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Why pay equity should be top of mind during mass layoffs

The CEO of Syndio explains how layoffs done wrong will only compound the problems in business, and in our society.

Why pay equity should be top of mind during mass layoffs
[Source image: Anna_leni/iStock]

As the COVID-19 pandemic has settled in across the globe, leaders at companies large and small have watched their business sharply plummet. Many are in the throes of swiftly acting to manage costs and either considering or enacting layoffs, usually as a last resort to keep a company solvent.

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But while leaders are rightly concerned with making sure layoffs are conducted with sensitivity and in a way that ensures business continuity, they are often forgetting about an important unintended consequence: the impact on pay equity.

Let’s face it: when the axe falls, it often falls on those who are already disadvantaged. Tough times don’t level the playing field. Tough times exacerbate differences. The impact of hurried layoffs is going to fall disproportionately on women, who are already carrying more than their fair share of the burden in the current “work and school from home” environment.

So, as company leaders make these already tough decisions, they need to place importance on doing it fairly. Laying people off is a horrible experience for everyone involved, and is especially taxing when the world is already anxious and the future is so uncertain. It’s easy to get overwhelmed, so consider these critical factors to ensure you are promoting equity in your workplace.

Layoffs can disproportionately target women

People affected by layoffs often fall into one of several groups: low performers, people with duplicative jobs, new hires who have yet to establish themselves, and lower-level roles with limited responsibility in the organization. Given that layoffs are not randomly assigned, there is potential for subjectivity to play a role in who is impacted. And even when not intended, women and minorities are often affected because of the jobs that are typically held by them, and how these jobs might feel expendable in times of layoffs (e.g., human resources, marketing, administrative support).

Additionally, women are less likely to hold leadership roles within an organization, the roles often “safe” in uncertain economic times. So leaders should apply objective reasoning to help guide their decisions. Stop and do the math—are the cuts you are considering disproportionately affecting certain groups? Mine the data and analyze it before you make decisions to ensure you are making them fairly.

Layoffs can create new expenses and risk

Many companies fall into the trap of looking at what is being cut and miss the step of looking at the workplace that remains. Once you’ve taken the first pass at cuts, take a look at what’s left. How have the cuts affected pay equity? If you are cutting staff blindly to reduce costs, you may also be creating pay disparities that need to be remediated, creating a whole new expense–or legal risk–for your company. Not to mention, pay disparities can be detrimental to workplace culture, causing further disruption to your business.

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Measure pay equity quickly and accurately

If your company already uses a firm to help with assessing pay equity, ask them for help. Or leverage software that enables you to compare scenarios. If your company is small, you can make some calculations by hand. But however you do it, look at who you are thinking of cutting and examine the makeup of that group. Then look at the company after the layoffs. Are there fewer people from underrepresented populations? Are there new pay disparities because of the change? If there are, fix them now. It may seem incongruous to give someone a raise even as a layoff has just happened, but be transparent about the reason and your employees will be appreciative.

Invest in the people who are still with you

Research shows employees value transparency, and without communication from their leadership, they will build their own narrative. In these uncertain economic times, that narrative is likely to be one filled with fear, doubt, and mistrust. If your organization is proactive in promoting pay equity during layoffs, now is the time to give employees a peek under the tent. Communicate the drivers of your decision-making process, highlighting pay equity as one of those factors. This will help those that remain feel committed and trust you as a leader. Embracing a socially just issue like pay equity and being transparent about your intention in establishing and maintaining it during tough times can be a strong lever when it comes to engaging your remaining employees.

The bottom line: Pay equity does not take a break in times of crisis. Layoffs done wrong will only compound the problems in your business, and in our society. It is imperative that we continue to hold ourselves and our fellow leaders accountable, not only to uphold the law but to continue to do what is just plain right.


Maria Colacurcio is the CEO of Syndio.

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