By Jenny Herald, vice president of Product Evangelism, Gtmhub
Gender pay disparity is a well-documented issue. Yet on average, women still earn between 2.6% and 21.1% less than men.
While many companies are championing diversity, equity, and inclusion (DEI), gender pay gaps remain a major hurdle to creating inclusive workplaces. In addition to limiting your ability to attract top talent, gender pay disparity affects every aspect of your organization—including its bottom line.
The far-reaching implications of gender pay gaps mean simple human resources (HR) initiatives or compensation reviews won’t address the root of the issue. Instead, to close the pay gap, you need to connect gender pay equity to your company’s business goals and incorporate equitable compensation practices into your strategic plans.
On a practical level, there are several actions your company can take to ensure women receive fair, merit-based compensation.
Audit for potential pay gaps
Gender pay disparity can exist across multiple compensation categories, including base pay, total cash compensation, variable pay, benefits, and bonuses. Understandably, this can make identifying pay gaps in your company challenging.
So, it’s essential to begin with a pay equity audit that collects and analyzes detailed information about your employees, including their tenure, job classification, education, department, and demographics. Then, auditors can perform a regression analysis on data sets for experience, education, and training to identify outliers in compensation based on gender, race, or age. This process helps your company spot inconsistencies in pay practices and identify which criteria of pay decisions are most impactful in creating discrepancies.
If you’re unsure how to structure a pay audit effectively, consider having an auditor perform a test run as a first step. They can use a small set of job roles—one that you think will reflect well on your pay equity practices, one that may not, and a few other selections—and perform a compensation comparison. This should give you a sense of what types of data will be the most important for an audit team to collect and analyze.
Represent gender issues in strategic plans
Closing the gender pay gap can’t be done in a vacuum. Because it affects every employee, it requires a holistic and collaborative approach and must be incorporated into each of your business goals and strategic plans.
After an internal audit is complete, discuss the findings with your entire executive team. Are there any departments that are chronically underpaying female employees? Which teams aren’t experiencing gender pay discrepancies? How has this impacted retention, productivity, sales, and other revenue channels for your business? By understanding where you’re succeeding and falling short, you can connect gender pay equity to business priorities and revenue opportunities to understand the value of investing in female employees and equitable compensation.
For example, gender pay equity should be a key pillar of your DEI strategies to create a more inclusive workplace and improve employee engagement and satisfaction—regardless of gender or identity. It should also be front and center in your recruiting and retention strategies and management training to ensure equity in job offers, performance reviews, promotions, and raises.
Pay equity is about much more than fair compensation. Policies around parental and family leave, your company’s benefits, and remote and hybrid work arrangements should all be considered, as they impact women and pay equity across your company. At Gtmhub, we’re not only concerned with gender pay equity but also global pay equity.
We ensure all team members around the world are paid at competitive market rates for their geographic region. For instance, as part of our mergers and acquisition strategy, we review the salaries for all acquired employees and make adjustments where necessary to ensure every Gtmhub employee is in the appropriate range for their market. As we head into 2023, we’re focusing on clearly documenting our compensation philosophy, reviewing our parental leave policy, and updating our promotion and merit pay process as part of our strategic plan to achieve greater pay equity.
Set effective goals to reduce gender pay inequality
These goals help close the gender pay gap if they are objective, measurable, and transparent. It can feel like an overwhelming task without a detailed course of action. But by using a goal-setting framework, you can create a realistic, actionable plan that holds decision-makers accountable. Some of the most popular and successful methods include backward goal-setting, key performance indicators, and objectives and key results (OKRs).
For example, in an OKR framework for closing a gender pay gap, you’ll start with a clear, compelling objective: all employees receive merit-based compensation, regardless of gender. For this objective, you’ll attach three to five key results that allow you to track progress toward your overall goal. One key result might be “achieve and maintain 100% base pay equity for employees in comparable roles.”
Ultimately, a goal-setting framework helps your company address gender pay equality using actionable and measurable steps. A structured approach to your strategy makes it easier to see consistent progress, maintain a long-term commitment, and adapt to unexpected disruptions. Setting goals with measurable steps also brings company-wide visibility to the issue and creates additional accountability for progress.
Gender pay equality won’t happen overnight. Closing the gender pay gap (and keeping it closed) is an ongoing effort. But it’s worth your attention—for the sake of your business, your employees, and the future generations of women who will work at your company.