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Why it's hard to close the pay gap and what to do about it

Alex Citrin-Safadi
This story was published on our The Memo from Quartz at Work newsletter, practical advice for modern workers everywhere
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Ever wonder why it’s so hard for your company to close the pay gap?

In part one of our featured article, Amy Spurling, the founder and CEO of Compt, shares 6 challenges today’s executives and HR/people operations teams face:

  • No single source of data from which to pull
  • Internal titles and roles rarely match up neatly against each other or external roles
  • Let’s not forget all the title add-ons
  • They asked, and they received (sometimes)
  • Total compensation calculations aren’t readily available
  • Moving targets

Click here for the full article to build your awareness behind each of these pay gap challenges.



Actions companies can take (you’ll want to take notes)

If the challenges of closing the pay gap have you riled up and ready for action—we’ve got you covered with solutions. Check out part two of our featured article by Amy Spurling, the founder and CEO of Compt.

She gives 6 tactics a company should pursue to close the pay gap, no matter company size:

  • Set annual market rate goals
  • Be realistic about constraints on funds and get leadership buy-in
  • Conduct a pay equity audit
  • Pay attention to promotions
  • Understand variable compensation
  • Create a healthy culture

Read the full article to review the actions companies should be taking. (And create your wishlist to include when you forward this newsletter to your leader.) 😉


Your pay gap bundle—hot off the presses!

For your company (feel free to forward to leadership):

For employees:


10 questions to understand how pay works at your company

“Can I have a raise?” To field this question well, leaders should be able to comfortably answer these ten questions about how pay works at their companies (and it can’t hurt for anyone to understand these dynamics too...hint hint):

1. What is the company’s pay philosophy?

2. Who determines that philosophy (executive team, compensation committee, etc.)?

3. What do we invest in our employees as part of their “total rewards,” such as benefits and bonuses?

4. Do we pay at, above, or below market rates? How does this differ across the organization?

5. When and how often do we give raises?

6. How do we determine what’s allowed for raises across the company—that is, are raises based on revenues, specific company-wide performance goals, or individual goals?

7. When was the last time a job analysis (confirming what the role does) or a job evaluation (confirming what the role should be paid) was done for your department, team, or roles you manage?

Want the last three tips? Read on here.



QUOTABLE

“While there are many factors that influence the pay gap, there are two particularly relevant factors that will cause the pay gap to worsen:
1. The mass exit of women from the workforce in the wake of the pandemic
2. The loss of women in positions feeding into executive-level leadership
Although women hold most of the jobs in industries such as nursing and education, women are still fighting for better wages and rights. HR leaders and professionals can take steps to support equal pay by ensuring that compensation is transparent and posted for all candidates to view. Additionally, employers must pay what they post and train recruiters not to ask for salaries. Asking a potential candidate what they think they should be paid places the responsibility of financial transparency on the candidate rather than on the employer – it is up to the employer to state what the pay will be. Leveling the field in this way helps reduce gender wage gaps when bringing on new employees, but promotions and salary increases will eventually creep into the picture, so establishing consistent criteria will help minimize the pay gap on an ongoing basis.”
LynnAnn Brewer, Director of HR Research & Advisory Services at McLean & Company
“Your manager matters more than you think. According to Adobe’s future of time study, women feel less comfortable speaking to their managers about how uncertainty, like worries about inflation and layoffs, impact their work experience. However, your manager is more important than you think when it comes to maximizing your salary. Recognize when you have a bad boss who is not going to help you advocate for a raise/promotion, and squeeze every drop of opportunity out of a good boss who will sponsor you.”
Sallie Krawcheck, CEO and co-founder of Ellevest, a financial company built by women for women, with the goal of closing the gender money gap

What you need to know before embarking on salary transparency 

How would you feel if anyone who wanted could look up your salary on a public website? That’s the case for the employees of some companies we spoke to for this episode on pay transparency.

Making salaries totally transparent is one potential way to erase the persistent unfairness around pay gaps, like those around gender and race; some countries are even legislating, mandating some level of pay transparency in an attempt to make it impossible to pay people unfairly.

But can knowing too much about our colleagues’ pay actually be damaging to our ultimate happiness?

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YOU GOT THE MEMO

Send any news and comments (and thoughts on the Brene Brown, Adam Grant, and Simon Sinek podcast episodes that spoke to your soul) to aoakes@qz.com.

This week’s edition of The Memo was brought to you by :

🤑 Our Quartz at Work editor, Anna Oakes, who has always asked for more money during salary negotiations (but doesn’t always get it).

🎨 October’s artist-in-residence, Quartz’s own Alex Citrin-Safadi, who is a fierce advocate for getting paid for the work you’re asked to do.

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