Talent Management Excellence - August 2023

- Jeffrey Hayzlett, Chairman and CEO, C-Suite Network

Pay Equity: Empowering Equality In The Modern Workplace

Building a fair and engaged workforce

- Rameez Kaleem, Founder and Managing Director, 3R

Strategy

Top Picks 09 45 51

Building Equitable Pay Ranges In The Age Of Transparency

Fairness, compliance, and talent attraction through pay transparency

- Kyle Holm, VP, Total Rewards Advisory, Sequoia

Why Zuckerberg Is Wrong About Mid-Level Managers

‘The Great Flattening’ is a mistake

- Verity Creedy, VP of Product Management, DDI

59

Should You Put Your Performance Management System On A PIP?

Transforming organizational success through proactive strategies

- Doug Dennerline, CEO, Betterworks

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Pay Equity 2023: Progress, Gaps, and Strategies for Change

In2023, the journey toward pay equity stands at a pivotal moment, marked by both strides and persistent obstacles. While advancements have been achieved, disparities in compensation based on gender, race, and more still cast shadows on workplace parity. Examining today's state of pay equity while focusing on the path ahead underscores the need for a multifaceted strategy to realize true equality.

Recent progress and setbacks define the current landscape of pay equity. Government initiatives, corporate efforts, and advocacy have led to heightened awareness and policy adjustments. Transparent pay practices, diversity initiatives, and salary audits have contributed to bridging the gap for some. However, challenges persist, especially for marginalized communities facing compounded biases.

Gender-based pay disparities remain concerning, with women earning approximately, on an average, 82 cents for every dollar earned by men. This gap, though narrower, necessitates sustained attention. Advancing pay equity requires more focus on closing this gap, promoting women to leadership roles, and fostering family-friendly policies that empower women to excel without compromising their personal lives.

Pay equity's scope extends beyond gender disparities. Racial and ethnic imbalances are recognized contributors to income inequality. Addressing these disparities demands comprehensive reforms, encompassing fair recruitment, diverse leadership representation, and targeted education and training programs.

Amidst technological advancements and evolving work dynamics, opportunities and challenges emerge for pay equity. The rise of remote work and gig economies requires innovative strategies for fair compensation and benefits. Emerging technologies like artificial intelligence require cautious design to prevent biases from perpetuating.

The August edition of Talent Management Excellence includes insightful articles that focus on pay equity, performance management,

and innovative employee retention strategies, among others.

This edition also includes a research report, "The State of Pay Equity 2023-24," by the HR Research Institute that delves deeper into the current state of pay equity and offers suggestions for organizations seeking to foster greater equity in compensation.

The Cost Of (Pay) Discrimination In Corporate America by Jeffrey Hayzlett (C-Suite Network), explores the costly consequences of discrimination, citing Goldman Sachs' $215 million settlement for gender-based discrimination.

Pay Equity: Empowering Equality In The Modern Workplace by Rameez Kaleem (3R Strategy) underscores the shift towards pay equity and fairness.

Building Equitable Pay Ranges In The Age Of Transparency by Kyle Holm (Sequoia) discusses the need for pay transparency, urging the establishment of comprehensive pay ranges.

Betterworks’ Doug Dennerline in his article, Should You Put Your Performance Management System On A PIP? examines the limitations of Performance Improvement Plans (PIPs) and advocates proactive strategies.

In brief, the path to an equitable future demands a comprehensive approach addressing gender and racial disparities while adapting to evolving workplaces. True pay equity will arise from fostering collaboration, transparency, and education.

We hope you find the articles in this issue informative and helpful and, as always, we welcome your valuable feedback and suggestions.

Happy Reading!

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Excellence publications are my ‘go-to’ resource for contemporary and actionable information to improve leadership, engagement, results, and retention. Each edition offers rich and diverse perspectives for improving the employee experience and the workplace in general.

I regularly read and contribute to Leadership Excellence and Talent Management Excellence. I use many of the articles I read to augment my own presentations and I often share the articles with my clients. They are always quick, right on target for the latest issues in my field, and appreciated by my clients. If you want to stay up to date on the latest HR trends, choose a few of the different issues from the Excellence series of publications.

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The Cost Of (Pay) Discrimination In Corporate America

Lessons from Goldman Sachs

By Jeffrey Hayzlett, C-Suite Network

– a 20-year-old woman with a full-time job stands to lose over $407,000 over a 40-year career compared to her male counterparts.

The bottom line here is – as much as we try, pay equity might not be reached within MY lifetime. According to PwC’s Women in Work Index 2023, it would take more than a century to close the gender pay gap. That’s abysmal and it shouldn’t be happening in today’s business landscape. Sadly, it is.

Discriminationis a costly business. Just ask financial giant Goldman Sachs. Earlier this year it was announced that the company will pay $215 million to settle a class action suit claiming the bank discriminated against women in areas like pay, performance evaluations and promotions.

Pay equity remains a huge issue in corporate America. Women earned an average of 17 percent less than men in 2022 and still earn 82 cents for every dollar a man makes. The numbers are even more jarring when it comes to women of color – Black and Hispanic rural women make just 56 cents for every dollar made by white, non-Hispanic males. Here’s an eye-popping stat

Wall Street has had a reputation for being toxic in so many ways – from culture to discriminatory practices, to pay and gender inequity. Back in 1998, Smith Barney paid $150 million to settle a lawsuit claiming it tolerated a hostile work environment that included pay discrepancies and derogatory language towards women.

Goldman Sachs (and other Wall Street firms) has the funds to settle this lawsuit put forth by about 2,800 female associates and vice presidents in several divisions within the company. However, not everyone has the funds to settle and stay in business. There are plenty of lessons to learn from this scenario: if your people are your best asset, pay them! You must put actions behind your words; otherwise, you’re full of empty promises and it puts you at risk of losing valuable employees – which are your competitive advantage.

Sometimes in the haste to move the business forward, corporations forget to look within to see what needs to change and how they can be part of that change. Obviously, a giant like Goldman Sachs has a lot more to look at within the day-to-day operations, but they still missed the boat. The lesson here is never turning a blind eye to the great work output by your employees and to be more proactive when it comes to pay equity.

What can we do to become more aware, and help be the change?

First and foremost, we must establish transparent and standardized pay scales based solely on job responsibilities, skills, and experience, not gender or other demographics. This ensures that employees are compensated fairly for their contributions.

Another way to achieve pay equity is by promoting diversity and inclusion in leadership positions. Representation matters and when diverse voices are given a seat at the table, decisions are made with a broader perspective, leading to fairer compensation practices. It’s essential to establish diversity goals that foster an inclusive work environment and provide equal opportunities for career advancement.

Promoting pay transparency is a powerful tool in the fight against pay inequity. Encouraging open discussion about compensation, providing salary ranges for job postings, and conducting regular pay reviews can help identify (or rectify) any disparities that may exist. This serves a dual purpose: empowering employees to negotiate fair salaries while holding organizations accountable for pay equity.

Education also plays a role. Businesses must provide training programs and resources to employees and managers, promote an understanding of pay equity and its importance. This raises awareness and fosters a culture of equality, where everyone feels valued and is rewarded equitably for their hard work.

The state of pay equity is a call to action for leaders and organizations across all industries. It’s time to move beyond rhetoric and embrace tangible steps

to ensure fairness and balance our compensation practices. Closing the pay gap helps us all by driving innovation, collaboration, and business success.

Pay equity isn’t just a moral imperative organizations must address; it’s a strategic necessity. From Main Street to Wall Street, let us seize the opportunity to create a future where pay equity isn’t the exception, but the rule.

Hopefully, this lawsuit will set Goldman Sachs on the right path where no employee feels devalued (and demoralized) by the lack of compensation and advancement opportunities.

Doing the right thing shouldn’t cost millions of dollars.

Jeffrey Hayzlett  is a primetime television host of  C-Suite with  Jeffrey Hayzlett  and  Executive Perspectives  on  C-Suite TV , and business podcast host of  All Business with Jeffrey  Hayzlett  on  C-Suite Radio . He is a global business celebrity, speaker, best-selling author, and Chairman and CEO of  C-Suite Network , home of the world’s most trusted network of C-Suite leaders. Hayzlett is a well-traveled public speaker, former Fortune 100 CMO, and author of four best-selling business books: Think Big, Act Bigger: The Rewards of Being Relentless ,  Running the Gauntlet ,  The Mirror Test  and  The Hero Factor: How Great Leaders Transform Organizations and Create Winning Cultures .

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Pay Equity: Empowering Equality In The Modern Workplace

Building a fair and engaged workforce

By Rameez Kaleem, 3R Strategy

Gone are the days when high pay alone was enough to satisfy employees. The focus has shifted towards a more crucial aspect—ensuring fairness and equality. Pay equity, the principle of providing equal pay for equal work has emerged as a paramount concern for organizations.

However, pay equity doesn’t mean that everyone has to be on exactly the same salary. Instead, it is about clearly defining how we set pay in our organization and how pay progresses over time. This includes defining what we mean by ‘performance’, having regular conversations if we feel somebody is not performing well, and as much as possible, removing all forms of bias.

Employees are prioritizing pay equity like never before. They value the assurance that their contributions are acknowledged and rewarded

fairly, regardless of their gender, race, or other protected characteristics. Organizations that have recognized this shift in focus are reaping the benefits.

Prioritizing Pay Equity

Pay equity reporting is slowly becoming mandatory across the globe as a way to ensure organizations are prioritizing transparency. It has already become a requirement in a

number of US states, and the EU has also just introduced pay transparency laws.

These laws will require organizations to publish broad pay ranges and be more transparent with their employees. So, while there is a growing legal requirement for a focus on pay equity, there is an even more compelling case for employers to be proactive.

Employees Want Transparency

New research from Josh Bersin has discovered that well communicated pay equity is 13 times more important to employees than high levels of pay.

By having a greater focus on pay equity, organizations were more likely to:

Exceed financial targets

Fair pay practices can contribute to improved financial performance. When employees perceive that their pay is equitable, they are likely to be more motivated, engaged, and committed to their work. This can lead to higher productivity and more successful outcomes.

Exceed customer expectations

Employees who feel they are treated fairly are more likely to have higher job satisfaction, which can positively impact customer service. Satisfied and engaged employees tend to provide better customer experiences, leading to increased customer satisfaction and loyalty.

Create a sense of belonging

Pay equity fosters an inclusive work environment where all employees feel valued and respected. As a result, this culture can enhance employees’ sense of belonging and purpose at work.

Attract the talent they need

Fair pay practices demonstrate a commitment to treating employees fairly, which can amplify the organization’s reputation and make it an attractive choice for candidates.

Adapt positively to change

Organizations that prioritize pay equity tend to have a culture that values fairness and equality. This culture can foster a positive environment for change and adaptability, as employees feel supported and valued during times of stress and transformation.

Innovate effectively

When employees feel that their contributions are recognised and fairly rewarded, they are more likely to be motivated to generate new ideas and take risks. Fair pay practices can support an innovative mindset and enhance an organization’s ability to adapt and thrive in a competitive market.

Engage and retain employees

When you consider the points above, increased overall employee satisfaction and a positive work environment will lead to more committed, loyal and happy team members. This ultimately leads to higher levels of employee retention.

A Commitment to Fairness

In an era of growing awareness and empowerment, employees are beginning to resent secrecy and uncertainty around pay. They expect openness and fairness in the workplace, and organizations that embrace pay transparency will be better positioned to attract and retain top talent.

Employees want to know that their contributions are valued and that they have an equal opportunity for growth and advancement. When employees understand how pay decisions are made, they feel more valued and respected. This transparency cultivates a sense of trust between employees and management, improving collaboration and overall organizational performance.

Not only does prioritizing pay equity demonstrate an organization’s commitment to fairness, but allows them to reap the rewards of a more engaged and diverse workforce.

Gen Z employees are prioritizing transparency more than ever. As they continue to make up a greater percentage of the employee population, the emphasis on pay equity is only going to become more critical.

However, as the priorities and perceptions of every employee continue to evolve, organizations that adapt to these changing

expectations will undoubtedly stand out as employers of choice in an increasingly competitive landscape.

Recommended Resources

If you’d like to learn more about the state of pay equity and how to be more transparent in your organization, take a look at some more 3R Strategy resources below.

Whitepapers

● How to carry out an equal pay audit

● The path to pay transparency

Blogs

● Can Pay Transparency Lead to Pay Equity?

● Why Length of Service Shouldn’t Dictate Pay Progression

● 4 Problems With Asking About Salary History

Books

● A Case of The Mondays – How to build a culture of trust through pay transparency

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Rameez Kaleem is the Founder and Managing Director at 3R Strategy, an independent reward consultancy dedicated to helping organizations build a culture of trust through pay transparency. He is the author of A Case of the Mondays .

Danger Lurks - Talent Managers’ Battle Against Deceptive Job Seekers

4 main advantages of leveraging biometrics

By Lindsey Savarino, Aware

Dealing with cybersecurity threats is a constant challenge for talent managers; however, there is a new and particularly troubling trend that they need to be aware of. Last June, the FBI warned about a rise in fraudsters using stolen personal information and voice manipulation technology to apply for remote work and work-from-home jobs.

These cybercriminals relentlessly go after businesses for valuable information and often target IT and computer programming roles, as well as positions related to databases and software. These kinds of jobs give them access to customer information, financial data, and important company databases. Their goal is to deceive companies and steal sensitive information like login credentials and client data. This type of cybercrime has been called “Corporate Espionage 2.0” and it is becoming more common. Talent managers are at the forefront of this threat since many workplace interactions, including hiring and onboarding, are happening online.

The big question for talent managers is how to make sure that the people they hire are who they claim to be. It’s a challenge that requires careful attention, as talent managers play a vital role in mitigating these

risks. In this article, we will explore strategies and steps that talent managers can take to protect their organizations from fraudulent job applicants and prevent potential disasters.

It Starts with Onboarding

Cybercriminals are pretending to be someone they’re not to get hired and access data – that means talent managers must be strategic with their onboarding process to avoid this, especially when hiring for remote roles. An essential part of that process includes determining the authenticity of a new hire’s identity.

Biometric authentication technology offers unparalleled accuracy and integrity in verifying an individual’s identity. For example, with the use of a simple selfie image, this technology can indicate if an ID is authentic and if the person on the ID matches the person you’re attempting to hire. Unlike traditional methods that rely on knowledge-based authentication or possession of identification cards, biometric factors cannot be easily replicated or stolen. In this way, biometrics help significantly reduce the risk of identity fraud and ensure that talent managers are working with accurate employee information.

This can dramatically help talent managers have the confidence and peace of mind to know that they’re hiring the right people and that the margin for human error has been reduced. With the use of biometric verification at various points in the onboarding process, talent managers can ensure that only legitimate candidates gain access to sensitive company data. This proactive approach significantly reduces the risk of compromise, providing a secure foundation for the business to thrive without the fear of data breaches.

Benefits of Biometrics in Onboarding

In the rapidly evolving digital landscape, talent managers face the critical task of safeguarding sensitive employee and business data while also ensuring a seamless onboarding process. Biometric authentication technology has emerged as a powerful tool to address these challenges. And, once captured

for onboarding, biometrics can be leveraged for subsequent authentication needs. Let’s delve into the four main advantages of leveraging biometrics:

1. Protecting Employees from Cyber Criminals: In the era of Corporate Espionage 2.0, cyber criminals relentlessly target personal employee data to gain unauthorized access and exploit sensitive information. Talent managers who integrate advanced biometric authentication technology into their onboarding process can establish a strong line of defense against these malicious activities. By leveraging biometric factors such as fingerprints, facial recognition, or iris scans, talent managers can feel confident about the identity of new hires. This ensures that potential threats are identified, and current employees’ data remains protected from compromise.

2. Safeguarding Business Information: Fraudsters not only focus on attempting to access personal employee data but also aim for sensitive business information. By adopting accurate and trustworthy biometric authentication technology in their onboarding process, talent managers can significantly reduce the risk of unauthorized access to this crucial data. Biometric factors, being unique and difficult to forge, provide a powerful layer of security. Through secure biometric authentication methods, talent managers can ensure that only authorized personnel gain access to sensitive company information, mitigating the potential damage caused by fraudulent activities.

3. Building Trust in the Digital Age: In today’s digital landscape, individuals are increasingly concerned about the security and privacy of their personal data. By implementing biometric authentication technology, talent managers send a strong message to new hires that their employer takes data security seriously. This proactive approach to protecting personal information instills confidence and trust in employees from the moment they join the organization. Knowing that their personal data is in good hands, new hires can focus on their work without unnecessary worries about data breaches or identity theft.

4. Compliance with Data Protection Regulations: The implementation of biometric authentication technology aligns with the increasing focus on data protection regulations worldwide. Talent managers have a responsibility to comply with stringent regulations such as the General Data Protection Regulation (GDPR) and new state laws like the California Consumer Privacy Act (CCPA). By adopting biometric authentication systems, talent managers can demonstrate their commitment to meeting these regulatory requirements. Biometric data, when handled securely and with proper consent, can contribute to a compliant and transparent talent management process.

By implementing robust biometric authentication systems, talent managers can protect employees, safeguard their businesses, build trust among their team, and meet compliance mandates. Embracing these advantages not only addresses the pressing security challenges talent leaders are increasingly facing but also sets the stage for a seamless and successful onboarding journey. Everyone (but the cybercriminals) wins when you prioritize security, and biometric authentication technology is a powerful tool that helps enable talent managers to contribute to that.

In the digital era, talent managers face the dual challenge of protecting employees and the business, while also ensuring an efficient onboarding process. Biometric authentication technology emerges as a powerful solution to address these concerns from a talent management perspective. By implementing reliable biometric authentication systems, talent managers can safeguard their team from cyber threats and achieve their onboarding goals. As you reflect upon your organization’s onboarding process, consider this: How can incorporating biometrics revolutionize your approach to identity verification and elevate the security of your onboarding experience?

Lindsey Savarino is Senior Director of Human Resources at Aware

Pay Equity 2023-24

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By Jean Roque, President and CEO

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The HR Research Institute, powered by HR.com, the world’s largest social network for Human Resources professionals, is a key part of our mandate to inform and educate today’s HR professionals. Over the past three years, the HR Research Institute has produced more than 85 exclusive primary research and state of the industry reports, along with corresponding infographics in many cases, based on the surveys of thousands of HR professionals. Each research report highlights current HR trends, benchmarks, and industry best practices. HR Research Institute Reports and Infographics are available online, and always free,

The State of Pay Equity 2023-24

Ensure pay equity to maximize organizational performance

Pay equity has been a critical but too-often taboo topic for years now. However, social and legislative changes in 2023 have brought the topic front and center for many organizations.

With recent legislation around pay transparency, the issue of pay equity has become a business imperative. For many organizations doing business in the U.S. pay equity is not just the “right thing to do” anymore. Not complying with regulations could have serious implications. From compensating affected employees for the deprived wages (plus interest and litigation costs) to being charged with a misdemeanor, consequences of non-compliance could lead to loss of money, time, and brand image. Equitable pay, on the other hand, is often associated with higher productivity and reduced turnover.

In this era of a shift towards greater pay equity and transparency, this HR Research Institute research study delves deeper into the state of pay equity today.

Key Findings

1. A majority (7 in 10) rate their organizations as mediocre or below in the area of pay equity but the same proportion believe their organization will become more equitable over the next two years.

2. Pay equity is an organizational priority of varying importance in almost 8 in 10 organizations.

3. A majority of organizations struggle with pay transparency and just two-fifths post salary ranges in all job postings

4. External market analysis is the most popular method for developing salary Ranges.

5. Just half the organizations actively leverage data to improve pay equity and largely rely on a couple of demographics and job-related factors for analysis.

6. While organizations employ several techniques to ensure pay equity, under half are looking to close pay gaps at all levels.

Exclusive Study By The HR Research Institute

Reality of Pay Equity Today

To gauge the effectiveness of pay equity in organizations, respondents were asked to rate

their organization’s pay equity on a scale of 1 to 10. Almost half (47%) rate their organization 6 or below in the area of pay equity. Another one-fifth (22%) rate their organization 7 on a 10-point scale.

7 in 10 respondents rate their organizations 7 or below in terms of pay equity.

On a scale of 1 to 10, how would you rate your organization in the area of pay equity?

More equitable organizations

8 to 31% 22% 47%

1

10

Less equitable organizations

More equitable organizations are likely to be at a higher level of development when it comes to pay equity compared to less equitable organizations. More than a fifth of more equitable organizations are at the expert level of pay equity compared to none of the less equitable organizations. More equitable organizations are also more than 20 times more likely to be at the advanced level than less equitable organizations (44% vs. 2%).

Almost a quarter of respondents (23%) believe pay equity is not viewed as an organizational priority. Over two-fifths say it is one of many competing priorities but not near the top. Encouragingly, in over a third of organizations, it is among the top five priorities (27%) or it is the top priority (7%).

Are organizations looking to close pay gaps across the board or are they focused on specific employee levels? About three-fourths (74%) focus on closing

pay gaps for individual contributors and about the same proportion (72%) look to close gaps at the management, VP, and Director levels. Pay gaps at higher levels may be more visible and can be a source of contention if publicized.

On which types of jobs is your organization focusing in order to close pay gaps? (select all that apply)

Current State of Pay Transparency

Two-thirds of respondents believe their organizations are average or below when it comes to pay transparency. Just over one-tenth believe they are excellent (12%) and another one-fifth believe their organizations are above average (22%).

What causes most organizations to struggle with pay transparency?

In addition to concerns about lowering morale and productivity among underpaid employees, organizations may resort to weakening performance-based incentives since they are often

harder to justify than parameters such as seniority. This can bring down the overall performance of the organization.

How would you rate your organization in the area of pay transparency?

Editor ’s Note: In the original data, 4% of respondents stated that they “don’t know.” We removed those responses and recalculated, so this only shows percentages for those who answered the question.

One-third of respondents believe their organizations are below average or poor in pay transparency.

Respondents who said their organizations post salary ranges, were asked to elaborate on how these salary ranges are developed. When developing salary ranges, the primary concern for most organizations seems to be if they are paying competitively compared to market ranges. 7 in 10 organizations engage in external market analysis to determine salary ranges. Over half also utilize internal reviews (56%) and internal market analysis (48%). This helps ensure internal equity within the organization.

What factors influence pay decisions during hiring?

Primarily, organizations rely on the compensation levels of others holding the same job within the organization (69%) and years of relevant experience (68%).

Organizations’ Approaches and Actions Toward Pay Equity

When asked about specific practices related to resolving pay equity issues in organizations, the most common practice seems to be to take specific actions to close pay gaps if inequities are found. While 8 in 10 organizations claim to do this, it is remarkable that 20% of organizations take no action to close pay gaps even when inequities are found. With growing legislation surrounding this issue and the risk of potential lawsuits, this seems to be a risky stance to take. This could perhaps be linked to the low proportion of respondents (28%) saying there is a formal budget allocated to closing pay gaps.

Next is the issue of what is done with the information from pay equity analysis. Two-thirds (65%) of organizations have plans to achieve sustainable pay equity. However, just over half (53%) utilize pay equity information to modify recruitment policies and practices.

What specific actions do organizations take to achieve pay equity?

7 in 10 organizations look to solve the problem at the source i.e., by making hiring offers based on factors other than past salary history. This is unlikely to perpetuate already existing pay inequities in the market. Almost the same proportion (68%) look to increase salaries for underpaid employees. About half (49%) look to solve pay inequities resulting from lack of representation by increasing hiring from a diverse applicant pool and almost half (47%) aim to achieve pay equity by ensuring pay transparency.

Just 6 in 10 respondents replied affirmatively that their organization has strategies in place to detect pay equity gaps and less than half (48%) sets goals to actively investigate and solve inequalities within the workplace.

Geographic Pay Differentials For Remote Employees

Jean Roque, Trüpp

The trend toward remote work is not new but was dramatically accelerated in 2020 as organizations pivoted to adapt to the pandemic. Because many organizations saw positive outcomes, we now see businesses embracing remote workers as a new or expanded workforce strategy. While beneficial, this change has presented new challenges, particularly when accommodating variations in pay rates resulting from a workforce being distributed across multiple states. This variation in pay rate for employees in different regions is sometimes referred to as a geographic pay differential.

Savvy employers are reviewing their compensation plans to account for regional pay differences that will best align with their organization’s business framework and compensation strategy. Many businesses did not have the luxury of defining a distributed workforce compensation strategy before pivoting to a remote workforce. Even those that did likely need to make updates to accommodate the demands of the current job market and the

distributed talent pool brought about by remote positions that can be filled across the nation.

The importance of a well-defined compensation strategy

Before diving into geographic pay differentials, it is important to note that establishing a compensation strategy is valuable for organizations that adopt a distributed workforce business model. Once in place, a compensation strategy provides predictability for forecasting and budgeting, aids in attracting and retaining top talent, and reinforces fair pay practices within your organization. Having a well-defined compensation plan and applying it consistently across the organization is key to avoiding pay equity concerns, inconsistent pay decisions, and uncomfortable conversations when determining employee pay. For example, managers can easily justify pay decisions by referring to the defined compensation strategy when answering employee questions about pay practices or requests for out-of-cycle raises.

Download our free compensation planning guide.

Why consider geographic pay differentials in your compensation strategy?

Organizations that don’t have a strategy in place that adjusts for regional differences in pay run the risk of budgeting inefficiently for salaries. It is easy to overspend in an area where the cost of living or the average pay and demand for a position is lower. On the other hand, high-demand or specialty positions will require more competitive pay in some regions. Exceptional candidates are likely to turn down positions that pay less than is customary in their location, narrowing the candidate pool to less qualified applicants.

Aside from the budgetary considerations, there is a greater risk of losing employees if pay is not set strategically to attract and retain top talent. The cost of hiring and onboarding new employees

far exceeds the cost of maintaining a qualified workforce. Ultimately, employees who feel fairly compensated tend to be more engaged and have greater longevity, while subjective and unsupported compensation decisions result in frustration and higher employee turnover.

What are the options for distributed workforce pay practices?

There is no one-size-fits-all solution for addressing pay differentials across geographic regions. Your compensation team should consider factors such as the size of your workforce, how many and where your current employees are distributed, the number of similar positions in your organization, national vs. regional competition for talent, the regions that candidates you are looking for tend to be located, and the level of specialization required for the position.

There are several models for addressing regional pay differentials; this article will discuss three practical approaches.

Standard Pay Rates

A standard pay rate is based on the national average, the location of the organization’s headquarters, or some other polarizing factor. Employee compensation is based on the same rate without adjustments. While employers who adopt this model enjoy a less complex pay strategy, it can negatively impact hiring for talent that is in high demand or located in a more expensive location, such as San Francisco or New York City. The Standard Pay Rate Model is ideal for smaller companies that draw most of their employees locally or for organizations with positions whose pay rates have little fluctuation nationally or attract adequate candidates from areas with a moderate cost of living.

Regional Pay Differentials

The Regional Pay Differential model bases pay decisions entirely on where an employee is located and the average pay rate in that area. Pay rates are generally established by the cost of labor or cost of living in the city or metropolitan area where the employee is located or, in some cases, by a larger geographic region such as the Silicon Valley or the Research Triangle. While this model accommodates greater precision, it presents challenges because it requires research each time you extend a job offer for a new region. In a highly competitive labor market, this time can result in losing desirable candidates late in the recruiting cycle. The Regional Differential Model is ideal for small businesses, organizations hiring for highly specialized positions in a specific department, and organizations with

multiple locations or with employees that need to be based in specific geographic locations.

Geographic Pay Zones

The Geographic Pay Zone Model begins with a standard pay rate and then establishes categories, or geo zones, with a predetermined adjustment for higher or lower markets. Various cities and regions which may or may not be contiguous are assigned to a geo zone. For example, an organization may use the national average to determine the pay range for a UX designer; however, if an employee is in a higher cost market like San Francisco, which has been assigned to a +10% Geo Zone, their pay rate will be adjusted accordingly. The Geographic Pay Zone Model is ideal for larger organizations, entirely remote companies, businesses with many employees in high-demand positions, or employees located in many different locations.

How do you determine what’s suitable for your organization?

An organization should select the method bestaligned for recruiting and retention goals, available resources for researching and establishing pay practices, and the demand for similar employees in other markets. If employers are hiring for positions in high demand, those candidates will expect more competitive pay. Likewise, employees in high-demand positions might be tempted to leave if they can get better pay from another company. Positions in high demand or that require specific skills are best suited to the Geographic Pay Zone and Regional Pay Differential options, enabling organizations to offer higher pay. Positions that are easy to fill regardless of the location are ideal for a standard or national pay rate.

Once an option is selected, ensure it is clearly outlined in your compensation strategy and detailed in your pay practices. Establish and maintain a compensation structure that considers overall wage distribution and job levels. Keep in mind, once a structure is established, it is crucial to continuously review and update it to reflect changes in the market and your organization.

Here are additional compensation planning resources you may find helpful:

● The importance of a compensation strategy to your business

● Factors that contribute to base pay

● A primer on pay equity and pay transparency

● Free compensation planning guide

Jean Roque is the President and CEO of Trüpp, a human resources company that provides HR consulting services, HR outsourcing, compensation, and online training solutions. Jean has a passion for contributing to and furthering the success of growing organizations. Her straightforward yet strategic approach focuses on delivering HR services tailored to each organization’s unique needs, risks, and business objectives while removing the complexity often associated with the HR function.

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Why a Pay Equity Strategy Is a Prerequisite for a Competitive Organization

Patrick McNiel, Ph.D., Affirmity

Equitable compensation is a topic that has long had the power to prompt a wider public debate. It’s far from the sole preserve of compensation managers and HR professionals— it’s frequently headline news in every domain of modern life. From sports, to film, to tech, to financial services, and beyond, along both gender, race, and other demographic lines, both individually and simultaneously.

Through the years, pay inequity has been variously described as “unconscionable” and “shocking”—and for good reason.

The basic differences between what men and women are paid are stark. According to census bureau data, the average woman earns 82 cents to the dollar of what a man earns, Black women earn 63 cents for every dollar a white man earns, and Hispanic or Latina women earn 58 cents. Over the course of a 40-year career, the National Women’s Law Center estimates that the average woman working full time, year-round stands to lose around $400,000 when compared to her male counterparts.

“Shocking” is right!

Pay Equity Law Is Catching Up—So Don’t Let It Catch You

Interest in pay equity isn’t simply a media matter, however. This scrutiny is increasingly translating into a legislative push on a global scale.

As of April 2023, 21 states and 22 local governments have enacted legislation that bars employers from requesting information about an applicant’s pay history.

Individual states are starting to pass employee pay data reporting laws, with bills passed in California and Illinois.

The EEOC appears to be considering the reintroduction of EEO-1 Component 2. This would once again place the burden of finer-detail pay reporting on all private employers with over 100 employees.

New state and local pay transparency laws specifically targeting salary disclosure in job listings have prompted an increase in the number of US job postings that include salary information, from 18.4% in February 2020 to 43.7% in February 2023.

The European Union has issued a pay transparency directive requiring EU companies with over 250 employees to share information about how much they pay women and men for work of equal value. An equivalent law also exists in the United Kingdom

All this attention, legislative or otherwise, heightens the possibility of lawsuits and collective action for organizations that have fallen out of step with the law. And as new laws come into effect, those organizations that already run a tight ship with regard to gender and race pay equity will have a distinct advantage—increasing the pressure for all companies.

The Business Benefits of Equitable Pay

With legal frameworks closing in on inequitable pay, the threat of potential fines, negative press, and lost contracts will already be enough to steer many businesses toward fairer practices. However, pay equity makes good business sense in a myriad of other ways too.

A recent Josh Bersin Company report found that fair and equitable rewards were the fifth most important driver of good employee experience, innovation, and overall business performance. This was found to be vastly more important than even having above-average compensation and benefits, which was found to be the 75th most important driver.

show that 79% of employees want some form of pay transparency. Alongside the fact that 85% of Gen Z employees are comfortable with discussing pay at work, it seems almost guaranteed that the best talent will increasingly favor organizations that list salary ranges and report on how fairly their people are compensated.

What Can Organizations Do to Begin Creating a Pay Equity Strategy?

How can you ensure that the right rewards are going to the right people? Well, there’s no quick fix. Not only does executing a pay equity strategy require a long-term plan, but it must be broadly compatible with your organizational values before you even begin. Furthermore, it’s an action that requires leadership from the top.

It’s a long journey, but it’s a necessary one. Here are three things you’ll need to do to get your company where it needs to be.

1) Start Conducting Pay Analyses During Reward Cycles

Transparent pay practices, meanwhile, have the potential to attract larger talent pools. Reports

The old adage goes “You can’t fix what you don’t measure”, and the same goes for pay equity. Organizations typically start by gathering and analyzing data on employee compensation and performance, but it’s especially important to conduct and correlate data during performance and/or compensation cycles. This is because waiting until after these processes are concluded will leave you unable to take steps to correct any adverse impact you uncover.

Your analysis shouldn’t be focused on base pay alone. You’ll need to also consider incentives, bonuses, and total compensation. Take a similarly multi-faceted approach when considering factors that may justify pay differentials for any given employee—not just performance ratings, but less bias-prone data points such as time in position, education, loss impact, and relevant experience.

Comparator or multiple regression analyses are the most appropriate pay equity study formats in this instance. They will help you identify where factors correlate with compensation, and help reveal the disparities you have in certain roles, departments, locations, or on a company-wide basis.

2) Eliminate Bias By Reviewing Your Hiring and Compensation Processes

A properly structured process requires documentation, consistency, and continual review. To achieve this, you’ll need to:

● Create job descriptions that are accurate and precisely written, while making an effort to clarify the delineation of similar-sounding roles

● Review the questions you ask in your application process

● Create a process for maintaining your market research records

● Review performance ratings, promotions, and other personnel decisions that influence pay

● Scrutinize pay and all of the aforementioned processes and factors on a continuous basis to ensure equity is maintained

3) Make Transparency and Trust Key Parts of Your Culture

Bringing a more rigid structure to your organization can have the side effect of giving it a more rigid mindset. Meanwhile, the sheer volume of employee data you’ll need to collect has the potential to become overwhelming.

The key is to not overthink things: talk to your HR team about the pay variables that employees value the most, and have them steer your documentation, data collection, and analysis with their expert insight.

Only by creating the kind of culture where these conversations are held regularly and with a degree of openness will you also create the probability that employees will share their concerns internally before they ever take them outside—to a federal agency, lawyer, or reporter.

The Time to Act Is Now!

The focus on pay equity transparency and correction isn’t going away, and the sooner you can get ahead of it the better. Building new processes and partnerships to tackle pay equity will help you mitigate the significant risks involved in non-

compliance—but it’ll also reinforce your brand and drive tangible business results.

Turn compliance with equitable pay into a competitive advantage with Affirmity—contact our team of experts today.

Patrick McNiel, Ph.D, is a principal business consultant for Affirmity. Dr. McNiel advises clients on issues related to workforce measurement and statistical analysis, diversity and inclusion, OFCCP and EEOC compliance, and pay equity. Dr. McNiel has over ten years of experience as a generalist in the field of Industrial and Organizational Psychology and has focused on employee selection and assessment for most of his career. He received his Ph.D. in I-O Psychology from the Georgia Institute of Technology.

Navigating Pay Transparency, Pay Data Reporting, and Pay Equity Regulations with Pay Equity Software

Robert S. Sheen, Trusaic

The world is entering a new era of pay transparency. Pay equity legislation is gaining momentum as a growing number of countries acknowledge the importance of equal pay. Complying with complex and varied regulations depends on your organization’s size, sector, and location.

In this article, we highlight pay data reporting trends, explain the benefits of pay equity and provide steps to ensure compliance and navigate pay transparency, pay data reporting, and pay equity regulations using pay equity software.

Closing the Gender Pay Gap

The gender pay gap in the US has hovered at around 18% for the past two decades. Like many countries, achieving pay parity has proved elusive, despite heightened awareness and increasing pay transparency legislation. Closing the gender pay gap can boost the world’s economy by about 7% — or $7 trillion, according to Moody’s Analytics, but at the current rate that will take another 132 years.

The EU Pay Transparency Directive, which must be transposed into law by 2026, is a gamechanger in pay equity reporting, which we believe will set the tone for future pay equity regulations. Now is the time for employers to embrace pay equity.

Pay Data Reporting Trends

In addition to the EU Directive, several trends are affecting pay equity:

Pay transparency: Pay transparency laws are becoming more widespread and far reaching. States including California and Colorado require employers to disclose salary ranges and pay scales to promote fair pay. Staying on top of pay equity legislation changes is vital for US employers.

Greater risk of non-compliance: Governments are increasing their efforts to enforce pay equity laws and implementing penalties for employers that do not comply.

Expanding protected classes: Legislation is being extended to include protections for race, age, and disability. In a groundbreaking move, the EU Pay Transparency Directive includes pay data reporting on non-binary people, incorporating gender-neutral language and an intersectional lens.

Expanded equal pay laws in Hawaii: On July 3rd, 2023, Hawaii governor Josh Green, signed into law SB 1057. Significantly, the bill will prohibit pay discrimination based on any protected category under Hawaii law, not just sex. Hawaii employees may now bring claims of discrimination in pay based on race, sex including gender identity or expression, sexual orientation, age, religion, color, ancestry, disability, marital status, arrest and court record, reproductive health decision, or domestic or sexual violence victim status. The law will come into effect on January 1st, 2024.

Responsible AI: The risk of AI bias in automated employment decision tools (AEDTs) is a growing concern. EEOC Title VII technical guidance issued in May 2023 is intended to prevent any form of bias that leads to discrimination against protected classes.

Understanding the benefits of pay equity

High performance organizations commit to pay equity as an essential component of their mission to create inclusive cultures. Research from Josh Bersin found that companies that prioritize pay equity are:

● 1.6 times more likely to meet or exceed financial targets

● 2.1 times more likely to attract the talent their business needs, and

● 1.7 times more likely to innovate effectively

Pay equity is more than an exercise in compliance. Below we outline the best practices in navigating pay data reporting and regulations with pay equity software.

Best Practices in Pay Equity

Conduct a pay equity audit: A pay equity audit is the most effective way to fully understand and identify pay disparities within your compensation structure. One way to do this is by using software like PayParity® which conducts a pay equity audit at the intersection of factors such as gender, race/ ethnicity, age, disability and more. The results of the audit identify areas for remediation and pay gaps within every employee group, and at every level in your organization.

ESG Reporting: ESG initiatives are essential to both financial performance and brand reputation. Nearly half of investors prioritize the social component of ESG in making investment decisions. Further, 96% of employees expect their employer to embrace sustainability. Pay equity is a key component of the ‘’S’’ in ESG.

Identify the root causes of pay inequity: Multiple issues can influence pay equity. For instance, certain groups of employees may not have equal access to jobs or promotions. Pay equity software can help employers identify factors such as unconscious bias, or processes that may be affecting, or causing, pay disparities.

Select equitable pay ranges: To comply with pay transparency laws, employers must choose fair and equitable pay ranges for all job listings. That involves integrating market data with the outcome of internal pay equity audits. A pay equity software solution like Salary Range FinderTM can help to determine competitive and fair salary ranges by overlaying internal pay equity audit data with that of external labor market data provided by LightcastTM. Fair salary ranges are determined by combining the two data points.

Include your employees in the conversation: If a pay equity audit suggests your organization has no pay equity issues, but your employees disagree, you have a perception gap. According to Gartner only one-third of employees believe their pay is equitable, and less than one-third believe they are

fairly compensated for their work. A good way to gain employee critical insights is to carry out an anonymous sentiment survey.

Monitor progress: If pay disparities by gender and/ or race are identified, pay equity audits will allow you to monitor those pay differences and progress toward closing the gender pay gap over time.

Set aside an appropriate budget: Research from Josh Bersin found that only 14% of organizations set aside a budget to mitigate pay inequities.

As global pay equity laws become more complex, investing in pay equity will be vital to ensure compliance, attract talent to your brand, and achieve a more sustainable ESG-centric organization.

Two Key Factors to Consider When Choosing Pay Equity Software

Pay equity software can help your organization to navigate changes in legislation, and comply with filing deadlines and pay data reporting across multiple jurisdictions and countries. In partnering with a pay equity software provider, however, two vital areas must be considered:

#1 Intersectionality in pay data audits: The EEOC states ‘’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.’’ Carrying out a pay equity audit without accounting for gender, race/ethnicity, and age, can lead to an incomplete and potentially inaccurate analysis that fails to address challenges for people within marginalized groups. For instance, only limited pay data is available on the LGBTQIA+ community. Intersectionality is essential to achieve 100% pay equity.

#2 Compliance with EEOC Title VII: EEOC Title VII Guidance issued in May 2023 makes it clear that employers cannot delegate responsibility for AI bias to their software vendor, nor rely on their vendor’s assurance that its software is Title VII compliant. EEOC guidance states that “in many cases”, an employer is responsible under Title VII for its use of algorithmic decision-making tools, even if those tools are designed or administered by a software vendor. Pay equity software providers must be able to answer key questions outlined in the guidance.

Make a Commitment to Pay Equity

A commitment to pay equity is about more than closing the gender pay gap. It makes a statement about your compensation philosophy and your commitment to a more inclusive workplace. As the stakes get higher, ensuring compliance with pay transparency legislation while navigating complex pay data reporting obligations, requires a solution you can trust.

Subscribe to our newsletter to stay ahead of trends and legislative changes in pay equity

Trusaic is GDPR compliant and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.

Robert S. Sheen is the CEO and Founder at Trusaic. An innovator and serial entrepreneur with an extensive background in law, finance, tax, and regulatory consulting, Robert founded First Capitol Consulting in 1999. A focus on data solutions and workplace equality laid the foundations for Trusaic’s expansion into pay equity. Under Robert’s leadership, Trusaic is committed to creating a better working world for all, by helping employers achieve pay parity, and shape inclusive cultures.

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Achieve Pay Equity

Building a Successful Compensation Strategy

Heather Bussing, California Employment Attorney

Acompensation strategy sets out the organization’s approach to pay and benefits. It has the guiding principles on compensation decisions and looks at pay in the context of the organization’s overall goals.

You want your compensation strategy to be consistent with the organization’s business strategy, the performance the organization wants to encourage, and of course, the budget.

Somewhere along the way, the word strategy became a buzzword to mean high-level and important considerations without much discussion of what you need and how to get there. It’s like having a camping strategy to spend the night outdoors without thinking about how to stay fed, warm and dry.

Creating a compensation strategy is thinking about how to meet the fundamental needs of the organization and the people who work there. It’s considering what the company wants to achieve in a certain timeframe, what it needs to get there, and how to find the resources and workers who can do it.

process that requires consideration of the work, the market, and predictions about what may happen. There are many ways to do it right and you and your organization’s leaders are the experts on what will work for you.

Why all organizations need a compensation strategy:

The difficulty is that every organization’s goals and needs are going to be different. It’s a custom fit

Labor costs are the biggest line item of most organizations’ budget. And having the right people doing the work is what makes a business successful. So, getting pay right is essential to operations, no matter what your industry or company size. Having a clear compensation strategy will also help you recruit and retain employees and make budget and planning easier and more straightforward.

Recruiting

Even if you are not planning on hiring soon, you may have people leave (or want someone to leave). When you are hiring for an unexpected opening, you want to understand who you need, where to find them, and what the going pay for the role is. For larger organizations that can predict their overall turnover, although not usually who will leave, having guiding principles for salary ranges, incentive pay, benefits, and other pay decisions make negotiations smoother and faster for everyone.

Retention

Pay raises are usually larger when people change jobs than if they stay for the annual cost-of-living adjustment and scheduled pay increase. While changing jobs involves many factors besides pay, being prepared to meet the market can be a key to keeping the people you have.

Budget and Planning

It’s much better to be able to plan for raises and handle budget for benefits when you know what you know your strategy for compensation in general, what’s going on in the market,

and have thought through your approach to staying competitive. Some organizations take a straightforward approach and address base pay. Others may not have budget for big raises but can compete with other benefits, like flexible schedules or remote work. The important thing is to have the information you need, know your priorities, and have the guiding principles in place.

Pay Equity

Pay equity is an important piece of compensation strategy. As you bring new people in at higher rates, it’s essential to track what’s happening overall with pay equity and whether any pay gaps can be justified for legitimate business reasons or whether there is a potential bias that can be correlated to gender, race, age, or other protected factors. Most pay equity issues are not intentional and can be difficult to spot. Monitoring pay equity will help you implement your compensation strategy and address any issues before they become bigger problems.

7 questions to ask for a successful compensation strategy: Here are the things to think through when you are building a compensation strategy.

What is your compensation philosophy?

Start with your compensation philosophy. Identify the principles and practices your organization uses to make compensation decisions.

● Do you generally make offers at the mid-point of the market rate for that role? Or is it usually higher or lower? Why?

● What are the important considerations for how you determine incentive pay and how do you allocate incentive and base pay?

● What consideration do benefits, leave, bonuses, and perks play into decisions on wages?

The focus should be on why you pay people what you pay and what factors are important in how your total compensation is structured.

Is your compensation philosophy working?

You can always do more of what you’ve been doing. But before you make that the default, it’s worth understanding whether it’s working. It’s good to have a clearer picture of some key indicators before you start making compensation decisions, Track your turnover by role. Are you seeing higher than normal attrition?

● Look at average tenure by role. Is it trending longer or shorter? Do you know why?

● Are there gender pay gaps or other pay equity issues? When was your last pay equity audit?

● What’s happening with employee engagement? Look deeper than the overall scores. Engagement data by department or demographic can reveal insights on where there are issues.

If you find potential issues, evaluate what role, if any, compensation is playing in employee satisfaction and turnover.

Are you monitoring compliance?

There are some aspects of compensation that are required by law and not optional. Understanding

and monitoring compliance with compensation laws should be an essential part of any compensation strategy.

● Have you met minimum wage, overtime, and payment requirements under local, state, and federal law for every location you have employees?

● Have you assessed pay equity and established a process to analyze and address any pay gaps?

● Are you up to date on new laws and changes regarding sick leave, parental leave, and other paid leave, pay transparency requirements, and other laws affecting compensation and payroll including laws on privacy and the transfer of data about employees.

Does your compensation align with business strategy?

This is where you look at where the organization wants to go and what resources are allocated to getting there.

● What are the measurable goals for the company?

● Do you have the people you need to get the work done?

● Is there budget available to make sure you can hire and retain the people you need for the work?

● If not, identify gaps and what it takes to close them.

If there is a significant mismatch between goals and compensation budget, then you need to adjust one or the other, or both.

Does your compensation align with the market?

This will tell you if your compensation budget is realistic and competitive.

● Are your current salary ranges competitive for your location and industry?

● In a rapidly shifting environment are you prepared to make adjustments?

● How do proposed changes affect pay equity?

How does employee performance fit into your compensation strategy?

There is a bit of a myth that if employees meet goals and perform at or above expectations, they should get a raise each year. That’s not always possible and often not how it works. There are many types of incentive pay designed to encourage certain performance besides annual raises or costof-living adjustments.

● Can you create bonuses tied to performance or meeting specific goals?

If your compensation is not competitive, you will need to figure out how to adjust budget, or headcount and get creative with benefits and other aspects of total compensation.

● Is your sales commission program effective?

● Do you have the right mix of base pay and incentive pay?

● Do you use vesting of stock options or other benefits to encourage retention?

How does total compensation fit into your strategy?

Money is not always the most important thing to people. Schedule, the ability to work remote, paid time off, signing bonuses, help with retirement savings or student loan payments can all change the equation for potential and existing employees.

● Do you know what matters most to your employees?

● What benefits are used the most?

● What else could you offer that might make a difference to people you want to recruit or retain?

While money is always an important factor, there are many other aspects of total compensation that can make your organization stand out against the competition. Know what they are and regularly reevaluate what’s possible.

Building a successful compensation strategy is about having the right information on your organization, the market, and the organization’s goals, then determining what’s working, what isn’t, and exploring options. It’s not just about money. It’s about budget, compliance, the competition for talent, and meeting employee needs and at least some wants. When you get your compensation strategy right from the start, monitoring progress and adjusting to change is much easier and effective.

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Heather Bussing is California employment attorney and editor of Salary.com’s Pay Equity and Compensation Law Review.

Building Equitable Pay Ranges In The Age Of Transparency

Fairness, compliance, and talent attraction through pay transparency

By Kyle Holm, Sequoia

Intoday’s evolving employment landscape, pay transparency is becoming increasingly important for businesses of all sizes. As more states implement pay transparency laws, companies are adapting to ensure they’re not only meeting legal requirements but also fostering a culture of fairness and equity by establishing pay ranges.

The Shift Towards Pay Transparency

The push for pay transparency has been driven by a combination of cultural shifts, and legal changes. Younger generations of workers expect transparency in pay, and more states have implemented pay transparency laws requiring employers to disclose compensation within job postings and/or when employees ask.

While some businesses may be adding pay ranges on a case-by-case basis, this ad hoc approach can lead to

inconsistencies and potential issues down the line. Instead, you should consider building pay ranges for all current and future roles, ensuring pay aligns with the market and your overall compensation philosophy. Companies that are set up with comprehensive and consistent pay ranges in response to the shift toward pay transparency will also be better positioned to attract and retain top talent.

Lay the Foundation for Sustainable Growth

By establishing pay ranges, you’re setting the stage for scalable and equitable growth. This approach helps you avoid the need for temporary fixes and backtracking later on. Having pay ranges clearly defined impacts companies in meaningful ways that include:

1. Compliance with pay transparency laws

By proactively building a pay philosophy and ensuring that your

salary ranges are consistent and compliant, you can avoid potential legal issues and fines associated with non-compliance.

2. Better-quality candidates

Job seekers are increasingly considering pay transparency when evaluating potential employers. By providing clear and competitive salary ranges, you can attract top talent to your organization.

3. Ease of scalability and forecasting

With well-defined pay ranges, you can reduce the workload on lean HR and recruiting teams who often must develop offers for each role on the spot or in reaction to negotiations. Those same pay ranges can be used by your finance team to help budget for future needs as your organization looks to scale.

4. Ensuring pay equity

Getting compensation right on day one is important for companies focused on pay equity. By using defined pay ranges and consistent guidelines to set compensation levels, you can reduce the biases that may come into play when setting compensation without guardrails.

Build Pay Ranges with Confidence

With compensation tools, you have the tools to build pay ranges that are informed by real-time market data, leveled for every job

in your org, and aligned to your compensation philosophy to keep pay competitive, equitable, and within budget.

As you begin building pay ranges, consider:

1. What pay transparency regulations are relevant to your company?

2. What’s the impact on your current employees?

3. What should pay ranges be for new roles?

4. How will you communicate ranges with consistency?

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Kyle Holm is VP of Total Rewards Advisory at Sequoia

Focusing Too Much On Performance Will Hold Your Team Back

Creating a growth mindset culture

By Eduardo Briceño, Mindset Works

Why are so many of us dedicating countless precious hours to our work or our hobbies, yet still not seeing substantial progress? Why do even superstar new hires progress so much slower than we know they’re capable of?

And why is it so difficult to build organizations that truly encourage and foster growth?

The answer is that most of us, even highly trained professionals, have never been taught how to continuously grow and improve over time. We have been taught that to get better at something, we simply need to work hard. Or we’ve come to believe that once we are good at something—or even great at something—that’s enough, we’re done.

Why work on something we already excel at? This has a devastating impact on our lives

and careers. The world is ever evolving. If we don’t commit to growing with it, we risk being left behind.

Just as playing as many chess games as possible is not a great strategy for getting better at the game, research shows that we don’t get better at selling insurance or giving presentations just by doing these things repeatedly—unless we also experiment, solicit feedback, reflect, and implement change.

When it comes to performing skillfully, we need to stop focusing on just getting things done. We need to adopt Learning Zone habits.

When Practice Doesn’t Even Make Better

When Melanie Brucks was a doctoral student at Stanford Graduate School of Business, she dove into the scientific literature

on creativity and found something surprising: There was almost no research on whether practice and repetition can lead to more creative breakthroughs. Most people simply assumed they did.

Brucks teamed up with her Stanford colleague Szu-chi Huang, a professor of marketing, to investigate whether “practice makes perfect” applied when it came to brainstorming. Their research question was straightforward: If people practice brainstorming every day, will they get better at it?

The answer was a resounding no. In fact, when they spent time brainstorming every day, they got worse.

Even more interesting, the subjects in their study thought they were improving. An independent panel of judges disagreed: The creativity of the ideas had decreased.

What was going on? If you think about it, Brucks and Huang asked participants to practice the activity by performing the activity.

But what we’re discovering is that when people “practice” anything by performing it—whether by setting up regular brainstorming sessions, playing lots of games of chess, or seeing lots of patients— they are not really practicing. What they’re really doing is performing— trying to do something as best they can. It might not look like performing when there’s no audience cheering you on or a manager evaluating you. It might not feel like performing when you’re engaging in creative work like brainstorming.

But your brain doesn’t know the difference. It’s still focusing on what it knows and trying to do the best it can. So, does practice make perfect?

No. In fact, perfect is one of those words I try very hard not to use because it implies there’s no more room for improvement, which is the definition of a fixed mindset. Perfection can be a direction to progress toward, but not a destination, because it’s unattainable.

But Brucks and Huang’s study illustrates that practice doesn’t even make better—if we “practice” by simply doing things as best we know.

True, effective practice looks very different: It involves focusing on specific subskills, trying something challenging, ensuring there are feedback loops to identify opportunities for improvement, making adjustments, and trying again. It’s about paying attention to what we haven’t mastered yet, grappling

with something we don’t yet understand or do well.

That’s what it means to be in the Learning Zone.

How might a team looking to develop their brainstorming skills deliberately engage in the Learning Zone? The team members might begin by testing strategies, and then assess whether those strategies lead to richer brainstorming sessions. Research shows we can improve brainstorming effectiveness by including people of diverse backgrounds who have cross-cultural competence. Other triedand-tested approaches include spending some time ideating in isolation before being influenced by others, focusing on quantity of ideas rather than quality, and playing games before brainstorming—having the team play a round of Wordle, for instance.

A team could easily devise a test by, say, having participants go for a brief walk in nature before their next brainstorming session and then assessing the quality of the discussion and ideas generated in the meeting.

My larger point here isn’t about just how to enhance brainstorming sessions, but how to bring effective learning strategies to everything we’d like to improve. That’s what’s required to overcome the performance paradox.

Remember: In the Learning Zone— when our goal is to improve—we must focus on what we haven’t yet mastered, which means we can’t expect to execute flawlessly. Whether it is brainstorming, facilitating meetings, answering customer support calls, designing airplanes, or doing anything else,

what we do in the Learning Zone is take on challenges, examine mistakes to learn from them, and determine what to adjust.

But what if you could integrate the two zones, so that you generate learning while performing what you need to accomplish? Is that even possible?

To answer that question, bring to mind your last grocery shopping trip. You were most likely juggling more than one goal: choosing your favorite foods, fielding requests from family members, staying within your budget, and maybe searching for ingredients to try out a new recipe.

I imagine you were able to toggle between the different goals pretty effortlessly, and maybe you weren’t even consciously aware of moving back and forth

between budgeting goals and snacking preferences. What if you could achieve that same elegant flow between learning and performance goals at any time?

In fact, you can. That’s what all effective teams and organizations do. It’s how people improve their skills by leaps and bounds while doing high quality work, and how companies become market leaders with sustainably higher growth and impact.

Working Harder Can Lead to Stagnation

Here’s the tricky part: Performing can lead to growth in the beginning stages of skill development. When we first try something new, performance alone can appear to take us from zero skill to the most basic level of proficiency. Say you’re grappling with stage fright because you’ve been asked to give a presentation—your first one. Even though technically you are performing by giving a talk in a room full of colleagues, you might also take note of areas to improve upon.

You make a joke during your presentation, which creates a positive atmosphere in the room, so you make sure to include one the next time. People ask you to go back to a previous slide, so you learn to check for understanding. A colleague gives you some useful feedback, and you realize that being onstage doesn’t have to be so scary. Your second and third presentations will surely be better than your first.

But after you become proficient, just going out onstage and speaking doesn’t increase your skill level anymore. You might get stuck in chronic performance, preparing less and less over time and starting to use the same methods and jokes repeatedly. Soon enough, you stop improving. Worse, you might find that your presentations feel stale to you and to your listeners. You’re doing

the same thing over and over, and that’s not enough to stay sharp.

That’s the performance paradox in action. If we continue to limit ourselves to the Performance Zone, even if we operate at a high level, our skills and effectiveness will surely stall, and often diminish, over time.

When our hard work leads to stagnation, we assume we’ve

gone as far as we can. Or we conclude that the way to succeed is by working longer hours. We start associating success with constant execution, when reality is a lot more freeing.

Regular engagement in the Learning Zone allows you to uncover and learn ways to work smarter, more efficiently, and more effectively. If you’re looking to improve your speaking skills, you might watch videos of skilled speakers and compare them to videos of yourself, read books on ways to enhance your techniques, work with a coach, test something new each time you present, and solicit feedback. While it’s tempting to stick to what you know—especially when you feel starved for time—engaging in the Learning Zone actually creates time as you learn how to improve our ability to prioritize, collaborate, and get more done in less time. This can be a playful and joyful process.

Eduardo Briceño is a global keynote speaker and facilitator who guides many of the world’s leading companies in developing cultures of learning and high performance. Earlier in his career, he was the co-founder and CEO of Mindset Works, the first company to offer growth mindset development services. Previously, he was a venture capital investor with the Sprout Group. His TED Talk, How to Get Better at the Things You Care About, and his prior TEDx Talk, The Power of Belief, have been viewed more than nine million times. He is a Pahara-Aspen Fellow, a member of the Aspen Institute’s Global Leadership Network, and an inductee in the Happiness Hall of Fame.

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Why Zuckerberg Is Wrong About Mid-Level Managers

By Verity Creedy, DDI

CEO Mark Zuckerberg recently went on record blasting mid-level managers, blaming them for rising operational costs at Meta. As part of the company’s plan to flatten the organization, Zuckerberg essentially issued mid-level managers an ultimatum: either “get back to making things” (i.e., find roles as individual contributors) or leave.

Meta

company growth when CEOs need to show cost-cutting measures to satisfy investors.

Mid-level Managers Under Attack

Zuckerberg’s stance is not unique, with many companies sacrificing mid-level management roles in their bid to cut costs and run leaner and more efficiently. The Great Flattening has also affected X (formerly Twitter), Google and FedEx, as CEOs assume that flatter is faster, middle managers just get in the way and their salaries could be better invested elsewhere. This perception is exacerbated during periods of stagnation or a downturn in

The widespread layoffs over the past year have been the final blow in the attack on middle managers that began during the pandemic. Over the past three years, CEOs have chronically undervalued middle managers, inadvertently putting them in tough positions without recognizing the impact it’s had on their psyche or the company.

In the era of constant accelerated change — of working environments and digital advancements — mid-level managers were forced to drive change and performance in increasingly ambiguous and invisible roles. They were trying to

translate high-level strategy into actionable results, yet upper-level managers often couldn’t directly see the impact they had on team morale and engagement. This took a tremendous toll, with this level of leadership feeling the most exhausted during the pandemic.

Whatever the change, practical or personal, middle managers are responsible for communicating these decisions down to their teams. They face pressures from both sides, bearing the brunt of complaints, anger and frustration from below and above. Recognizing their “middleman” status, mid-level managers already feel very vulnerable, and negotiating on behalf of their team puts them in a precarious position. It’s no surprise that by October of last year, a record 43% of middle managers reported feeling burned out.

‘The Great Flattening’ is a mistake

Why Middle Managers Deserve Investment

The bad news for Zuckerberg, Elon Musk and others is that cutting middle managers is a shortsighted approach that could hinder long-term performance, robbing their organizations of the vital role middle managers play in these four critical business functions:

● Driving task-to-strategy alignment. As connectors between company strategy and execution, middle managers are essential for helping teams see how their individual work ties to

overall business strategy and maintaining that alignment. They often remove barriers to execution that no one sees—such as navigating task dependencies or solving team communication challenges—and eliminating this connection can grind progress to a halt.

● Negotiating across the organization. Mid-level managers are master negotiators, managing up, down, and across the organization. They’re on the front lines driving change and giving

higher-level leaders insight into sentiment through trust-based relationships at every end of the spectrum.

● Driving culture. Because of their elevated position, the C-suite can easily become disconnected from their team, especially regarding inclusion and diversity. They might set targets but what that looks like in real life can be quite different. Middle managers are on the ground, bringing those targets and the culture to life through modeling and integrating behaviors into daily operations.

Why Zuckerberg Is Wrong About Mid-Level Managers

● Strengthening leadership pipeline. Middle managers play a crucial role in strengthening the leadership pipeline, which sets the organization up for future success. Data shows that when organizations have high-quality mid-level leadership, HR can fill 65% of critical open roles, compared with only 28% of roles in organizations with fair or poor middle managers.

Prioritizing Mid-Level Development

Instead of leaving middle managers out in the cold—or slashing them from the roster altogether—organizations should recognize the value they bring and give them the support and development they need to drive smoother operations and organizational excellence. But most have some work to do: only 1 in 4 HR leaders rate their mid-level leadership quality as very good or excellent, and fewer than one-third of HR leaders

rated the quality of their mid-level leadership programs as high or very high.

To get moving in the right direction, HR leaders should implement a two-pronged approach.

First, provide a highly personalized development program tailored to middle managers. The needs and challenges of mid-level managers are not the same as upper-level leaders, and onesize-fits-all development will not work. Instead, HR should focus on the specific needs of this audience, including how to translate company strategy into execution; how to lead global, diverse, and often distributed teams; developing interpersonal skills; how to navigate competing priorities, organizational politics, and limited resources; and how to build self-awareness, confidence, and trust.

Second, HR should provide resources to help middle

managers gain greater awareness of their leadership personality and better understand their personal impact. By discovering their own personality style, how to optimize their behavior, and how to leverage their strengths to engage teams and drive culture, mid-level managers can better navigate difficult scenarios and be the advocate of their teams’ needs, without sacrificing their own sanity and mental well-being in the process.

When HR teams support and develop middle managers in these two ways, their organization will see a dramatic impact. While flattening organizations may seem to executives like a way to “cut the fat,” it’s actually cutting the muscle. Middle managers are that muscle, driving the change and growth companies are craving. Equip these managers with the right resources and their organizations will adapt to changing market conditions faster than ever.

Verity Creed , the VP of Product Management at global leadership company DDI , is obsessed with building powerful development experiences for leaders. As a strategic thinker and partner, she has worked closely with many Fortune 500 companies to develop leaders at all levels.

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Unveiling Tech Layoffs’ Disproportionate Impact

DEIB strategies to ensure equitable retention

By Sienna J. Brown, PowerToFly

Tech companies went on a hiring spree during the pandemic, and now many — from startups to tech titans — are showing remorse, with huge layoffs making front-page news on a daily basis. Industry-quaking layoffs have always disproportionately affected underrepresented groups during tech industry downturns, and this seismic wave of cutbacks is no exception.

The Proof is in the Pink Slips

While it’s still too early to see these numbers reflected in official workplace statistics, early research backs up the theory. According to layoffs.fyi, an estimated 350,000 employees have been directly impacted by tech layoffs since 2022. Netflix emerged as a poster child for the jettisoning of marginalized employees when times get tough when the company laid off 150 full-time employees and several contractors last year. A Protocol report found that women, BIPOC, and LGBTQIA+ employees were

overwhelmingly among those who lost their jobs.

And while emblematic of the issue, Netflix is certainly not alone. Following the termination of 63% of women in engineering roles compared to 48% of men, female employees laid off at Twitter filed a class action lawsuit.

It is crucial to examine the broader dimensions of diversity beyond gender and acknowledge the potential effects on ethnicity, ability status, sexual orientation, and other identities in the workplace.

Firing Factors

A complex web of factors contributes to the higher vulnerability of underrepresented professionals during tech industry layoffs. The concentration of layoffs in non-technical roles, which are often occupied by a more diverse workforce, speaks to a deeper systemic issue in STEM education that is the foundation for technical roles.

Compounding the issue, systemic biases that exist within society and the workplace can perpetuate disparities during these challenging times, especially for those who already face multiple barriers. And although we made two steps forward worth of progress in diversifying tech workforces during the hiring boom, recent Harvard Business Review research shows we also took three steps back once the layoffs kicked off.

Many tech companies have implemented layoff strategies that consider the length of tenure as a determining factor for cutbacks. While this may seem like a fairly neutral approach, focusing on employees with shorter tenure and less seniority disproportionately affects workers of color, especially in organizations that have only recently emphasized diversity-oriented recruitment, increasing the likelihood of their dismissal. In a layoff policy following the last in, first out approach, these positions are more susceptible to elimination.

The gig economy is not immune to this phenomenon either. According to experts, contractors are frequently terminated before full-time employees, and a Pew Research study revealed that Black and Latinx workers are more inclined to work as freelancers compared to other racial and ethnic groups.

These experiences align with broader trends, such as the pandemic-driven exodus of women stepping away from their professional roles, which further exacerbates the impact on underrepresented groups, making it difficult to rebuild stability and foster a sense of belonging within the remaining workforce.

Leveling Layoff Disparities Through DEIB Lens

To avoid inequitable layoff practices, companies should include diversity, equity, inclusion, and belonging (DEIB) professionals in the decision-making process. Unfortunately, instead of involving DEIB professionals in decision-making, employers have cut DEIB roles at a higher rate than others, and while this may be a quick fix to budgetary concerns, it is shortsighted. Companies that prioritize DEIB are more likely to implement practices that decrease discrimination and increase workplace equity and inclusion, leading to retention and long-term dividends in cohesive company culture.

Tech companies can integrate specific DEIB initiatives and practices to mitigate the risk of layoffs for underrepresented groups. First and foremost, DEIB should be a top-of-mind priority throughout the organization, starting from the hiring process and continuing through onboarding and retention. By consistently applying non-discriminatory policies and practices throughout the process, companies can mitigate biases and foster a more inclusive work environment.

Additionally, equitable access to professional development opportunities is essential for fostering growth and advancement for employees from underrepresented backgrounds.

DEIB Benefits the Bottom Line and Beyond

Prioritizing DEIB goes beyond reducing the risk of layoffs; it positively impacts the overall success of tech companies. Diverse and inclusive workforces have been shown to be more productive, innovative, and better at decision-making. Moreover,

employees in such environments experience higher job satisfaction, increased commitment to the company, and enhanced overall well-being, according to a recent report from McKinsey. By prioritizing DEIB, companies can create a positive work culture that benefits both the organization and its employees.

Prioritizing DEIB in hiring and retention means maintaining a bias-free hiring and interviewing process, providing equitable opportunities for career development, and fostering psychologically safe spaces for employees to show up authentically. Investing in diversity and inclusion training, particularly for leadership, is crucial to address these challenges and create a more inclusive work environment.

As senior director of DEIB at a company that is laser-focused on engendering belonging in the workplace, I evangelize the importance of prioritizing DEIB during tech industry layoffs because it is the only way to maintain and advance hard-won progress across the workforce. Not to mention, it helps build psychological safety and advance retention efforts for remaining staff, and it equips companies with the tools to attract diverse talent when the time comes. By keeping DEIB at the forefront of decision-making processes, companies can ensure equitable and ethical outcomes.

Sienna J. Brown is the Senior Director of DEIB at PowerToFly, a diversity talent acquisition platform connecting underrepresented talent to great careers. Sienna is a globally recognized speaker with a mission to build a new wave of leadership focused on inclusion and intention in the workplace so that every individual has equal opportunity to reach their full potential in their personal and professional lives.

Should You Put Your Performance Management System On A PIP?

Transforming organizational success through proactive strategies

By Doug Dennerline, Betterworks

Ifyou’ve been involved in a performance improvement plan (PIP) at any time in your career, you know what a harrowing experience it can be. Whether you’re on the receiving end, the manager who initiated it, the leader overseeing it, or just an uncomfortable bystander — many people see a PIP as the corporate version of a slow-moving car crash.

What should be a last lifeline for an underperforming employee often causes more pain than it solves. As former Microsoft VP Chris Williams recently observed in a Yahoo! article, surviving a PIP is “much like a sign on your back that warns management that you might be a poor performer.”

In theory, PIPs are a chance to make positive change — for everyone. But in reality, the success rate of surviving a PIP is very low and stressful for all involved.

In many ways, PIPs are aiming in the wrong place. Rather than last-minute, half-hearted triage, organizations should be stepping up first and proactively addressing the environment that is producing failure. Yes, a PIP may be the result of a single employee’s failure — but just as often, it’s a symptom of organizational or managerial shortcomings.

Most employees don’t show up to work with a plan to underperform; they want to contribute and excel. If your organization generates PIPs regularly, you should consider it a red flag for your performance management system — or at the very least, an opportunity to look closer and try to understand where and who in the system is really failing.

Even the most constructive PIP can have a devastating psychological impact on an employee — and a catastrophic effect on their future with your company. It’s often seen as a ‘kiss of death’ —  an impending doom that dampens motivation. This is the polar opposite of its intended effect. Rather than promoting improvement, it singles out an individual for their shortcomings without necessarily addressing the root causes of the underperformance, many of which can lie within the organization or with the manager. It’s no wonder that many employees’ response to a PIP is to start circulating their resumes.

In reality, there are many reasons an employee might be falling short of expectations — and some of them have nothing to do with the worker. For example, organizational failures can create a hostile environment for employees, leading to underperformance. An organization may also be failing to convey its strategic business objectives effectively,

leaving employees unaware of the priorities and incapable of properly aligning. If strategic objectives in your organization are prone to shift without clear communication, employees may be left scrambling, leading to widespread confusion, decreased productivity, frustration, and sometimes apathy.

An absence of clear organizational goals linked to strategic objectives can make the problem worse. If employees cannot understand or see their work’s tangible impact on the organization’s overall goal, their motivation will wane. In highly-matrixed organizations, employees who lack visibility into cross-functional activities that impact teams and individuals will be stymied in accomplishing their goals effectively. A lack of transparency across the organization can also create an environment of uncertainty, where employees feel like leadership isn’t communicating well — or worse, isn’t holding themselves accountable to the same standards.

Managers are an important source of information and support for most employees — but they can also unknowingly contribute to employee underperformance. If managers aren’t making the time for regular and frequent conversations with direct reports to provide guidance, troubleshoot, and help clear bottlenecks, they may be inadvertently making it challenging for their direct reports to succeed. At the very least, they’re missing a chance for critical trustbuilding, goal tracking, and guidance that can all make or break performance.

Then there is the career side of the coin. Managers need to talk with employees not only about their day-to-day performance, but also about where they are headed. Failing to connect with employees around skills, career growth, and development opportunities can take its toll over time by demotivating people and making them feel stuck in their roles.

Without these conversations, managers risk coming across as unapproachable — which can create a barrier over time that leads to emotional disconnect and decreased productivity. According to RedThread Research, “connection” is pivotal for effective management. RedThread has suggested that managers need to

1. get comfortable with being transparent,

2. help identify tasks that drive goals,

3. help employees stay on track, and

4. remove barriers to work.

These are all things that occur naturally within an effective performance enablement process. You want to be sure your performance management system is addressing issues immediately or shortly after they are spotted, rather than being an annual look back and correction of what happened 6-12 months earlier.

When it works well, performance management is a continuous, lightweight process, fueled by ongoing conversations and check-ins. Employees should always know how they are performing — beyond an annual performance review — and be given the tools and resources to live up to expectations year-round.

Modern performance management empowers managers to coach their direct reports for both performance and career development effectively. The role of managers and leaders then becomes not

the issuing of PIPs after it is too late to make any real change, but rather to proactively eliminate the barriers that prevent employees from reaching their goals.

As highlighted by our recent Betterworks’ 2023 State of Performance Enablement report, managers agree that they need this support. They want help coaching for performance (41%), support with reviews, assessments, and ratings (40%), and the ability to coach for careers and skill development (38%). The reality is, not all managers are natural coaches, and they will need proper training and mentoring to guide their teams effectively.

All this means if your organization is generating a lot of PIPs, it’s time to take a hard look at your underlying performance management system. A shift in perspective may be necessary — moving from viewing underperforming employees as the sole problem to acknowledging bigger potential organizational and managerial shortcomings — and solving them.

By fostering a culture of continuous feedback and improvement, aligning strategic goals with clear performance metrics, and empowering managers to effectively coach their teams, organizations can create an environment where PIPs become a relic of the past. Remember, effective performance management isn’t about putting employees on trial — it’s about equipping them with the tools they need to succeed and grow.

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Doug Dennerline is the CEO of Betterworks . Before becoming CEO at Betterworks in 2018, Doug was the CEO of Alfresco and President of SuccessFactors. He spent 11 years at Cisco Systems, Inc. [CSCO], and 10 years at 3Com Corporation, and began his technology career as an HP sales representative in the San Francisco Bay Area.

Retention Or Regret: Why Stay Interviews Matter More Than Exit Interviews

A proactive approach to talent management

By Aaron Rubens, Kudoboard

Employees wield significant influence over their careers and choices in the modern work landscape. Reports indicate that a considerable portion of the U.S. workforce has quit quietly when they disengaged from their roles and were dissatisfied with their jobs. The Great Resignation further emphasized the power of employees to walk away from workplaces that fail to meet their needs due to inadequate compensation, lack of respect, or limited growth opportunities. To counter the potential loss of top talent, employers must prioritize strategies that retain employees before it’s too late.

While exit interviews are commonly used to understand reasons for employee dissatisfaction, they often come too late after the employee has decided to leave. An alternative and more innovative solution is conducting “stay interviews” with existing employees, which can help organizations identify and address issues before they escalate and lead to turnover. This article explores five ways that stay interviews can be utilized to harness and retain top talent for the long term.

A Stitch in Time Saves Nine

Stay interviews are a proactive measure to prevent employee turnover by addressing concerns while there is still time to make a difference. Unlike exit interviews with departing employees, stay interviews are conducted with current team members, allowing employees to express any dissatisfaction or issues they may face. By identifying and resolving these concerns early, managers can increase the chances of retaining valuable talent.

Aligning Perspectives

One of the primary reasons employees leave their jobs is the need for more communication with their managers about their challenges and concerns. Stay interviews create a forum for employees to candidly talk with their managers about their feelings regarding their roles, allowing both parties to align their perspectives on job satisfaction and improvement opportunities. Stay interviews’ informal and conversational nature fosters a more open and comfortable discussion environment.

Feeling Heard

Employee retention is positively influenced when employers actively listen to their staff, validate their concerns, and take action based on their feedback. Stay interviews allow employers to practice active listening and show genuine interest in their employees’ well-being. Employers can ensure employees feel heard, valued, and understood by staying neutral and receptive to difficult feedback during these interviews.

Skills Development and Future Planning

A lack of clarity about an organization’s career growth and development opportunities can prompt employees to consider leaving. Stay interviews facilitate conversations about employees’ aspirations and desired skill development. By understanding employees’ career goals, employers can tailor development plans and demonstrate commitment to their growth and advancement.

Boosting Morale

Employers can significantly boost employee morale by using stay interviews to foster alignment, active listening, and career planning. Engaging in meaningful conversations before problems escalate can prevent dissatisfaction from snowballing into significant issues. Employees who feel heard and supported are more likely to remain committed to the company.

Effective Stay Interview Questions

Here are six key questions that managers can use to initiate stay interviews:

1. What do you like most about your job?

2. What do you like least about your job? Do you feel good about your current work-life balance?

3. How valued do you feel as an employee at our company?

4. What would help you feel more valued?

5. Do you feel heard at work? What would help you feel more heard?

6. Do you feel that you have a good relationship with your boss?

Tips for Employees Participating in Stay Interviews

Employees can make the most of stay interviews by considering the following:

● Timing: Request enough time to prepare for the interview and gather your thoughts about your job and any concerns you may have.

● Interview Prep: Familiarize yourself with potential stay interview questions and consider writing down your responses to organize your thoughts.

● Be Honest: Embrace vulnerability and share both positive aspects of your job and areas that need improvement. Stay interviews are designed to address issues before they become irreparable.

Elements of a Successful Stay Interview

To ensure that stay interviews are compelling, managers should adhere to the following elements:

● Schedule in Advance: Set up stay interviews at least a week beforehand to allow employees ample time to prepare and provide more valuable insights.

● Share the Purpose: Explain the purpose of stay interviews and the topics to be discussed to help employees understand their significance and feel more comfortable during the process.

● Active Listening: Focus on active listening during the interview, eliminating distractions, making eye contact, and validating employees’ opinions and concerns.

● Ask Follow-Up Questions: Engage employees in further discussion by asking follow-up questions to gain deeper insights into their experiences.

● Be Open to Feedback: Stay neutral and receptive to positive and negative feedback, demonstrating a commitment to understanding and resolving concerns.

● Be Proactive: Take action based on the feedback received during the stay interview to address employee concerns and promote positive changes.

The rise of Quiet Quitting and the Great Resignation highlights the need for employers to adopt proactive approaches to retain top talent. Stay interviews emerge as a valuable tool to gauge employee satisfaction, identify potential issues, and implement corrective actions promptly. By fostering open communication, active listening, and career development, organizations can create a positive work environment that encourages long-term commitment from their valued employees.

Aaron Rubens is the CEO and Co-Founder of Kudoboard

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