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Committing to Gender Pay Equity

More than 100 employers have signed on to the White House Equal Pay Pledge, but will it actually move the needle on the issue?

Thursday, January 12, 2017
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Just as a new occupant prepares to move in to 1600 Pennsylvania Ave., more than 100 employers have signed the White House Equal Pay Pledge that was launched last June. These organizations have committed to performing a variety of best practices that include conducting an annual gender-pay analysis across occupations, reviewing hiring and promotion processes and procedures to reduce unconscious bias, and embedding equal pay efforts into broader enterprise-wide equity initiatives.

Despite federal legislation that attempts to abolish wage disparity based on gender, equal pay for equal work is still a hot-button issue. Numerous studies reveal that income disparity still exists between men and women, even those holding the same job.

Among the latest research is the 2016 Inside the Gender Pay Gap report, conducted by PayScale, a Seattle-based organization that provides cloud compensation data and software. The company gathered the responses of approximately 1.8 million employees over the past two years. 

The research finds more than half of respondents felt gender inequity was an issue in their workplace. And, when analyzing the uncontrolled gap -- comparing the median salary of every working man with the median salary of every working woman -- men earned roughly 24 percent higher than women. But when measuring the controlled pay gap -- median salaries between men and women with the same job and education -- women made 98 cents for every dollar earned by men. The research also found that men in the late stage of their career are 41 percent more likely to be in management roles than late-career women and nearly twice as likely to hold an executive position.

 "What gets lost here is there is certainly individual industries and jobs that have larger gaps," says Lydia Frank, vice president of content strategy at Seattle-based PayScale. "In oil and gas, which has the largest controlled pay gap . . . the pay gap is 7.4 percent."

When it comes to uncontrolled gaps nationwide, she says men make more than http://www.hreonline.com/DATA/servlet/DataServlet?fname=ThinkstockPhotos-495334037equalpayL.jpgwomen in every U.S. state. At the top of the list is Wyoming, where men earn 29 percent more than women. The smallest uncontrolled gender pay gap is Vermont, where women make about 15 percent less than men.

In a few states -- Vermont, Rhode Island, Connecticut, as well as the District of Columbia - women actually out-earn men when occupying the same position. The controlled gap is worst in Louisiana, where men make more than 7 percent than women in the same job.

Although more progress needs to be made, Frank believes the White House Pledge can be a contributing factor toward closing the gap.

"What moves the needle here and what businesses need to be paying attention to is that their position on pay equity impacts their ability to attract and retain the best people," she says. "A commitment to equitable pay, treating people [fairly] matters, and impacts their ability to get work done."

Workday, based in Pleasonton, Calif., and Zillow Group, a Seattle-based online real estate development company, both recently signed the White House Pledge. With 2,750 employees in nine U.S. cities and Vancouver, Zillow’s HR department built an audit procedure into its compensation practice last year that compares all men and women in a comparable job and then reviews aggregate data to ensure gender pay equity.

"We definitely had outliers, a handful of individuals in different functions," says Dan Spaulding, vice president of people and culture at Zillow. "Doing this evaluation allowed us to go in and work with those leaders, HR partners with those organizations, and really do our best to determine if there was a pay difference, [and wehether we could] explain it based on pure performance or relevant experience. If not, we made the appropriate adjustments."

This analysis is conducted twice a year to ensure that, as employees are promoted and more hires are added to the company's workforce, some level of inequity "isn't creeping into the process," he says. The information is then shared on its intranet and during annual webcasts.

"There's a lot of growing methodology in this space that, as HR professionals, we can share," says Spaulding, who believes this process will soon become a business norm.

Other best practices include ensuring that women returning from maternity leave are not demoted or taken off the promotional path and ending salary negotiations, says Ruchika Tulshyan, author of The Diversity Advantage: Fixing Gender Inequality in the Workplace.

"Research shows that, even when women do negotiate their salary or raises, they're less likely to get it," she says. "We all hold biases and sometimes we're more likely to reward someone who looks like us. So if you're a white male hiring manager, you're more likely to reward male white employees asking for a raise."

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However, none of this matters unless HR equips company leaders and management with "diversity lenses" that make them aware of cultural differences between the sexes, says Tammy Hughes, coauthor of Hardball for Women: Winning at the Game of Business and president of The Heim Group, a Los Angeles-based workplace consultancy.

Invisible rules govern male and female cultures, says Hughes. Although there are exceptions, men are comfortable asking for pay raises while women avoid taking more than their perceived fair share. She says HR needs to generate awareness about such hard-wire differences between the genders.

While the White House Pledge is a step in the right direction, it's still not enough, says Hughes, adding that expecting both genders to behave alike is unrealistic.

"You cannot manage what you do not see and you cannot manage what you do not understand," says Hughes. "I don't think you can get to that understanding if you don't wear the lenses [that reveal] the invisible rules of each culture."

Of course, whether the Equal Pay Pledge will be renewed when the president-elect takes office is anyone's guess.

According to an article on Time's website, Donald Trump "has voiced tepid support for equal pay, but at times has appeared skeptical of the idea that men and women who performed the same [job] were making different salaries. Last August he said that 'if they do the same job, they should get the same pay,' but noted that such equality would be difficult to implement as a matter of public policy."

"When you have to categorize men and women into a particular group and a particular pay scale, it gets very . . . because people do different jobs," he said.

A few months later, Time reports, he appeared to challenge the idea a bit more, responding to a question about equal pay with, "You're gonna make the same if you do as good a job," but he did not commit to any policy proposals.

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