7 Ways to Tackle the Gender Pay Gap in Your Company

International Equal Pay Day occurs on September 18th each year, with the goal of highlighting pay discrepancies between men and women. Around the world, women generally earn around 20% less than men. Gender pay gaps can also occur within organizations, even when your organization has a commitment to equality.

So, as we approach International Equal Pay Day, it's a great time to think about pay equity issues in your organization—and what you can do about them.

Current state of the gender pay gap

According to the latest Department of Labor research, the gender pay gap is about 84%. In practice, this means that for every $1 a man earns, a similarly qualified woman earns $0.84. 

Breaking those figures down, we see some interesting facts:

• Most of the pay gap is due to differences in occupations and industry. Jobs associated with women are paid much less than jobs predominantly associated with men. However, the gap still exists within job categories—female lawyers earn 17% less than their male counterparts.
  
  
• Race intersects with gender pay issues. White non-Hispanic women earn 20% less than men of the same demographic. Latina women earn 42% less than White non-Hispanic women, while Black women earn 31% less. 
  
  
• Employers face legal issues related to discrimination. In 2022, the EEOC and DOJ handled $200 million in actions pertaining to gender-related discrimination in the workplace. This is the tip of the iceberg, as it doesn't include disputes settled informally. 

Pay equality was moving in a positive direction from the 1960s to the 1990s but seems to have slowed down in recent years. According to Pew Research, “progress toward narrowing the pay gap has all but stalled in the 21st century.”

For employers who want to take action, it's important to understand why this gap exists in the first place. 

Why does the gender pay gap exist within companies?

Many leaders find it hard to believe that their organization could have a gender pay gap. After all, you have an EEO policy, a clear salary framework, and an inclusive organizational culture.

But pay equity issues can persist, even when you have the best of intentions. Some of the most common blind spots include: 

• Bias in hiring and promotion: Hiring processes can sometimes be biased against certain types of candidates. For example, an all-male hiring team might lean towards choosing a male candidate. The same can happen when choosing promotions and leadership development candidates, ultimately keeping women out of higher-paying jobs.
  
  
• Parenting responsibilities: Women are generally responsible for most childcare duties, which can affect their ability to be present at work and make the most of opportunities. To make matters worse, some organizational cultures discourage fathers from taking time off for parenting duties. This leads to a greater imbalance in parenting responsibilities, which puts more pressure on women to neglect their careers.
  
  
• Workplace flexibility: As women generally have more caring duties, that leaves them having to juggle work and home life. If an employer is inflexible about policies such as working hours and remote work, it leaves the employee in an impossible situation. Often, the only solution is to switch to part-time or leave the workforce entirely.
  
  
• Salary structure: Contrary to popular belief, women are actually more likely to negotiate salary offers than men. Despite this, women tend to end up in the lower range of the salary structure, while men tend to receive the maximum salary for their role. Without oversight, this can lead to women being consistently paid less than their male colleagues.
  
  
• Disproportionate effects of major events: In the past 20 years, our economy has experienced several shocks, such as the 2008 financial crisis, the 2020 Covid pandemic, and the 2022 cost of living crisis. The recoveries from these shocks have been uneven, and many female professionals are still struggling to get their careers back on track. 

Many other factors lead to pay inequality, such as organizational culture and weak HR policies. It's a complex problem with many root causes, so you'll need to respond with a multi-pronged action plan.

7 tips for addressing the gender pay gap

Here are some ideas for actionable strategies that can help promote pay equity within your team.

1. Conduct a pay audit

An audit will help to reveal the current state of play and identify any inequalities. If the data shows a discrepancy in pay between women and men, the leadership team will need to review the entire salary structure and look for ways to normalize pay scales.

Accurate job descriptions are essential here, as you'll need to make like-for-like comparisons between roles. Work with your HR team or compensation consultants like us to develop a precise understanding of the responsibilities and skills required for each role. It's also important to look for clustering—you might find that men dominate high-paying roles, while female employees are gathered in lower-paying positions. 

2. Consider pay transparency

Pay transparency can help improve equality, as it allows people to understand what's a fair price for their contribution to the organization. This empowers people in salary negotiations, which stops people from accidentally lowballing. Another advantage of pay transparency is that it encourages trust in your organization. Employees can see your progress toward pay equity and fairness. 

3. Explore flexible working options

Flexible working is the most empowering benefit for parents and caregivers. Remote work is especially beneficial, as it eliminates commuting while allowing employees to stay close to their family during the day. This makes it easier to deal with emergencies, spend time with dependents, and manage the work-life balance. 

Other popular options include flextime (allowing people to set their own hours), windowed working (asking people to break their workday into two separate shifts), and compressed working weeks (a full working week squeezed into three or four days.)

4. Encourage mentorship programs and Employee Resource Groups

Women thrive when they have support from other women. Mentorship programs are a great way for people to network, share career advice, and learn from others who’ve gone through similar situations. Mentorship doesn't require a huge investment - even meeting for coffee can be helpful. 

Employee Resource Groups (ERGs) can be an excellent source of mutual support. ERGs can also act as a voice for employees, allowing leaders to get feedback about their ongoing Diversity, Equity and Inclusion efforts.

5. Review your hiring process

Inequality often begins at the hiring stage. Even the phrasing of your job listing can have an effect. One Harvard study found that women are more likely to negotiate salary offers if the job ad includes the words "salary negotiable". Otherwise, men are more likely to ask for an improved starting offer. 

It's also important to include women in the hiring process, especially during the interview stages. Diversity can help to overcome Ideal Candidate Bias, which causes interviewers to favor candidates that resemble themselves. Biases like these are often unconscious, which is why it's important to have a diverse panel of recruiters. 

6. Support caregivers

Caregiving is one of the main pressures on career development for women. Whether it's parenting or tending to a relative, women often do the lion's share of this work. Employers can help by offering benefits such as maternity leave, parental leave, flexible working patterns, and caregiving benefits. 

It's also important to encourage a culture that supports all caregivers. For example, make sure that fathers know that their careers won't suffer if they take parental leave or rearrange their schedules around childcare. This kind of culture will make it easier for families to balance their schedules and find solutions that suit everyone.   

7. Set firm DEI goals

Having a DEI program is a great start, but you need to measure the outcomes. Some of the key DEI metrics to watch include: 

• Pay equity: Employees in comparable positions receive comparable pay
• Professional development: Equal participation in career development initiatives
• Leadership representation: Strong representation at senior level and in leadership development programs
• Team balance: Positive hiring rates for female candidates and inclusion in individual departments
• Employee/candidate feedback: Survey results on candidate experience and organizational culture

Your DEI team should meet regularly to measure progress and see that you're on track. 

Eliminate the gender pay gap in your organization

Growth depends on having the best people on your team. Inequality tends to drive away candidates—around 50% of people say they consider DEI when applying for a job. An inclusive culture will attract those people, and it will earn their loyalty when they join your team. 

But tackling the gender pay gap isn't easy. It requires a dedicated team of HR professionals who can help steer your company in the right direction.

Speak to Helios HR today about your compensation needs. Let's talk about how you can create a thriving culture that makes people excited to be on your team.