How to Close Your Company’s Gender Pay Gap
It’s quite shocking that women are still underpaid compared to men. It’s a problem that is deeply ingrained in our society and burdens even the most talented and accomplished females. Fortunately, more and more companies are saying enough and creating plans for eliminating their pay gaps.
In this guide, you’ll learn how your company can uncover and resolve pay disparities so every employee is treated fairly and equally.
Gender pay gap: Real or a myth?
There are plenty of statistics that shine a light on the severity of the gender pay gap in the United States. One of the most telling is women make about 79 percent of what their male counterparts earn. To put things more in perspective, an individual female stands to lose out on nearly a half million dollars throughout the course of her career. Even with growing awareness around this issue, progress is slow. Gender income inequality won’t be eliminated from our society until 2059 at the current pace.
Some people question the validity of these statistics and even claim the gender pay gap is a myth. That’s an overstatement. The data overwhelmingly points to income inequality being a real problem.
Facts we can all agree on
Even if you question the accuracy of these commonly-shared statistics, there are a few gender pay gap facts we should all be able to agree on:
- It has existed since women entered the workforce and lives on in some form today
- It affects women in every occupation and industry.
- It persists despite females outpacing males in education (about 60 percent of college graduates are female).
Equal pay is the right thing to do
Every employee deserves a fair salary. Workplace equality should be your company’s primary motivation for closing its wage gap. But doing the right thing also has other advantages:
- Avoid legal action and embarrassing PR. Businesses can be sued for underpaying an employee due to their gender. Given what a hot topic income inequality is, a lawsuit over equal pay can stir up a public relations nightmare.
- Attract and retain top talent. Fighting an internal wage gap shows your company cares for its employees. Good people are attracted to good companies.
- Establish a culture of trust. Committing to equal pay will help employees and potential customers form a favorable view of your business.
- Help strengthen the entire economy. Females account for 83 percent of consumer spending. Improving wages for women helps grow our entire economy.
Identify your company’s pay gap
Closing your company’s gender pay gap starts with determining who is underpaid and how it happened. Assemble a team of women and men with different professional backgrounds and assign them the task of identifying what internal factors contribute to income inequality. Include people from HR, legal, finance, and other departments so your team members have diverse skills and perspectives. The team should explore the following areas of your company:
- Employee compensation
Reviewing the salary of every employee is the most logical place to start. If your company uses modern HR software, it should be easy for your team to segment salaries by position, job level, gender and a number of other factors. They can use this data to identify trends, as well as outlying salaries that are especially low.
Your team should also look at compensation beyond salary, such as benefits, bonuses and overtime given to each employee.
- Diversity in management
Senior employees have the greatest influence over promotions and raises. And males tend to dominate the upper levels of most companies.
Your team should review the balance of men and women at the different management levels in your company. If there are less women the further up the ladder you go, it’s a sign there is a systemic problem.
- Fair hiring practices
Your team can learn a lot about how compensation is determined by looking at your company’s hiring process. For example, a female new hire can end up with unfair pay if your company makes an offer based on her previous wages or aggressively negotiates over salary.
A thorough analysis of these areas of the company can help your team uncover all the different factors that contribute to an internal pay gap.
Break the glass
Once the factors contributing to your company’s pay gap have been identified, you’ll know exactly what needs to be resolved. Some problems will need to be addressed right away and others will take longer to sort out. Here are some tips for breaking the glass ceiling in your company:
- Pay what’s due. Immediately raise the base compensation of any employee who is underpaid compared to an equivalent colleague who does the same job.
- Get females in the C-Suite. If there is a lack of gender diversity in management, set quotas and a timeline for increasing women in senior positions. Keep in mind it can take many years to achieve a gender balance at management and executive levels.
- Recruit the best available. Search for great female employees and leaders and convince them to join your company.
- Train the next generation of managers. Create an internal management training program and give your current female employees a direct path to the next career level.
- Mentor young employees. Pair recent grads with experienced mentors. Accomplished female employees can offer advice and perspective to young women.
- Offer a fair salary. Income inequality follows a woman throughout her career so don’t use a candidate’s past salary to determine what your company should offer. Massachusetts has already made it illegal to ask about salary history in a job interview.
- Don’t force negotiations. Have a fair salary in mind for every position your company hires for. Many people – male and female – don’t feel comfortable negotiating and end up accepting an offer that’s less than their new employer was willing to pay.
- Make your gender pay gap known. Your company will need to come clean about income disparity in order to properly resolve it. Share your plan with your employees and the general public.
- Give regular updates. Share your company’s progress through press releases, blog posts and even a comprehensive website section.
- Create an inclusive culture. Strive to form a culture that is welcoming to people of all backgrounds. Everyone deserves to feel comfortable in the workplace.
Closing your internal pay gap will take a lot of planning and patience. Be sure your company doesn’t lose sight of the goal and lives up to its commitments.
Don’t wait, be proactive
America’s gender pay gap has lived on for far too long but an increasing number of companies are stepping up and committing to resolving their pay discrepancies. Convince the leaders of your company to do the right thing and join the fight for equal pay for all.
If you’re interested in learning more, check out our blog post “Breaking the Glass Ceiling: What Will it Take for Your Company?”