
The legislation’s aim is to help ensure equitable compensation
and opportunity for employees in the private and public sector,
with the particular goal of promoting greater gender equality in
the workplace. The long-term objective is to eventually strip away
biases from recruitment, promotion, pay practices and consider-ations
of employment status.
The previous government determined that the best way to
achieve that outcome is to hold organizations accountable for
their hiring and compensation practices by enforcing transparency
rules. Whether rules change under the current regime remains
to be seen, but for now the legislation is slated to move forward
as planned.
In theory, at least, employees will be better equipped to com-pare
the pay practices of any prospective employer, make informed
decisions as to whether their approach to compensation is fair and
equitable, and use that information to determine whether that
organization’s values align with their own. Indeed, any perceived
misalignment – either on an individual basis or when comparing
the organization’s workplace culture to that of its competitors –
could significantly impact that employer’s ability to attract, engage
and retain top talent. Many labour and employee-rights advocates
have argued that changes such as these are long overdue. Some
employers have shrugged off the new compliance requirements as
unremarkable; a non-factor in their day-to-day operations.
But make no mistake, the workplace implications stemming
from the Act are far-reaching and certainly not benign. By effec-tively
forbidding organizations from keeping compensation
information confidential, this legislation represents a sea change in
employer-employee relations during the often sensitive and com-petitive
recruitment process. The new requirements could have
even more serious implications in industries such as the technol-ogy
sector, where the competition for talent is notably fierce – and
acquiring top performers for the right price can make or break an
organization’s bottom line.
Important, too, are the reporting requirements. For larger orga-nizations,
taking time to report compensation data could prove
especially onerous and costly. It could also attract unwanted scru-tiny
from media or special interest groups who look at aggregate
data and arrive at conclusions about an organization’s hiring prac-tices,
diversity record and workplace culture, in lieu of performing
a complete analysis of the prevailing industry or economic condi-tions
influencing those metrics.
It will fall to HR professionals to find innovative ways to com-ply
with the Act by drafting customized policies that advance their
organization’s strategic business goals, yet still carefully position
the organization as an employer of choice. The most daunting
question is: How? As always, the best approach is to be proactive
and highlight potential labour and employment law risk exposure
before developing that customized strategy. Effectively highlight-ing
risk exposure likely requires a complete audit and analysis of
the organization’s recruitment process, including documenting
those in charge of hiring at every stage and their approach to inter-view
management and questioning. This may seem like an obvious
step, and information that most companies would already have on
hand, but in practice there are cases where recruitment occurs out-side
of – or alongside – official HR channels.
This approach to recruitment creates significant risk when,
for example, a line manager is brought into the interview process
without proper compliance training. But that risk exposure isn’t
limited to the interview process. An organization’s marketing-communications
team is often the one writing job postings
(typically under the loose direction of HR), while managers are
the ones responsible for interacting with employees on a day-to-day
basis. The former can easily run afoul of the Act if they fail to
provide compensation information on all publicly-accessible job
postings, while the latter could be sanctioned for attempting to
prohibit employees from comparing salaries in the workplace, for
fear they’ll subsequently demand raises if wage disparities become
evident during discussions around the proverbial watercooler.
That said, it’s important to remember that the Act isn’t all bad
news. Quite the contrary, in fact. Progressive organizations should
see this new set of compliance requirements as an opportunity to
modernize their recruitment process, become more competitive
in the search for top talent and leverage transparency as a way to
foster greater diversity, inclusiveness and engagement across the
workplace. It’s not easy, but when done right, organizations can
reap major bottom-line rewards by improving several key HR
functions including compensation, recruitment, manager training
and communication.
COMPENSATION
Although the Act requires organizations to disclose salaries or sal-ary
ranges for open positions, it requires their competitors to do
the same. This opens a window not only into prevailing market
wage conditions, but also creates an opportunity for an organi-zation
to out-bid a rival for the professionals they both hope to
attract. Since unemployment rates are hovering at less than six per
cent – edging close to full employment and creating a seller’s mar-ket
for labour – HR professionals and hiring managers can use
these new requirements to produce more appealing compensation
packages. This helps to avoid protracted interview processes where
promising candidates are presented with a job offer, only to turn
it down because the compensation isn’t commensurate with their
expectations or in line with pay offered by comparable employ-ers
in the industry. In other words, the requirement to post salary
ranges can be a source of valuable recruitment intelligence for HR
teams – assuming they take the time to conduct necessary research
and analysis to develop competitive compensation structures.
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THE LONG-TERM OBJECTIVE IS
TO EVENTUALLY STRIP AWAY
BIASES FROM RECRUITMENT,
PROMOTION, PAY PRACTICES
AND CONSIDERATIONS OF
EMPLOYMENT STATUS.
24 ❚ OCTOBER 2018 ❚ HR PROFESSIONAL