You’ve likely heard women globally are paid an average of 63% less than males for similar jobs. It’s been that way for a long time. Why the gender pay gap matters, however, may be more dynamic than you’ve ever considered.
Let’s take a look.
While the chasm has closed somewhat, there are fewer women in the professional workplace and pay equity is stagnant. In fact, due to the gap’s vastness and the slowness of change, findings from a recent World Economic Forum indicate that the worldwide pay gap will take more than two centuries to close.
Why Pay Equity is Important
In a broad sense, gender pay equity is crucial for economic and societal growth and ability to thrive. Because women could prospectively comprise about half the global workforce, the more women earn, the more they can spend. And that benefits local communities and beyond.
Not Just an HR Issue
No, it’s not just a “personnel problem.” Workplace pay equity is important for us all. Beyond its effect on economies, closing the gender pay gap impacts our whole society. The vast range of stakeholders include:
In a Randstad US study, 80% of women said they’d change jobs if it meant more gender equality, and 49% said they’d quit their job if they discovered that male colleagues in similar positions made more. In addition, 42% said they have experienced workplace discrimination.
Among men and women, 78% said it is important that people in workplaces are treated the same, regardless of gender, age, race, sexual orientation, or religion.
The gender wage gap’s affect on the workplace is far reaching. In fact, it touches a company’s performance, culture and ultimately how much it brings in. And timing is key. Firms that narrow pay gaps now will shell out less than those who put off acting. It follows, then, that companies emphasizing gender pay equity usually have the best performances.
To the point: closing the pay equity gap is good for business. Employees are more involved and motivated when they believe they’re being rewarded fairly and equitably.
Consequently, companies can retain employees, recruit high-end talent, promote good customer relations, and improve employee satisfaction and decision making.
Why is This Such a Problem?
As you can imagine, it’s complicated. But if we look at the root cause, we can see that occupational differences between males and females are themselves impacted by gender bias. Many experts believe there should be much more study of where our economy gives women unequal opportunities, be it in education, training, or career options.
What Companies Can Do to Improve Pay Equity
Organizations that value diversity, equality, and inclusion believe in doing good and doing well, as the saying goes. Such priorities generally contribute positively to bottom lines, as well as workplace culture and satisfaction.
Some steps a company can take can take to foster pay equity include:
- Improve transparency. Provide info on workforce composition, gender wage gap performance, and salaries.
- Remove focus from salary history. Disallow interview questions related to salary history and provide wage ranges when asked by applicants and candidates. Establish and post pay equity practices.
- Study Pay Equity. When merit raises are under consideration, this should be performed each year. Calculate the business value of workers’ contributions.
- Assign Promotion Parity Goals. To ensure equity, examine opportunities and promotions criteria. Companies should also specify the person or department responsible for equitable pay and establish how they will be evaluated.
- Flag promotion decisions. Keep communication lines open with managers about employees’ promotion readiness and feedback employees are getting.