Are Recruiters Responsible For The Pay Equity Gap?

Are Recruiters Responsible For The Pay Equity Gap?

Recruiter: “Well we haven’t talked about comp yet, what are your expectations?”

Candidate: “I need to be somewhere between $170,000 and $180,000.”

Recruiter: “Okay, I think that’s doable. Of course, I’ll double-check with the hiring manager. That said, if we came in around $173,000-$175,000, would we be okay?”

Candidate: “Yeah, as long as it’s above $170,000.”

Recruiter: “It won’t take me long, let me get it nailed down and I’ll send over your offer letter today. Thanks again, we can’t wait to have you on the team.”

In America, this type of compensation conversation between recruiters and candidates happens every 53 seconds*

From the scenario above, three additional data points for you to consider:

• The candidate in the scenario above is a female, a person of color, a veteran, a member of the LGBTQ community, a disabled person, etc. Essentially the candidate is not a pear-shaped middle-aged white guy.
• The compensation budget for this position is $200,000
• White men at the same firm doing the same work with the same experience earn on average $192,000

The problem:

Well, this is where it all gets tricky. Recruiters have been trained to think that they just saved the business $20,000 from the peer average or $30,000 from the max comp.

They’re winning, right? No.

They’re not winning, they’re losing and hurting the business simultaneously. Again, they’ve been taught to believe that they’re supposed to get value in hiring. Value in this case comes with an unsettling consequence of distancing peers from a pay perspective.

They’re thinking about value in terms of getting someone to say “yes” to a job where they’re paid differently, (far) below what their peers make. In their minds, value equals below market price. 

How recruiters should think about this is simple yet complex. When they receive a job req, the first thing they do is think of job descriptions and traffic to the ads and funnels and interviews and scheduling, etc.

What they should think about when they receive a job req is the relative nature of compensation. What does this person need to make that will make them equal to employees within their firm? They need to know what that “precise” compensation number is before they do anything else.

Think of it like this, they should start the compensation discussion for a new opening with a review of what they’re “supposed” to pay the candidate. NOT where they think they can get someone cheaper. Thinking about value in hiring is one of the reasons we’re in the place we are with regards to pay equity.

It’s not the only reason, but recruiters have made it difficult for employees to reach an equitable position because they’ve started them so far back from their peers. 

The good news:

Most companies have a compensation team buried in the basement of their fancy headquarters. Comp people are Excel people. Compensation people know compensation like recruiters know recruiting.

These internal compensation teams know exactly what the budget should be compared both internal to their firm, external to their location, AND external to national averages. They know beyond a shadow of a doubt that the candidate above should be making $192,000.

Note to self, recruiters need to build better communications with their comp teams so that they know for sure what candidates should be paid. 

If you’re not lucky enough to have an internal compensation team that’s okay, compensation software for the enterprise is readily available and will help guide you with, again, what candidates should be paid.

A few recommendations:

1. Before a job ad gets posted internally or externally, compensation should be vetted by those internal to the firm that understand compensation. For that position and with similar if not the same experience, what do white men make? The budget should be that or damn near that number. 
2. When a candidate suggests a number that is below their peers and/or budget, like the scenario above. A part of the job of a recruiter, nay, their responsibility is to explain what similar employees make and advise them to increase their ask. I know what I’m asking for here.
   And I’m sure it sounds wacky or counterintuitive but recruiters are (at best) candidate advocates and recruiters should know what candidates should make. IMHO, recruiters have a moral and ethical obligation to make sure they don’t add to the pay equity gap within their firm and/or life in general.
3. As it relates to job ads, recruiters should include our compensation averages. Ask yourself, why aren’t we more transparent about compensation from the get-go? What are we hiding? Well, it’s an unraveling of years of poor hiring ideology that helped create the pay equity gap.
   Recruiters didn’t help themselves by trying to purchase value and so they should think of transparency as a way for them to right some of the pay equity wrongs of the past. “This is the job, this is what employees in our firm make that do the job. We want to hire you on a level playing field.”  

Yeah, it’s hard.

I know some of what I’m asking for is hard because it goes against our training, our experience, what hiring managers or HR want from us.

But dammit, if recruiters want the pay equity gap to shrink in their lifetime then they have to do something to change it. Wishing it away simply won’t work. They must work differently, expect more out of themselves, and fight like hell to challenge the status quo to fix the pay equity gap. 

Recruiters are literally on the front lines where pay equity is decided. Recruiters are partially responsible for why the gap exists AND recruiters can change the pay equity gap with changes in their mindset and their approach.

The choice is theirs, they can bitch and moan about the pay equity gap or do something about it. 

As always, please let me know what you think in the comments below or however you feel like it, err, the Facebooks, Twitters, and LinkedIns.

Thanks, William

Authors

William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.