How to Close the Gender Pay Gap

How to Close the Gender Pay Gap: 4 Tips for Employers

On Equal Pay Day, a team of business experts and leaders including Hillary Clinton and Glassdoor CEO Robert Hohman gathered in New York City to discuss pay equality. Questions asked by panel moderator and award-winning journalist Diane Brady revealed insights and actionable steps for employers.

“It’s not just about women’s choices, it’s about employers’ choices,” said Tracy Sturdivant, co-founder & co-executive director of Make It Work. Employers are in a position to make a difference in eliminating the gender pay gap. And, when 60% of employees say they wouldn’t apply to a company if they knew a pay gap existed, it’s important for companies to analyze their own data to understand where any problems lie and take action.

How to Close the Gender Pay Gap

1. Don’t Be Afraid of the Problem

Laws like the Equal Pay Act, the Lilly Ledbetter Fair Pay Act, and the Family and Medical Leave Act of 1993 were put in place to bring women up to par. But even with these laws in place, the gender pay gap persists, as Glassdoor’s research shows. “The failure to ensure equal pay for women also impacts families and the broader economy. Glassdoor is focusing on an issue that has really almost universal repercussions,” Clinton said.

Taking action is an opportunity for leadership. Addressing the problem head-on you can help to solve the problem of pay inequality in the U.S. and around the world. A salary difference of a few thousand dollars a year could mean the difference between one of your employees sending her daughter to summer camp, or paying for her son’s college tuition so he doesn’t have to take out loans.

2. Analyze Your Data

Dan Henkle, president, Gap Foundation & SVP of global sustainability of Gap Inc., noted that for the Gap’s 45th anniversary and in honor of its female co-founder, it analyzed its salary data. The results showed 100 percent equality in pay. Gap took it a step further and analyzed the rate of promotions, engagement levels and distribution of bonuses. Meanwhile, Glassdoor recommends conducting an audit with the help of a cross-functional team that asks the following questions:

  • Do men and women receive equal pay for equal work?
  • What is the distribution of men and women throughout the company and departments?
  • Do both men and women get promoted at the same rate?

3. Evaluate and Reward Performance Equally

As the executive director at the Clayman Institute for Gender Research at Stanford, Lori Nishiura Mackenzie gathers in-depth research on how gender bias plays out in the workplace. She also develops action strategies to empower men and women in the workplace through the Institute’s Voice & Influence program. Research shows that women tend to be evaluated based on experience, whereas men can be promoted based on potential. Women can also be unconsciously guided down different career paths. Mackenzie cited an example of a manager who guided his male employees to excel in technical competence while he guided his female reports toward team collaboration skills, which resulted in different career paths with different pay levels. Managers should ask themselves the following questions:

  • Am evaluating everyone based on the same criteria?
  • Am I giving the same feedback and guidance to all my reports regardless of gender or race?
  • Am I distributing salaries or bonuses equally?

When considering raises and bonuses, it’s important be aware that women are less likely to negotiate, and may need to learn negotiation skills. Henke shared a story about a Gap manager who sought out a raise for an employee who didn’t ask for it; it simply hadn’t occurred to her to ask.

4. Invest in Women’s Careers

Megan Rapinoe, U.S. Women’s Soccer World Cup Champion and Olympic Gold Medalist, noted the lack of female head soccer coaches, simply because the investment in getting female coaches off the ground hasn’t been made. In addition, U.S. Soccer’s investment in promoting the women’s team has not been as substantial as the men’s team, yet it has achieved far greater success. “It takes a paradigm shift,” she said, “to make more money for this team and capture the momentum we have now—it takes grassroots investments.”

Women need investment in their success in a corporate setting as well. Young women often start out their careers on equal footing as men, and with high ambitions, yet they are unaware of the pay gap at the top. Glassdoor data verifies this imbalance: Younger workers aged 18-24 face a smaller adjusted pay gap of 2.2 percent. By contrast, older workers aged 55-64 face an adjusted gender pay gap of 10.5 percent.

Glassdoor recommends taking the following steps to ensure women are promoted fairly at your company:

  • Encourage managers to suggest a range of development opportunities for all direct reports.
  • Encourage women to join sponsorship and mentoring programs.
  • Celebrate the achievements of existing female leaders within the company.

If your company has already taken steps to ensure pay equity, you should leverage that fact as part of your employer brand to stand out to candidates and employees.

Video Replay: Watch the entire Glassdoor Roundtable Discussion and learn more about what can be done to reach pay equality.