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Pay Equity: A New Requirement for HR

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The laws regarding pay equity are changing. In seven jurisdictions, there are new laws on the books regarding pay equity, including California, New York City, Oregon, Puerto Rico, and Massachusetts. Each has new laws prohibiting employers from asking a candidate’s salary history. There are more than a dozen other pay equity laws under consideration, and it’s going to be a very key focus for lawmakers — and therefore HR and the world of work — in 2018.

Navigating change

Employers are going to have to address this issue, starting now — regardless of your company’s position, or whether you’ve created a policy to deal with pay equity or not. The winds of change are upon us and it’s critical to start revising your hiring practices now. Or you may wind up breaking the law.

It’s not just laws that factor in, however. You’ll also want to be on the forefront of this transformation as an employer. In terms of attracting the best talent, it’s no surprise that it’s a best practice to demonstrate a progressive, well-thought out approach to pay equity. To not be clear about supporting pay equity is to possibly convey a retrogressive stance on fair and equitable hiring. At a time when pay equity is on the radar and in the news, to not have a policy towards pay equity, law or not, could be the key factor in whether a superbly qualified candidate applies to your organization, or goes elsewhere.

But there are also statistics showing that pay equity drives more profitability — tied into the fact that a well and fairly compensated workforce is a more engaged and productive one, and a more diverse workforce is a more innovative and creative one. A study of nearly a thousand companies on their pay equity positions found that the 51 companies officially committed to gender pay equity as of this past spring generated a 12.5% return to investors. That’s opposed to the rest — who generated a return of only 10.2%. Is it possible that paying women fairly is good business? I dare say it is.

Jumping on the bandwagon

According to the U.S. Census of September 2017, U.S. women still make only 80.5 cents for every dollar that men make. Glassdoor’s salary study in the Spring of last year found that men earn 24.1% higher base pay than women on average. But many organizations are taking the initiative. Among those known for their leading stances on pay equity are Starbucks — whose own study of its male and female employees found they are paid within 99.7% of each other for doing similar work. Gap has been officially paying male and female employees equal pay for equal work since 2014, and was the first Fortune 500 company to do so. Costco and Nike are among companies who are stepping up to do internal studies of their workforce. Tech companies are trying to repair their reputations as part of Silicon-Valley-esque bro-culture by conducting pay equity studies of their own. Will they play a role in changing the tech workplace? Probably.

We’ll see more and more organizations taking long, hard looks at their own compensation structures — and trying to remedy equity within existing employees as well as new ones. The Glassdoor study found that one key remedy for the gender pay gap are employer policies that embrace salary transparency. Albany County just announced it’s giving some employees salary “bumps” to address pay equity — days after passing its own salary history ban. We may see companies evaluating retroactive rebalancing, adding additional work/life balance components to their benefits packages, and setting key targets for increasing diversity and inclusion — as they drive towards better and more equitable pay among all of them. But they can’t do it alone.

Outsourcing Equity

That’s where recruiting and hiring firms come in. When companies outsource their recruiting and hiring to other companies, those companies are also responsible for compliance under the law, if not more so. An outsourcing firm that doesn’t guide its client on issues of compliance may be held liable for that client’s breaking the law. So, it’s incumbent upon firms to really understand the legalities involved in these new pay equity laws. And the firms leading the way with this issue are already setting their own policies. HireRight, for instance, recently announced it was building capabilities into its own hiring and screening tools that enabled its clients to remove salary verification from its screening process. Here at TalentCulture, we just featured a #WorkTrends podcast with HireRight on this topic — and we’re going to dive even deeper with them in a webinar coming up.

The bottom line is that if we’re going to improve the workplace, it can’t be left to legislation. But if there is a wave of legislation happening — and far more to come — it’s vital to understand the laws and compliance. When we combine solid internal policy making on the part of well-meaning companies with legislation, and then we increase the effectiveness by having hiring and screening firms create effective tools for observing best practices, then we’re getting somewhere with pay equity. It’s good news, and it’s about time.

This article was sponsored by HireRight. All opinions are that of TalentCulture and Meghan M. Biro.

Interested in learning more about pay equity?  Join us for “Pay Equity Legislation: 5 Ways to Tackle the Year’s HR Must-Do” lead by Meghan M. Biro.

 

New Fingerprinting Tech Gives Hiring a Hand

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Who are you hiring? How do you really know? Identity has become a slippery slope, with more ways to fake social security numbers and personal data than ever before. Thorough background checks — from criminal searches to drug screens to general and skill-specific assessments — certainly help uncover this kind of fraud. But there’s one mark of identity that can’t be changed: your fingerprint. Fingerprinting is the most effective method for verifying identity, and can lead employers to other information as well. And, now that it’s gone electronic, with Live Scan enabling far swifter processing, it has become an even more powerful way to verify identity during the hiring process.

Some states and industries actually require fingerprinting, some don’t. There are complex legal issues, a maze of regulatory statutes, and only about a dozen firms that are authorized to work directly with the FBI — the central repository of the country’s fingerprint database. Which means it’s critical to be as informed as possible when considering fingerprinting and evaluating providers.

This is one arena you don’t want to misjudge. So, here are some key factors to consider regarding fingerprinting; you could say we’re putting our fingerprint on the pulse of the latest best practices:

Check the requirements for your field. Depending on industry and state, you may be required to fingerprint your new hires. This includes a number of licenses, public, and private agencies.

For instance, fingerprints are required for those working with pari-mutuel betting and racing. Indian tribal governments may require fingerprinting for anyone who is going to have regular contact or control over Indian children. Private security officers, criminal transporters, adoption or foster-parent evaluators, and school employees may all be subject to fingerprinting. (Fingerprints are processed for a reduced fee for a number of organizations or firms whose employees will work with children.) Other common industries that may require fingerprinting include healthcare, insurance and financial services. Other dependencies include whether or not applicants are located in or out of state.

Don’t expect fingerprinting to do all the heavy lifting. If you think one fingerprint can magically produce everything you need to know about an applicant, think again. For example, a fingerprint may disclose an arrest record, but not a conviction. According to the U.S. Equal Employment Opportunity Commission (EEOC), it’s ill-advised to deny someone a position solely on the grounds of an arrest record. A summary of the EEOC’s guidance with regard to conviction record screening policies is provided in HireRight’s white paper, Checking in on Employment Background Checks: Are You in Compliance with the EEOC, FCRA, Federal and Local Requirements?

Keep in mind, the FBI database may not receive a record of all outcomes of all arrests, and in some cases, a state may have chosen not to fingerprint. Certain issues may not even appear on the database, which could cause problems later — including possible litigation.

Use fingerprinting to confirm the identity of your hire. Fingerprinting is the best way to confirm identity. It’s been called the gold standard of identity confirmation — and for a background check, this is the straight line between your potential hire and the FBI database. In terms of employee experience, there are plenty of complications involved in the hiring process already. You can eliminate one by making sure your new hires understand the purpose of fingerprinting. Now that identity confirmation is becoming a new normal, and technologies like biometrics are commonplace, you may be pleasantly surprised by younger generations who are comfortable with fingerprinting — many already protect their smartphones with their fingerprints, for example.

Make sure the service provider you use is reputable. Since employers need to be authorized by law (federal, state or local) to access the FBI database, they depend on companies that are authorized to conduct background checks. You need to make sure, however, that the data the company produces is accurate and reliable.

There are a number of questions to ask and key among them is what the turnaround time may be. A common sentiment is that background checks are notorious for holding up the hiring process which can generate unintentional ill will in the applicant. But, if the provider uses up-to-date technology, they can process and communicate electronically, speeding up the process. A clear best practice: Work with a provider who is approved and holds the required credentials, and as such, is able to work with the FBI or FINRA (for financial services). The provider should also use current systems to help deliver fast results, enabling you to communicate with your candidates quickly.

Don’t guess: depend on experts regarding regulations. There are enough opportunities for mistakes and misunderstandings throughout the hiring process as it is. There is also a wide range of regulations involving how fingerprinting is done, and who can do it. And then there are laws governing who can actually see the fingerprint data when it’s complete. Given this legal maze, you want a background check provider that has the expertise you need so you don’t overlook anything that might jeopardize the hire.

Do opt for the new industry standard. Electronic fingerprinting, or Live Scan, has changed the game, in many cases reducing the process to a matter of hours. This is a huge assist in the quest for faster onboarding — you don’t want to lose out on a premier candidate due to a drawn-out process.

Live Scan is inkless, available at multiple locations — often a postal or shipping establishment — and makes a formerly cumbersome step both quick and easy. The results are just as accurate, if not more so: if a fingerprint doesn’t scan correctly, the machine will immediately prompt a redo, a fact which nearly renders the old smudged “hard cards” obsolete. The process can also be customized to the requirements of the job, from individual prints to a whole hand impression.

Again, fingerprinting is certainly only part of the equation, and it doesn’t eliminate the need to conduct a thorough background check. While John or Jane Doe may possess a false social security number, they can’t change their fingerprint. It’s good to know there are still some things that just can’t be altered. And as far as improving the hiring experience, electronic fingerprinting offers both ease of use and transparency — an improvement for everyone involved in the hiring process.

This article was sponsored by HireRight. All opinions are that of TalentCulture and Meghan M. Biro.

Photo Credit: rulke Flickr via Compfight cc

Applicant Screening: How to Show Talent You Really Want Them

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Bringing top talent into your organization is a careful dance: on the one hand, you need to know everything you can about an applicant, and on the other, you don’t want to scare them off in the process. The good news is that most job candidates understand the need for screening and background checks, and know there’s far more to their application than just having an interview or filling out an application. Even better news is that done right, screening can actually help to convey your genuine interest in job applicants, and increase their interest in working for your company.

Of course that also means there’s a flip side: done, let’s just say, less than ideally, a screening process can result in alienated candidates who would rather withdraw their application than continue the process. If there are any misunderstandings along the way, clear them up by clarifying process, timelines and expectations. If any kind of strike against an application comes up — from an old credit snafu to a lack of certifications, handle it with discretion and tact. Consideration and clarity go a long way. If it’s a problem of not being qualified but being otherwise promising, a positive approach may place them into a talent pool, where they’re ready to apply for a job they’re more suited for — and a known quantity to your firm.

It’s critical for companies to have a well-designed, thoughtful screening process. Here are five best practices to follow:

  1. Make it mobile-friendly.

Only 20% of companies are deploying their HR and employee productivity solutions on mobile apps. But if there’s a single criteria an organization should make sure it meets, it’s being mobile friendly. Mobile application systems can markedly improve candidate experience, and that certainly includes the screening process. Millennials and Generation Z’rs may well assume they’ll be able to do everything via mobile, and be turned off when they realize they can’t. It may also convey your employer brand as being not quite up to date or tech-forward — given the choice, most younger candidates will opt for a company that is more up to date.

  1. Make it efficient.

60% of potential candidates have quit a job application process because it was too lengthy. If you’re a small to medium or hungry company that is trying to stand out above the fray, there’s a golden opportunity here. Make your application process functional but merciful, if you can. Making it streamlined may not be that simple depending on the position, but as far as not losing candidates in the process, it’s worth considering.

  1. Screen relevant criteria, but leave out the rest.

You want to get a comprehensive report that addresses the concerns and questions related to working both at your company and in the position the person’s applying for. But a hospital and a software company have different criteria beyond security questions, and executive-level is altogether different from entry-level. Outsourcing a background check to a company that conducts generic, one-size-fits-all screening only adds to the candidate’s impression that they’re nothing but a number. It also may not give you all the answers you need to make the right hire.

  1. Don’t leave out contingent or gig workers.

In the latest benchmark report by the veteran screening firm HireRight, 77% of employers polled are projecting organizational growth, and 62% of employers polled are most concerned with finding qualified job candidates. It’s inevitable — and it’s also trending — that a substantial portion of hires may be contingent or temporary workers. For both security and fairness, they should be guided through the same screening and background check process as payroll and permanent employees. 86% of employers are already doing that, according to the report, but those that aren’t are overlooking a potential risk, as well as a strike against their employer brand. It’s not fair to full-time employees who did have to undergo full screenings if they’re working alongside those that didn’t — particularly if they share the same level of security clearance.

  1. Offer applicants an accessible, easy-to-navigate portal.

Candidates should not have to feel like they’re submitting to a mysterious process to do background screening. A navigable, friendly portal is the best way through the process. There should be someone available to answer questions, and if there is unfavorable information, a tactful approach to conveying it. Make sure Fair Credit Reporting Act legal requirements are followed correctly. If a candidate disputes the findings of a report, they should be able to discuss it and an investigation should be made — and resolved quickly. Resentment breeds disengagement quickly, and it may well be all over an error. Which is yet another reason to use a reputable firm with experience.

Even if a company has limited resources, accurate, well-designed screening systems are out there. The best ones help the employer present themselves in their best light — transparent not only about what they need to know to make a good hire, but also the fact that they respect and value applicant’s time and energy. Nothing will drive candidate engagement faster than a positive screening experience. In today’s talent market, it’s the edge you need to hire great talent. Want to learn more?  Watch “7 Steps to a Candidate Experience That Wins You Top Talent” a webinar on demand lead by Meghan. M. Biro.

This article is sponsored by Hireright. Opinions are my own.

Photo Credit: RollisFontenot Flickr via Compfight cc