The U.S. gender pay gap is narrowing at a glacial pace. Here's what your company can do to bridge that gap faster and build a stronger, more diverse workforce - by ensuring fair pay for all employees:
The gender pay gap is real, and it is not closing quickly. According to the Institute for Women's Policy Research (IWPR), the earliest amiable data was collected in 1980, when women earned 64.2 percent of what men earned for the same work. The most recent figures show that by 2016, the gap had closed to 81.8 percent, but only 2 percent of that growth occurred between 2007 and 2016. At the current rate of growth, the gap is not expected to close until 2059.
The gap is even more staggering for women of color. Today, African-American women make 60 cents and Latino and Hispanic women make 55 cents for every dollar paid to a white man. In total, the gender wage gap is 2.5 times larger than wage gaps in other industrialized nations.
Why You Should Care About Fair Pay
If you want to be a bridge builder for fair and equal pay, you must understand how wages tie to job satisfaction for all genders. According to PayScale's Employment Engagement study, fair compensation is one of the biggest factors that contributes to job satisfaction. The way employees feel about their company's compensation policies has 5.4 times the impact on satisfaction than their actual pay rate. Three-quarters of people who say they are paid at or above market value report high satisfaction levels.
Job satisfaction is important because it speaks to retention. Both men and women who feel they are not compensated fairly will eventually seek new roles with companies they do believe pay fairly. If a business continues to lose talent over pay, it becomes difficult to attract strong candidates and it will impact organizational success over time. Moreover, if word gets out you seem to pay men and women differently, your company can face a difficult trial in the court of public opinion.
Price Jobs, Not Candidates
If you want to be known as a company that is working to close the pay gap, price the job, not the candidate. Set salary ranges for every job and document expectations for the skills and experience you require for the low, middle and high end of that range. Finally, apply those standards equally to all candidates. Make those ranges and expectations public to promote transparency, and to allow employees to see what they must do in order to move up and earn more.
Commit to Fair Parental Leave
Research shows the gender pay gap widens when people reach their late 20s to early 30s which is when many women choose to have children. Many mothers take time off, reduce their hours or even quit their jobs to raise their children.
Commonly referred to as the "motherhood penalty," many women see their wages stagnate or even become reduced as men see their wages steadily increase. One study found that women's earnings decrease 4 percent for each child they have, while men's earnings increase 6 percent over the same timeframe.
Leaders who are committed to closing the gap should consider policies that benefit both women and men. This includes allowing paternity leave so fathers can take time with a newborn child, putting less priority on hours logged in the office, and providing some sort of child care subsidy.
Cultivate a Gender-Diverse Management Team
Organizational leaders have the biggest influence over raises and promotions. Take an audit of your organizational leaders from middle management on up. It is likely you'll notice fewer women the higher up the ladder you go, which indicates a systemic problem within the organization.
Having women in positions of leadership shows other women they have a future within your organization. It also ensures that women will contribute to conversations about starting pay, raises and promotions, helping to prevent unconscious bias that can creep in among homogeneous groups of men.
A formal management training program can be a great way to recruit from within, allowing women to see they have a clear path up the ladder with your organization. Set targets for diverse new classes of trainees, to show you are committed to improving gender representation among company leaders.
Correct the Problem at the Root
Gender pay gaps begin with the hiring process. However, it can take time to correct the systemic and cultural issues that led to the gap in the first place. If it were easy to close the gap, there would be no issue today.
A recruiting partner can help you level the compensation playing field. Recruiting and staffing firms regularly collect market data on the industries they serve, and they can help you set appropriate ranges and make competitive offers.
Staffing firms can also help you attract a more diverse candidate pool and ensure non-discriminatory hiring practices, so unconscious and unintentional bias does not creep into the process. You won't close the gender gap overnight, but with the right approach and the right staffing firm on your side, you can become a bridge builder.
Disclaimer: This article is intended to serve as a general guide only and does not provide legal advice. If you need legal advice, speak to an attorney who is licensed to practice law in your area.