5 Ways to Fix the Gender Pay Gap

Despite rules around equal pay for equal work, the wage gap persists. Here’s what companies can do to change it.
gender pay gap

The Equal Pay Act of 1963 guarantees employees make the same amount for equal work, regardless of sex. Despite this law, as of 2016, women still earn 79 cents to every dollar earned by a man, according to the Joint Economic Committee of the United States Congress.

Many complicated factors contribute to the gender pay gap, most of which are not intentionally discriminatory. Still, many women feel that a social injustice is at hand, which has sparked widespread protests such as the January 17 global Women’s March and the March 8 “A Day Without A Woman.” According to the Women’s March website, the March 8 event is “recognizing the enormous value that women of all backgrounds add to our socio-economic system — while receiving lower wages and experiencing greater inequities, vulnerability to discrimination, sexual harassment and job insecurity.”

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One major area of vulnerability for women is around company support once they start a family. Women tend to drop out of the labor force once they have children, creating more unemployed mothers than fathers. In 2013, the unemployment average for mothers with children under 18 was 7.3 percent, compared to 4.9 percent for fathers, according to the U.S. Department of Labor.

Here are five ways business leaders can work toward mending the gender pay gap:

  1. Provide paid leave and subsidized or on-site childcare. Outdoor clothing retailer Patagonia Inc. provides four months of paid leave to new mothers and three months to new fathers, according to Chris Mason, Patagonia’s senior director of talent. The Ventura, California-based company emphasizes both men and women in parenthood because “in order to support the women and help them get back into work, you also need to be just as strong on getting the fathers involved,” he said. Along with paid leave, the company has on-site childcare at its headquarters and another location in Reno, Nevada. The Ventura location has between 100 and 150 kids at any given time, and Reno receives about 30 to 40 kids. The oldest cutoff age for the two locations is around kindergarten age, but summer camp is also offered to elementary-age children. This offering allows parents to be with their children more, as well as allow for family to be part of Patagonia’s culture. Mason had a child in the program for about a year. “For the first time as a father, I didn’t feel disconnected from my kids in the traditional way I’ve been in my career,” he said. These benefits resulted in lower turnover for the company; only one woman in 10 years didn’t return from leave, which Mason said was unheard of in his previous corporate jobs.
  1. Improve the culture around flex work policies. Although many companies offer paid leave, workers are often hesitant to take advantage of it. Especially in occupations where long working hours are the norm, employees fear being penalized if there is perception that they are less loyal to their employer. “This becomes material levels of penalty, as well,” said Youngjoo Cha, associate professor of sociology and affiliate faculty for department of gender studies at Indiana University in Bloomington. “Those people who are working long hours tend to be more rewarded with plum assignments and promotions and better wage growth.” Flex policies are meant to retain workers and gain more top-tier talent, but it defeats the purpose if not many people take advantage of it, Cha said. Thus, high-level support is the No. 1 factor of why workers may or may not use the paid leave and flex work policies. “It’s really important to have this higher-level management endorsement about these policies that ‘these policies are there for all workers, and we really encourage you to use these policies,’ ” Cha said. Some managers do just that. Andee Harris, chief engagement officer at HighGround, an employee engagement software company based in Chicago, tells her workers when she leaves the office to spend time with her family. “I think it’s important for the people who work underneath me — both men and women — to know that I do take time off to be with my kids,” she said. “I think it’s important that managers set that example for the people who work for them so that they feel that then they can own it.”

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  1. Improve performance reviews and feedback. Cha said unconscious bias is rampant in the workplace, particularly when it comes to performance reviews, as men and women’s performance sometimes receives different types of evaluation. “It’s not that everyone has a sexist mind, but in some ways these biases are operated at the unconscious level,” she said. An effective strategy is to increase accountability in performance evaluations by setting up criteria upfront and having a third party monitor the process. More specifically, women tend to receive vague feedback, without specific actions they did of value or how their accomplishments impacted the business, according to Harvard Business Review’s “Research: Vague Feedback Is Holding Women Back.” Such vague feedback correlates to lower performance ratings for women. “If reviewers do not specifically call out where women excel, where they need to build skills, and which technical projects they should target next, women are at a subtle disadvantage for promotion,” the article said.
  1. Use transparency around pay as a tactic for pay equity. At data analytics company SumAll, transparency around pay helps remove the question of gender-influenced pay, according to Fast Company’s “A Definitive Strategy To Eliminate the Gender Pay Gap.” And the company’s CEO said that no employees have expressed concern around their wages being public. Buffer, a company specializing in social sharing, took this a step further by publishing both salaries and the formula used to reach them. The company says this leads to pay equity and removes salary negotiations from the table. Negotiations are a tricky topic, as research found that women ask for negotiations less frequently than men to (7 percent, compared to 57 percent), according to “Lean Out: The Dangers for Women Who Negotiate,” from The New Yorker. Furthermore, studies found that women would be penalized for attempting to do so, thus contributing further to the pay gap. “Often, leaning in has an even worse effect than saying nothing,” the article said.
  1. Evaluate recruiting practices. These efforts for pay equity can start before the employee even gets to the company in the form of how its job descriptions are worded. Certain words imply a more masculine or feminine role, which impacts who applies, said Harris. Also, it helps to evaluate what is really needed for the job. If a company posts that a job is 80 percent travel, that will deter people with families from applying, particularly women. Harris suggested questioning how much travel is actually needed. If the job really requires closer to 50 percent travel, that will open the role to many more women. These practices help retain talent and reduce turnover. Also, if business leaders signal that the company cares about employees of all groups, it’s a good talent acquisition tool, Cha said. “To get the best people out there, you need to have something that is attractive to that workforce,” she said.

Lauren Dixon is an associate editor at Talent Economy. To comment, email editor@talenteconomy.io.