In order to draw attention to the gender pay gap, many nations throughout the world have organized Equal Pay Days. Far from being a time to celebrate, Equal Pay Day shows how far into a new year a woman must work to earn what men were paid the previous year.
For many countries this year, March 24 is that date, meaning that, on average, it has taken a woman that long into 2021 to earn what a man made by Dec. 31, 2020. Another way to look at this grim reality is that women earn about 82 cents for every dollar a man earns. The consequences of this pay difference affect women in every job, from an hourly worker on up to a CEO.
What does the gender pay gap mean?
The gender pay gap (or gender wage gap) refers to the difference between what working women and working men earn. Women consistently earn less money than men across the globe, and the gap is even wider for women of color.
Why does this inequity still exist in 2021? The answer is complex and involves race and ethnicity, disability, access to education, and age. Unfortunately, the pandemic has only served to heighten these following underlying causes:
- Underrepresentation of women in senior roles. Men hold the majority of the highest-paid roles. By the end of 2020, women held only 7.8 percent of CEO positions in the U.S., despite large companies like UPS, Citigroup, Clorox, and CVS recently naming women to head their companies. On a global basis, although women comprise half the world’s workforce and make up the majority of college graduates, they hold only about a fourth of leadership roles.
- Women accept part-time positions in order to care for their families. Women are the ones who are primarily responsible for taking care of their family’s children and any sick or elderly relatives. To juggle these duties, women often accept part-time positions, which tend to pay less and have fewer advancement opportunities. In 2018, 27.1 percent of employed workers in the EU-28 adapted their work schedules to accommodate their childcare responsibilities. More than 80% of these workers were women.
- Women receive lower pay than men for the same work. Although some strides have been made since the 1980s when the wage gap made world-wide headlines, many experts feel that these gains have plateaued in recent years. In the European Union, women earn an average of 14.1 percent less per hour than men, a percentage that has remained relatively consistent over the past decade.
There is greater parity at the lower end of the pay scale because labor market policies often set a minimum starting wage. However, as the salaries rise, so do the discrepancies. According to Economic Policy Institute, women are paid 92 cents on the dollar at the 10th percentile, while women at the 95th percentile receive only 74 cents relative to the male dollar.
- Many women face discrimination. Different groups of women experience different gaps in pay. In the U.S., for example, Black women earn 21 percent less than white women and 38 percent less than white men, according to research by LeanIn. Black women sales professionals make 53 percent less than white men managers doing the same job.
Job discrimination against pregnancy and maternity leave also remains common. According to a U.K. Department for Business, Innovation, and Skills study, 77 percent of working mothers report potentially discriminatory or negative experiences in the workplace.
What can companies do to lower the gender pay gap?
We believe the changes needed to solve the gender pay gap must start at the top – in the board rooms of large and small companies. Here are four key ways businesses can help close the difference between what men and women earn.
1. Create more opportunities for women to attain leadership roles. The best way to achieve this step is by making an effort to recruit more women to leadership roles and then to promote these women from within your staff. Bringing more women onto the executive board is the next step. Not only will this create diversity, but it will boost the bottom line.
A Catalyst.org study found that Fortune 500 companies with three or more women on their boards outperform other companies with 42 percent more return on sales, 53 percent more returns on equities, and 66 percent more return on invested capital.
2. Deal with unconscious bias. It’s hard to fight something without understanding how and why it exists – or worse, denying it exists. The companies that are doing the best in eliminating gender pay inequalities are the ones that are talking about unconscious bias and dealing with how it is affecting their hiring and promoting decisions. One solution to gender bias is to exclude information from job applications that might assume gender, such as names and interests.
Other steps are to set diversity hiring goals. Also, aim for salary transparency so women can develop their negotiation strategies fairly. And examine your company to ensure that career progression is attractive and attainable for all employees.
3. Provide paid maternity leave and child care support. Women need to know that they do not have to choose between their children and their careers. Allow them the flexibility to work from home when their children need them.
Think creatively about ways to nurture and support mothers. For example, if a parent wants to work fewer hours for a time, make sure that part-time work is not full-time responsibility with less pay. Make it clear by communicating to parents that nights and weekends are for family, not for work. Onsite childcare, women’s networking groups, mentoring, and career development are all important to women.
4. Recruit more women into higher-paying sectors and roles. It’s time to change up your recruiting methods to attract more women leaders. Here are four steps to take:
- Replace masculine job description words like “strong” and “competitive” in your job descriptions with more gender-neutral terms like “proven” and “results-oriented.”
- Stress flexibility in management roles.
- Advocate mentorship programs.
- Promote women from within your company
How women can use their leadership voice to ask for higher pay
Researchers have found that deeply ingrained gender roles often lie at the root of the gender gap. In many cultures, girls are encouraged to be accommodating and more interested in the welfare of others than their own. On the other hand, those same cultures teach boys to be competitive and assertive.
As a result, many professional women negotiate assertively for other individuals, such as their employees, but feel uncomfortable speaking up on their own behalf. If the gender wage gap is to close, women must learn to ask for the compensation they want – and deserve.
It works. Every established leader I interviewed on the Rise to Leadership show and podcast raised their voice and asked for higher opportunities. But women need to learn these empowering skills and see them modeled by other women.
Rise and Lead Women is helping to close the gender leadership gap, which will, in turn, help close the gender pay gap. We offer leadership development training and mentorship programs.
Our participants learn to fully understand who they are, the value they can bring to an organization, and how to reach the top leadership slots. Our programs offer the hands-on tools and skills they need to set and meet their career goals.
The work for gender pay equity is far from over. In fact, the pandemic has highlighted the serious problems many working women face as they juggle their work and home responsibilities. To find out more about how Rise and Lead Women can give you the tools to get paid what you deserve, please visit riseandleadwomen.com.