay or is it D driven by differences in uh cash incentives right um and so it's helpful to have the flexibility to look at it multiple ways that's built into pay EQ and then there's also the statutory and Reporting requirements as well so.

Christin I'll let you take that as a as a lawyer yeah absolutely yeah and it is um the definition of pay under the EU directive is very broad so it includes not only base pay but also all complimentary and variable components of pay um and so they listed as examples any benefits um in addition to your kind of.

Base salary benefits um cash whether or not it's in cash or in kind um and so it's quite quite Broad in terms of what is included um as the um as the requirement so they list things like bonus es overtime travel facilities housing and food allowances compensation for attending training payments in case of dismissal statutory sick pay.

Statutory required compensation and One requirement Michelle I don't know if you want to just pop open the um the slides and go to 24 for just a quick quick second but one of the requirements um this is in the appendix so you'll get it when the debt comes out um but one of the requirements is that not only are you calculating the overall mean and.

Median pay Gap but that you're also C calculating the mean and median pay Gap by each of those individual complimentary or variable components of pay so I think of it like a lot like Spain in that way that you're calculating the overall but also by all those individual components um of pay as well well well this is great and I'll.

Say that if uh you and the audience aren't convinced that Christine is the expert that you want on your side uh when you're approaching your Global Pay reports uh I I don't know what would convit you I think you're just it's so great to hear you talk about this Christine um and we are I think a little over time yeah okay well thank you thank.

You so much for all joining we really appreciate it and thanks for hanging with us and um we look forward to seeing you at our next webinar we're going to be go going into um more on reporting we have a sips and salaries coming up on Global Pay reporting so lots to come and really really thrilled to that we get to work with you um as as as you go through.

This journey thanks a lot thanks all see you bye

Sharing is caring!