Despite some progress in recent years to eliminate rampant sexism and gender stereotypes from the workplace, many elements of gender inequality remain. The lack of true pay equity is perhaps the biggest disparity still being fought, and it exists across racial and ethnic lines as well.
Fixing, or at least narrowing, the U.S. gender wage gap will take time and continued effort by government officials, as well as influential groups like the U.S. Women’s Soccer Team. But as an HR leader, you can make a difference within your company. With the right plan, you can develop a salary structure for your organization that compensates employees of all genders and races equally. Here are 4 essential practices for achieving this objective:
1. Stick to the facts
Individuals on either side of the equal pay debate may let emotion and rhetoric get in the way of compromise and progress. Don’t let yourself fall into this trap. To support your case, simply rely on hard facts that illustrate the current wage gap:
- According to the Economic Policy Institute, American women earned around 22% less than American men in 2017. PayScale noted that the gap shrunk slightly between then and now, coming in at 21 percent for 2019, or 79 cents earned by women for every male dollar. (These disparities refer to all women, regardless of factors such as education, job type, age, location, race and ethnicity.)
- When you factor in race, ethnicity and qualifications, the picture changes slightly:
Black and Latina women receive 74 cents for every dollar earned by men across the workforce – the “uncontrolled” pay gap.
Black working women earn 97 cents on the male dollar when qualified and employed in roles also held by men (the “controlled” gap) while Latina professionals earn 98 cents.
White women earn 80 cents on the male dollar overall and 98 cents in jobs identical to men.
Only Asian women earn more than men in any context, with a $1.02 wage for every dollar earned by identically qualified and employed men.
- The American Association of University Women points out another way to illustrate the U.S. pay gap: the ratio between women’s and men’s annual median salaries.
In 2017, women working full-time and year-round earned a median $41,997 as opposed to the $52,146 median of men. That’s an 80% earnings ratio – nothing to sneeze at.
- Even though the Equal Pay Act of 1963 was passed by the Senate, the onus of enforcing equal pay falls on state governments instead of federal agencies, per the AAUW. Some states, like California, New Jersey, Massachusetts, Illinois and Maryland, have comprehensive equal pay regulations. Other states, like Alabama and Mississippi, don’t enforce equal pay protections in any way.
To provide a genuinely beneficial policy – and avoid running into compliance violations in the future – all of the above must be considered when crafting a strategy for equal pay.
2. Look beyond wage adjustments
In theory, the simplest way to equalize pay across gender and ethnic lines would be to collect payroll and performance data, identify disparities and correct them. But – as you may have guessed – acting on what you find won’t necessarily be that easy. Although raising wages won’t hurt, fully correcting any pay gap will require measures beyond salary adjustments. You might, for example, need to update your employee benefits package to include paid family leave, child care and reproductive health care, per recommendations from the National Women’s Law Center.
Whether your organization lacks these benefits or only offers them on a small scale, adding or improving them represents a large step toward balancing the scales. According to Forbes, numerous major corporations have heeded the NWLC’s advice. Citigroup, Apple, Amazon, Google, Starbucks and Salesforce, among others, have pushed for greater gender equality in the workplace by way of more inclusive benefits.
If your company is not in a position to enact such sweeping changes, you can start by creating a payroll distribution plan scaled to fit your workforce by using an efficient enterprise HR solution.
3. Establish a clear policy
Instituting fair pay takes more than adjusting compensation and benefits. It’s essential to clearly document and communicate any changes in a concrete policy that all employees can understand, according to the Equality and Human Rights Commission:
Pay equity guidelines must define all economic language involved, outline each aspect of salary and benefits adjustments and include any notices or stipulations necessary for compliance with state and federal regulations. Also, they should clearly state that they’re correcting legitimate wage inequalities and aren’t unfair to anyone.
Ensure your new policy is easily accessible. In addition to any printed materials you may circulate and/or distribute internally, make sure to post the policy online using your HR portal or company intranet.
4. Conduct regular reviews
Inequality of any kind rarely – if ever – disappears due to a single policy change. A shift in your overall corporate culture is necessary. So is consistent evaluation of staff salaries and implementation of meaningful updates to reflect regulatory or societal changes. Even after you establish equal pay, wage disparity and other forms of institutionalized discrimination can still find their way back into your organization if you stop looking for them.
Be sure to schedule and carry out reviews of your pay equity policies at regular intervals – and also examine gender and racial equality on a broader scale throughout the organization. Doing so will go a long way toward mitigating the potential for resurgent inequality. The disparities you find in your audit can then be quickly spotted and adjusted accordingly.
PeopleStrategy’s HR solutions can be invaluable to these policy review efforts by capturing demographic, performance and compensation data for all employees. The platform’s integrated analytics and reporting capabilities allow you to comprehensively evaluate compensation of staff members who hold the same position or work in the same department. You’ll quickly spot any discrepancies across race, gender or other identifying characteristics. Use this info to determine what went wrong – or right – with your initial pay equity policy, and, if it didn’t work, you’ll understand how to rectify the issue.