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How Organizations Can Address Gender Pay Gaps with Transparency

Wage Parity, Gender Pay Gap, Compensation Legislation...

Society has changed, and the responsibility for financially supporting a family have shifted from one-income families, to two-income models.   Even with two incomes, many studies reveal that couples strongly participate in giganomics, or a small, part-time business to supplement household income.  In today’s global economy, it is rare to find a household that operates based solely on one income source.

More than sixty-years ago, it was common for the head of the household (the male) to be the independent income for the family.  As such, a moral code was established unofficially, that saw businesses pay men more money.   After World War II, as women entered the work force to aid in the war effort, the industrial world changed, and women embraced the idea of working outside the home.   Naturally, they were still paid less money (even for jobs of equal demand and performance) because the income a woman earned was deemed to be “extra money,” instead of necessary for the support of a family.

Today, single women and single mothers, middle aged divorced women, and female seniors returning to the workforce are confronted with one issue that unites them; wage parity.  And even though worldwide, gender expectations and cultures have change, women face the same uphill battle to achieve equal pay, for equal work.

How Big is the Gender Pay Gap?

According to the Institute for Women’s Policy Research, which updates female wage statistics globally on an bi-annual basis, women in 2015 earned only 80 cents for every dollar earned by a man, indicating a global disparity of 20%.  Other interesting data revealed by the 2015 review included:

  • that the comparative gender wage gap for full-time, year-round (non-seasonal) workers was higher, at 20.4% difference between male and female salaries.
  • that statistically, the wage gap has not improved measurably since 2007.
  • that women’s median earnings in 2015 were $40,742 versus $51,212 per annum for men, in similar positions, with identical education and experience.

It is important to note that if the gender wage gap continues to progress at the slow rate of improvement it has demonstrated within the last ten years, that women can expect to reach wages at par with their male colleagues (statistically) by the year 2059.

The Correlation Between Flexibility and Low Paying Jobs

Women who are career professionals may, at some point, need to reprioritize their work schedule for child or elder care needs.  While men are equally capable and qualified to take parental leave, we know that in most cases, it is women who provide home care for family members, old and young.   And this necessity of life is mediated by compromise that a female profession is forced to make, many times, in terms of remuneration and career progression.

Understanding that women may (because of family care obligations) be required to have more flexibility than the average 9 to 5 schedule, many women take a leave of absence from their careers, or agree to part-time work, to successfully meet short-term family needs.  That is not to say it is the case for every female professional, but the Families and Work Institute and the Society for Human Resource Management reported that less than 1/3 of part-time workers are offered paid vacation time, sick days or flexible vacation days that can be used for caregiving or medical needs.  From 2007 to 2015, the number of women who combine multiple part-time jobs to create the flexible schedule they need for family caregiving has risen 11%, with nearly twice as many women (17.7 million) working part-time in the United States, then men (9.8 million).

Interestingly in other countries including Britain, Germany and the Netherlands, full-time workers can request to be shifted to part-time work (based on family needs) without losing their job or their progression in their career.  There is no need to take an absence completely from a quality employer, or a job they love in The Netherlands, where parents (including fathers) can work part-time schedules when needed, while retaining benefits and paid time off.

Four Ways Employers Can Address Gender Pay Gaps

The loss of valuable female employees due to family needs and circumstances, coupled with the resentment that many female professionals (of equal skill, education and productivity) can be stifling to the growth of any organization.

Here are five ways that progressive employers can openly address gender pay gaps, and provide support to women in the workforce:

1. Add Flexibility to Your Work Plan

Would it surprise you to learn that most women will inquire on flexible accommodations, including the opportunity to “work from home” periodically, paid medical and family vacation days, and other criteria before applying for a job?  To remove the obstacle of absence for caregiving in terms of hiring, add it as an incentive to attract (and retain) talented female workers.

2. Start at the Entry Level

In the technology industry, a recent study revealed that female workers began almost at par with their male colleagues.   However, the same study also reported that over time, the wage gap between technology professionals of the same experience, title and performance level widened.   Start from the beginning, by laying out equal pay expectations for entry-level applicants.

3. Create a Salary Ladder

While being 100% transparent about private earnings and salary are not always possible (or advisable in most organizations), having a formally drafted salary ladder helps communicate expectations, and potential earnings, based on service, education and other criteria.   Dispel some of the mystery involved with pay determination, by showing employees what they can expect, while encouraging professional development to access higher pay levels within the organization.

4. Keep Communication Open

Nothing stifles productivity like the resentment felt by any worker who feels they are being compensated in an unfair, or uncompetitive manner.   Allow for career coaching and EAP resources that help employees plan their career trajectory, and invest in continuing education to help improve performance, and allow employees to grow with the organization.