For many businesses, managing human resources falls in the hands of the owner. That includes overseeing recruitment, hiring, training, and payroll. If not done correctly, it can cause oversight within the business. But with the proper tools and technology, business owners can make sure they’re implementing more equitable practices, which ultimately makes for a better work environment for everyone. Heyke Kirkendall-Baker, president and co-founder of Parity Software, highlights how businesses can benefit from using active HR technology to improve hiring practices and compensation strategies.
The social justice movement, coronavirus, and intensifying economic crisis have fundamentally altered the talent war. The tables have officially turned in favor of equal opportunity, and businesses are struggling now more than ever to implement equitable hiring and retention strategies.
Yet, for many small to medium-sized businesses, HR management falls in the hands of the owner. Without support from a dedicated HR team, fair hiring practices (including equal pay methodologies) can require labor-intensive, expensive, and manual data-storage processes.
How can businesses effectively rethink their talent management strategies to put equality at the center of every decision, regardless of the organization’s size?
And how can they attract and retain diverse talent that is smarter, savvier, and pickier than ever before?
An increasing number of organizations are turning to active HR technology – software and solutions that move beyond simple data collection to fuel equitable decision-making – to simplify and automate the equal pay process at every stage of the employment lifecycle. Here’s how.
Identify the Difference Between Active HR Technology and Passive HR Technology
Passive technologies are static and insolated by design. Consider the first electric doorbell. When Joseph Henry first invented the doorbell in 1831, the world marveled at this new breakthrough. But what did this passive technology bell do? Just one thing, in isolation: It signaled to the homeowner that someone was at their front door when the button was pushed. The only interaction was to either answer the door or ignore it altogether.
Fast forward to today’s advanced, active technology version of Henry’s original design – doorbells with built-in home security cameras (such as the products Ring, Google Nest, and Arlo have brought to market). Now, when someone approaches your doorbell, you can receive an immediate notification on many WI-FI enabled devices. This one action can create a ripple effect and cause a multi-way operation to transpire.
In HR, passive technology includes Excel spreadsheets, databases, and the hard drives many HR leaders use to store information, such as job descriptions, documentation and pay scale data. Passive technology is simply a repository for data, with analysis left up to the HR practitioner. The vast majority of human resource information systems (HRIS) available today are passive in nature.
Active technology is a powerful tool that guides decision-making. It includes cloud-based software that analyzes data from queries, updates, and reports and then provides recommendations on moving forward.
For example, some companies, including Codacy, Buffer, and Gitlab, have created salary calculators prospective candidates can use to determine what they’d make if they came on board the organization. These calculations typically include the base salary for a specific role coupled with the minimum job requirements (as they relate to career advancement and market realities). This is active HR technology in action.
If, like many companies, you don’t have the resources to implement artificial intelligence (AI), you can still leverage active HR technology systems that use embedded algorithms to uncover patterns in your hiring and compensation practices and generate insights on everything from job postings to pay increases and more.
In practice, it looks something like this: You’ve hired someone who meets the minimum requirements for the position in terms of experience and education. The job is at a particular pay scale, so as long as the new employee’s salary falls within that range, it seems fair. However, the decision on pay is often made in isolation by a hiring manager who may not take into consideration the salaries of other employees who are doing the same or very similar jobs. If the new employee has received a salary bump due to additional, preferred education or experience, this data is typically lost.
In an active HR technology environment, however, the system captures any preferred education and experience. It reviews the current salaries of other company members doing the same or very similar jobs (while also considering their current education and experience). Using this information, the system generates a much tighter salary range closely aligned to the new hire’s qualifications. This salary decision has not been made in isolation, is not arbitrary, and can be justified. As the employee gains experience or education over time and receives regular performance reviews, the system will analyze the changes and suggest any warranted pay increases.
Essentially, active technology tells HR managers what they have done (has your company filled executive positions solely with white men ages 45 and older?) and what they need to change (if anything) to establish an equitable company. If you have a small team, active HR technology can be your saving grace, saving you time and money while ensuring accuracy and objectivity.
Select Technology That Delivers Consistency, Objectivity, and Simplicity
You no longer need to be a certified IT expert to derive meaningful insights from active HR technologies. There are online tutorials, how-to videos, and specialized resources to guide you every step of the way. You can also put best practices and hiring requirements into cloud-based software to automate the process. This ensures that job descriptions are standardized, interview questions are consistent, and candidate scores are designed in a way that removes unconscious bias from the equation. This capability simply isn’t possible with passive HR technology, such as physical data storage.
Here’s what to keep in mind as you evaluate active HR technologies for equitable hiring:
1. Current technology effectiveness
Start by analyzing the technology you already have in place, including systems and solutions to recruit and retain your workforce and track payroll, job descriptions, demographic information, and more.
What pieces are missing, and what processes need to be improved?
Are you taking advantage of any of the cloud-based tools that complement and enhance your organization’s ability to recruit, retain, and cultivate an equitable workplace?
2. Software that can be easily integrated
Select software that can tie personnel data (job descriptions, payroll, and demographic information) and HR processes (hiring practices, pay raises, performance evaluations, and promotions) together.
This should include:
- Existing employees: For example, how long have they been in their current role? How many times have they been promoted compared to their peers?
- Ideal candidates: For example, how many women, people of color, veterans or people with disabilities do you want to hire, and how many do you want to place in upper management?
Implement software filtering to prevent unconscious bias from influencing your perception of the perfect candidate.
3. Software that provides actionable insights
Ensure that the solution(s) you choose enables you to analyze, distill, and synthesize data to unearth key insights needed to inform decision-making. It’s not enough for the solution to deliver data. It also needs to tell you what it means and how you might do things differently.
Put Insights Into Action
Based on the learnings gleaned, create a strategic roadmap to put these insights into action. With active technology, HR leaders hold the keys to convert data into valuable insights and cultivate an equitable and inclusive workplace.
Ultimately, while the process of ensuring pay equity for hiring and retention purposes can be fraught with fear and uncertainty, your technology doesn’t have to be. When implemented correctly, technology can help you make data-driven, logical, and consistent decisions. Perhaps most importantly, it can help prevent mistakes that could have expensive, detrimental ramifications for the organization – now and in the future.
Heyke Kirkendall-Baker brings more than 25 years of experience in human resources and employment law to her current role as president and co-founder of Parity Software, a pay equity solution provider based in Portland, Oregon. Parity Software is an automated, on-demand, cloud-based solution designed by HR professionals for HR professionals to ensure employees are earning compensation that is internally equitable.