Jennie Brooks, host of the Unstoppable Together podcast sits down with Senior Manager of Compensation and Benefits at Booz Allen, Kim Chaplin. Kim explains the difference between pay transparency and pay equity, and how you can productively approach conversations about pay. Tune in to learn how pay equity contributes to greater diversity, equity, and inclusion, and how pay transparency can facilitate more positive and inclusive relationships between employers and employees.
Jennie Brooks:
Welcome to Booz Allen Hamilton's Unstoppable Together podcast, a series of stories that unite us and empower each of us to change the world. I'm Jennie Brooks with Booz Allen Hamilton, and I'm passionate about diversity, equity, and inclusion. Please join me in conversation with the diverse group of thought leaders to explore what makes them and all of us unstoppable.
Hello everyone, and welcome to the Unstoppable Together Podcast. I'm your host, Jennie Brooks, and today I'm excited to be joined by Kim Chaplin, a Senior Manager of Compensation and Benefits at Booz Allen. Kim brings an extensive background in compensation, both in the United States and internationally, and has been designing and implementing compensation programs for companies for over 20 years. Kim, welcome to the podcast.
Kim Chaplin:
Thanks so much, Jennie. I'm really excited to be here.
Jennie Brooks:
Same. We're excited to speak with you. Thank you for joining us today. The topics of pay transparency and pay equity have become a priority for many businesses today. Can you start by telling us a little bit about what these topics are and why have they become such a priority for employers?
Kim Chaplin:
Yes, absolutely. Well, pay transparency and pay equity are kind of intertwined or interconnected. Pay transparency is really about giving employees and candidates information about their pay and the salary ranges that go with it, like how pay is administered at the company. While pay equity is actually the concept of compensating employees who have similar job functions with equitable pay, and so what that means is that the pay would be based on their skills, their abilities, their experience, their job responsibilities, and would not have been determined with regard to their gender, their race, ethnicity, or another status that's not job related.
An important distinction too is that the promise of pay transparency and pay equity together is to take some of the tension and negativity out of compensation conversations to truly make pay equitable and focused on both the person and the job, what the person brings to the company.
Jennie Brooks:
Okay. In the meantime, we're seeing new pay transparency laws at both the state and local level, which require employers to disclose pay ranges for open positions. We've seen this in states like California, Colorado, New York, Booz Allen currently posts ranges on all of our job reqs regardless of the location. Tell us a little bit more about those requirements and what that means for employers and the employees.
Kim Chaplin:
Yes. As you mentioned, the pay transparency laws are being enacted at different states, and so those laws can vary by state, but basically, they are requiring employers to give both employees and candidates data about their pay programs. Primarily, the main one that you mentioned that Booz Allen follows is providing a specific range on a job posting so that everyone is working with the same information. And the reason I think that that's important is that what many other orgs do is go out and look at market rates, what other companies pay, get this data through trusted third-party survey providers, and then set specific amounts for jobs. You'll also hear them called pay bands, pay ranges, broadbands, things like that. But what those ranges do is that they create consistency for people so that they know what a job is paid if they're doing that job.
And by posting these ranges and the public job posting the employees and the candidates, they don't have to read a job title and guess what the pay range is going to be. They can sort of self-select and say, “Oh gosh, no, there's no way I would take a job for that level of money,” or “This level is the dream job,” and so what it does is it saves both employees and employers a lot of time, and it keeps them really focused on what the job role is, versus just trying to force fit someone into a pay box or a pay band.
Jennie Brooks:
Okay.
Kim Chaplin:
I saw a funny meme the other day that really captured pay transparency perfectly. So, it was these two old-fashioned Wild West gunfighters, and one was labeled a recruiter and the other was labeled a candidate, and both of them had their hands at their sides ready to draw their guns, and the speech bubble coming from the recruiter was, “What's your desired salary?” And the speech bubble coming from the candidate was, “What's your salary range?” So, it captures the silliness and the kind of almost gameplay that used to occur. It gives everyone, both recruiters and candidates an equal footing on salary negotiations.
Jennie Brooks:
All right, so you make a good point, that meme, that cartoon, there are other steps that companies can take regarding pay equity, for example, we don't ask for or consider a candidate's compensation history as part of that recruiting and hiring process. What does that help address, not asking the candidate for their compensation history?
Kim Chaplin:
Yeah, that's a great point, and it does go hand in hand with pay equity as well, because what happens is, a lower starting salary earlier in your career can really affect your potential earning for the rest of your life. If you start at a lower rate and you get 3% merit increases each year, that's going to be much less than if you start out at a higher rate, for example. And research really shows us that both women and underrepresented groups have historically started lower on the pay scale, given systemic and historical biases, and this has impacted their lifetime earnings.
And when I first started out in human resources, I had about six months of HR experience when I got what I call my first “real” HR job, and there were three of us hired at the same time, and we were all hired for the same job. It was an HR representative in a kind of a call center environment, and we answered employees' basic questions, and I only had six months of experience, and they asked me, “What's your starting salary?”
So, I named a really low number. And I was thrilled when I got the job. The next person hired was a Black woman who had five years of experience, and they asked her what she wanted, and she named a number and it happened to be 25% higher than me, and she got that salary. Then the third person hired was a man, a white man with two years of HR experience, and he named a number and he got that number, and that number was 50% more than what I was making. And then when we all sort of came together and started working together, it came out that his father played tennis with the director of recruiting for the company and had told him what salary to ask for.
Jennie Brooks:
Wow.
Kim Chaplin:
So, you could make different arguments. I mean, obviously I wasn't upset because I had no experience and I was thrilled to get what I wanted, but you could make arguments about the other people in that situation, what was fair and what was equitable. And so, I think that prohibiting the use of compensation history in hiring promotes pay equity, it really encourages employers and recruiters to base their compensation decisions on fair and equitable factors that really are job-related.
Jennie Brooks:
And let's just talk a little bit about pay equity itself. So, in our case, Booz Allen conducts annual pay equity studies. It's something that we write about in our annual environmental, social, and governance or ESG report, too. Tell us just a little bit about what people should know about pay equity.
Kim Chaplin:
The thing to know is that it can cover a wide range of actions that include developing fair and objective compensation practices in conducting the regular pay equity audits like Booz Allen does. So, what these audits do is they go out and they look at the employee's compensation at a company and they identify, examine, and if necessary, correct unexplained differences in pay between employees of different genders, races, and ethnicities. So, it's really something that goes out there and tries to make sure that any differences in compensation are really, again, based on something having to do with the role or the person's experience. So, something that's objective.
Jennie Brooks:
Okay.
Kim Chaplin:
Yeah.
Jennie Brooks:
If those who are listening are an employee who wants to have a conversation with their manager or vice versa, and a manager who wants to talk with their employee about pay, how would you encourage them to approach that?
Kim Chaplin: Yeah. I absolutely encourage both sides to approach it as a dialogue, to make it personal and specific, especially with employees, I encourage them to stay positive and get curious, ask a lot of questions. Ask questions about the compensation programs in your company. How is performance rewarded? What does great performance look like? Be clear about what you think your job and your expertise are worth and what you can contribute to the organization in return for the compensation that you want to get, right?
If you're talking to a recruiter and you have better offers, be clear about that. I think the way to go is to really understand how your company manages their compensation programs. Ask questions about that because you can go and do all this research and then you find out that your company has a different comp philosophy or they look at market data a little bit differently, or they have an internal program. It's really important to, again, engage in a dialogue with your manager and really make it specific about your role and how the company works.
Jennie Brooks:
Okay. Better understanding the company's compensation philosophy, how the company is looking at that data as a starting point. Okay.
Kim Chaplin:
Yes. That's going to give you the best way to open the conversation.
Jennie Brooks:
Right. It should be an active part of a conversation just as professional development or personal objectives or balance all part of it. Right?
Kim Chaplin:
Yeah.
Jennie Brooks:
Kim, at the end of every podcast, we give our guests some free space to share their final thoughts with those listening. What would you like to leave our audience with today?
Kim Chaplin:
I really encourage employees to look at it from a full, comprehensive review. I think human resources is actually about the resources that the company provides to support its humans. Add all of that up, figure out what you need in your life, what works for that life stage you're at, and think about what type of work you're willing to do and what you do expect in return. I almost sometimes call it an elaborate barter agreement, and when you get the work in the job correct, the numbers often fall into place when you really add up your experience and then you add up all the things that the company is providing you, not just in compensation, but also in benefits, time off, flexible time, work-life balance, that kind of thing. Studies have really shown that pay transparency alone is not enough to make employees happy. Yes, they need to feel there's equitable pay, but they also want that meaningful, filling work.
Jennie Brooks:
Right.
Kim Chaplin:
Great, great culture environment, great teammates, that kind of thing.
Jennie Brooks:
Thank you, Kim.
Kim Chaplin:
Thank you so much. I've really enjoyed talking with you about this.
Jennie Brooks:
Thanks for listening. Visit careers.boozallen.com to learn how you can be unstoppable with Booz Allen. Be the future. Work with us. The world can't wait.