The Trillion Dollar Jackpot Lurking in HR
Companies, large and small alike, are always trying to find ways to increase bottom line results and return profits to the organization, shareholders and employee base to signal healthy business operations and strong leadership. I cannot name one client of mine who is not laser focused on some form of growth or revenue strategy to either sustain or grow their footprint within a given region or industry. In fact, most of my compensation related engagements center on the design and implementation of incentive plans to motivate employees to either capture more revenue or enhance business operations in an effort to optimize business and financial results. In most cases organizations achieve better business results by expanding product offerings, cutting expenses or deepening its expertise in a particular area. I can vouch that the aforementioned measures usually do result in improved fiscal and operational results; however there is one place many decisions makers are overlooking to unlock financial gains and operational efficiencies…..you guessed it, Human Resources.
Women’s Pay Equality in the Workplace
According to a study published by McKinsey & Company in September of 2015, the global gross domestic product (GDP) could be boosted by $12 trillion dollars by 2025 if advancements are made towards women’s equality in the workplace. Women comprise half of the world’s population, and according to the National Center for Educational Statistics, women in the United States continue to graduate at a higher rate than their male counterparts. This means a large number women are qualified to contribute to any organization’s mission in equal portion to their male counterparts. The McKinsey study highlights the fact women have and are making strides towards professional success which leads to stellar company performance; however there are still pay and leadership gaps that need to be addressed to create strong pay and mobility parity between men and women. Acknowledging these gender gaps in the workforce, according to the McKinsey study, is essential to the success and growth of the global economy. Specifically, the study identified four categories of gender inequality that need to be addressed in order to get the economy churning and generating trillions of additional dollars:
- equality of work,
- essential services and enablers of economic opportunity,
- legal protection and political voice, and
- physical security and autonomy.
As I read this portion of the study, my mind immediately shifted to what that means in terms of HR. Having well defined job descriptions, a leveled job structure and market priced roles serve as the basis for equality of work. If an organization focuses efforts on ensuring their jobs are clearly defined, titled consistently, and set work and performance expectations at each level within the hierarchy, there is a strong likelihood the organization will see better business results and individual employee performance so long as the right talent is identified for the role. I cannot tell you how many times I have seen a lack of job symmetry play out inside of organizations and many times lead to top performers exiting the business. Organizations should seek to organize and value jobs in a meaningful and impactful way across the organization to ensure similar performance expectations are standardized, employee performance measured consistently and work is valued similarly. This measure also serves as the basis for a workforce that values equal pay for equal work.
Total Rewards Programs
HR also has an opportunity to help the organization drive for essential services and enablers of economic opportunity by designing total rewards programs that consider the needs of the whole person. According to World at Work, many employers are now focused on delivering a balanced total rewards program (compensation and benefits) offerings that seek to address the needs of its employee base. Enlightened organizations typically survey their respective workforces to better understand the challenges facing employees, both inside and outside of work, aggregate the results and then determine the most impactful and meaningful course of action. Organizations employing a large number women who are child bearing age might see a need to subsidize child care or offer fertility treatments as part of the benefits package. Women who fall into Generation X or are Baby Boomers might need dependent care options for their aging parents and telework arrangements to balance being a mother and a productive employee. More and more we are hearing how Millennials are interested in higher salaries or student loan assistance in lieu of pensions and 401k matches. Organizations that take measures to understand the needs of their workforce and devise programs and benefit offerings that address employee needs, will ultimately pave the way for women to feel supported. In turn, this should provide women with peace of mind when it comes to the challenges of balancing work and life and foster an environment where they can focus their intellectual capital on company results.
A Culture of Inclusion
The United States has made great strides with ensuring all organizations do their part to deliver legal protection and a political voice to all employees through executive orders and mandated regulations such as Executive Order 11246 which protects discrimination in the workplace, the Pregnancy Discrimination Act which prohibits pregnant women from being discriminated against at work, and the Fair Labor Standards Act (FLSA), which is covered under the Equal Pay Act, which ensures wage disparity is eradicated between men and women and minorities and non-minorities, and jobs are consistently classified. It is imperative that HR recognize these work-related laws and mandates and takes measure towards ensuring the organization is compliant and all employees feel welcomed and can count on being paid and treated fairly in all aspects of their employment.
The McKinsey study named physical security and autonomy as the final indicator of gender equality. As someone who is privy to common HR related issues organizations face, this indicator centers on culture. Enough cannot be said about the importance of corporate or organizational culture. At the end of the day, this is the tie that binds all levels employees to the organization’s mission and ensures daily interactions are meaningful and impactful. When employees can come to work and feel safe and are given capacity to think independently and contribute to the broader effort, the organization will see greater returns because employees will be deeply engaged in the mission of the organization and their daily work. Fostering a culture where all people feel welcomed is critical to an organization’s long term success. Organizations are more likely to attract and retain top performers when the culture is clearly articulated and flows through all areas of the organization. Identifying and common beliefs and behaviors that will help an organization thrive is essential to its people strategy, and essential to employees being dedicated to the organization’s mission.
If every organization could make human capital strategies an essential part of its mission, and widely communicate them, the world would create welcoming work environments that provides all employees, and especially women, with an opportunity to channel their work efforts all while making substantial contributions. Knowing the key to unlocking increased cash flows, company profits, and subsequently, returning more income to employees, hinges on an organization’s people strategy should make any HR professional recognize the power they possess in making the workforce both a meaningful and profitable place to be!