I’m passionate about pay equity. I think this started with me being a fan of underdogs. Somehow I relate to them on a personal level or their stories are really touching my heart. When it comes to pay; equity is critical.
Relating that instinct to my profession, there comes the pay equity. In a more specific way; gender pay. I don’t think the value of effort, time and experience should be limited by a physical, mental or social categorization. Gender being a major one and unfortunately it’s been used for segregating the workforce for decades (or even centuries!)
How can we close it?
Here are my thoughts after working on a lot of those projects. I tried to list them down and also give some sort of explanation for each.
1. Everything starts at hiring
I studied engineering and worked specifically a lot in the field of process management. While building processes, there’s a key element and it’s the most obvious one: input (or prerequisites) – If you think an employee’s life cycle in an organization as a process, their hiring is the input. Now, also remember that famous quote: “garbage in, garbage out”
That exactly applies to gender pay gap. We should clear the hiring decisions and eventually compensation packages free from a potential bias around gender. Scientifically proven, female candidates provide a lesser amount of current compensation data and have less tendency to negotiate for higher compensation.
Companies should avoid lowballing offers and take the advantage of (lack of) these actions.
If you pay a certain amount for a job, it shouldn’t be influenced by the current status of the candidate.
2. Workforce distribution matters
Well, the chances you dominate the statistical outputs as a minority is pretty low. If you even do, then you are the one who’s skewing the data anyway.
In that case, having an as equal as possible headcount distribution by gender is important. This would ensure that median pay is more standardized and impact the overall rates in an equal importance (or weighting).
3. High paid jobs shouldn’t be dominated by one gender
This is unfortunately the truth in our current society. At least speaking for the last 3 or 4 decades, most of the highly paid jobs, e.g. Engineering, are dominated by male workforce. This is also closely related to the point 1 above. STEM education is more favored by male students and we see almost a handful of women studying engineering in each class year compared to tens or maybe hundreds.
I can clearly remember that my class year in my university had only 4 women vs. 200+ men. We simply cannot talk about equity where the stakes are not equal at all.
4. Your boardroom should be the example
This is also a little bit related to the above. In the basic organizational design, the compensation will be directly correlated with the hierarchy – which makes sense; no questions on that.
The issue is though who is taking those seats up at the top? If your C-level is male dominant technically speaking there’s almost no way that you can talk about pay equity. Think about the Pareto Rule: 20% of the highest paid people will skew the data with 80% dominance. If your highest paid employees, aka your C- and executive level is male, then there’s already a pay gap created among both gender. The only way to overcome that is you have a diverse boardroom.
I think these four major factors are quite important in influencing the gender pay in our organizations and also in our society.
Promoting STEM education for the female students, giving them more opportunities in the workforce, treating them in a bias-free way during key touchpoints (hiring, promotions, transfers etc.) in their employee lifecycle will definitely helps us close this pay gap. It’s not easy, not something we can solve overnight but with a proper planning and strategy, it’s possible – and when that happens we will then talk about a developed society.