Starting with the Equal Pay Act of 1963 — prohibiting employers from paying men and women differently for doing the same job — women have been making progress towards gaining equality in the workplace, albeit very slowly. In 2009, President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law and encouraged businesses to pledge to identify and promote best practices to close the national wage gap.
From the time that wage data was first collected in 1979 to 2000, women’s-to-men’s earnings ratios went from around 57.6% up to 71.9%. Today, women make an average of 82 cents on the dollar compared to men, so there is still plenty of progress to be made, but awareness has been increasing in recent years and has led to the most recent trend of pay transparency laws.
Laws range from disclosing salary or wage information upon request (Maryland) or after an offer of employment (some cities in Ohio and Washington state) to providing salary or wage information in job postings (Colorado). Many other states are considering implementing similar laws.
At face value, pay transparency is a good thing for applicants — they can immediately tell if a role is within their salary/wage preferences and know what to expect when it comes down to the pay discussion. For current employees, they know the pay range for the role and how that compares to other, similar roles. Many consider this to be an important step towards pay equality across an organization. It can also save hiring managers and recruiters time because they aren’t wasting time with candidates who will ghost or bow out of the process due to misaligned pay expectations.
“When Colorado first passed this law, I was nervous that my job was going to become even more difficult,” admitted Patricia Ellis, Talent Acquisition at TalentReef. “But I quickly realized that it actually made my job easier because I only spoke with candidates that understood the salary range. I’ve found that being transparent with salaries has made recruiting easier.”
Where it can get difficult for employers is determining a meaningful range. For example, if the law requires a hiring manager to include a low and high end, it has to be aligned with the experience and skills required for the role plus what the market demands. Research may be necessary to determine what is fair compensation for the role.
“When determining the best salary range for an open position, we use a few different sources: the manager who is doing the hiring and is an expert in the industry, what other companies are listing in their job descriptions for similar roles, and the Radford Global Compensation Database to determine a good range,” explained Ellis.
At the end of the day, employees who are paid fairly are more committed, resulting in better job performance*, higher morale, and ultimately stay at the company longer.
So what can a company do to help close the pay gap? Here are our top four strategies.
4 Strategies to Help Close the Pay Gap
Measure and Assess Pay Gaps
The number one thing you can do to close the wage gap at your company is to adjust inequitable salaries for the people already working there, and continue to monitor and evaluate regularly.
“When I walk into a new company, one of the first things I do is get a payroll schedule,” said Rich Crawford, CEO of TalentReef, who has also served in numerous senior executive roles across a range of high-tech firms, including SambaSafety, CSG International, Telution, MediaLinx, and Channelinsight. “I look for what we’re paying people and how we’re paying men vs. women to make sure there’s no bias. You have to work hard to eliminate something that has happened in the past, but it’s important.”
He adds that this evaluation helps in today’s market, for example, because if you don’t have competitive compensation, people won’t even apply and will just move on to the next option.
Hire Diverse Leaders
By implementing and promoting gender-inclusive policies like maternity and paternity benefits and a flexible work schedule, you may attract more diverse applicants. A more diverse leadership team offers a wider range of experiences and perspective that result in better decision-making. It also allows employees to see themselves reflected in the leadership team.
Promote Fairly
Train managers to be aware of gender bias and ensure there are clear and consistent criteria in place for reviews and promotions. Regularly audit reviews and promotions to ensure that men are not being promoted faster. Make sure that women have equal opportunity to mentorship and career training and aren’t responsible for all of the “office housework,” i.e. organizing team events.
Encourage Women to Negotiate
Women are often given negative feedback when they attempt to negotiate, so create a workplace where it is not only acceptable but it is encouraged for women to negotiate raises and promotions. Consider setting up a training opportunity or workshop on helping the women at your company fine-tune their negotiation skills or build their confidence in this area.
*Peggy Cloninger, Nagarajan Ramamoorthy, and Patrick C. Flood, “The Influence of Equity, Equality and Gender on Organizational Citizenship Behaviors,” SAM Advanced Management Journal 76, no. 4 (2011): 37–47.