Statistically a woman working in Europe misses out on half a million of salary over the course of her career, compared to a male counterpart.
This, ladies and gentlemen, is due to the infamous gender pay gap at work.
The European Equal Pay Day on Nov 15 should bring awareness to this gap, representing the day when statistically men already reached the salary, that women need to work for until the rest of the year. So basically, women work for free until the end of the year Nov 10 onwards.
This article is covering the following sections:
what is the gender pay gap exactly and how is it calculated?
The gender pay gap is the difference in average gross hourly earnings between women and men. The EU average gender pay gap was 12.7% in 2021.* The gap widens even further when you factor in ethnicity, age, and disabilities.
the main reasons for the gender pay gap
Some of the reasons for the gender pay gap are structural and are related to differences in employment, level of education and work experience. If we remove this part, what remains is known as the adjusted gender pay gap, which, well - is still a gap.
➡️ different career choices
Women work more often in low-paid sectors and professions such as social or personal services.
➡️ family reasons
Women interrupt or reduce their employment for family reasons more frequently and for longer than men and re-entry into the labor market is a lengthy process for women, which can drag on for several years and is often associated with part-time or mini-jobs.
➡️ lack of women in leadership
Women are absent from the higher rungs of the career ladder. Women are still underrepresented in top positions. Companies are still lacking the right structures to facilitate reconciliation of family and management positions.
➡️ unconscious biases
Gender stereotypical roles continue to have a major influence on our thoughts and actions and we are all facing a variety of biases through our work life. Unless tackled early on, change will be difficult.
why companies should care about the gender pay gap
Funnily enough the majority of men still believe that workplaces are equal and women have just as many opportunities as them.
But not only men have an inaccurate picture. Most of the modern workplaces believe there is no pay gap within their organisations - but having a close look at their numbers usually shows there is.
Even Salesforce’s CEO Marc Benioff doubted it was an issue back in 2015, until two of his female executives, Cindy Robbins and Leyla Seka, ran some numbers.
“It was through the whole company, every department, every division, every geography.”
Marc Benioff, CEO, Salesforce after running numbers on the gap
Over the next few years, the company, which employs around 30,000 people, spent about $6 million addressing pay differences due to gender, race, and ethnicity.
Just like in the Salesforce example, women are specifically strong advocates for equal and fair workplaces. Making equal pay a priority is not only the right thing to do but also helps companies to attract and retain diverse talent in the long run.
10 actions companies can set to close the gender pay gap
So now that we know the gender pay gap is a real and pervasive problem, let’s dive into what companies and people leaders can do to make a difference.
Here are 10 steps you can implement today to make a difference in your organization.
1. educate yourself and spread awareness around the pay gap
As you’ve seen in the Salesforce example, hardly any company is aware of an existing gap. So before change can happen, there needs to be an increase in awareness within companies.
Feel free to use this article and forward it to your colleagues ;)
If you need to stress the importance of diversity within your organization, head over to this article for reference.
2. have a close look at your company’s salary data
Well, once we are all aware that the gender pay gap exists, it’s time to get the numbers rolling. Numbers don’t lie, so get started with having an honest look at the data. Not sure where to start?
Here is a handy calculator (in pounds) but we recommend setting up some smart formulas directly, so you can compare your numbers on the go and adjust immediately.
Look for discrepancies between pay rates and ensure all employees of equal experience and in similar roles are paid the same – no matter their gender or race.
3. transparency in pay
“Don’t talk money” is still haunting our generation, but honestly - we should normalise talking about salaries. If you are afraid your salary tables get leaked within your organization, have a hard look at your policies. People talk anyways, and you’re FAR better off, making it transparent for everyone.
Yes, you heard that right, by publishing the wage ranges for all levels of roles, you are equalling the playing field. Transparency is proven to shrink the gender pay gap.
4. put that salary range on your job ad
Speaking of transparency, how about stopping making it a secret how much you have budgeted for a certain role and add the range to your job ad?
It not only contributes to equal pay, it’s also making sure you and some potential candidates are not wasting each other’s time! (That one also goes out to headhunters & recruiters - state that salary range when reaching out to candidates!)
5. stop asking what people make in interviews
Imagine the beautiful flow of an interview process without the awkwardness of the salary discussion part? Once you put your salary ranges out there (see step 4) you usually only attract candidates that are comfortable with that range. Beautiful, right?
So instead of asking how much a candidate earned in the last role, just use your internal pay data to make an offer that ensures that all employees are paid equally.
Pro tip for equal employers: If a top candidate insists on a higher salary, other than your current ranges allow, how about raising the salary for all employees? Bold move, but worth it!
6. encourage gender-neutral parental leave policies
On average, women are dedicating 10 more hours per week to unpaid work than men, especially as mothers. The result: a negative impact on women’s ability to return or participate fully in paid employment - which again contributes to the pay gap.
By introducing gender-neutral parental leave policies your company is contributing to balancing unpaid work and equal pay.
7. experiment with new work practices that make a difference
By making diversity a priority your company inevitably needs to look into new work practices that help make the workplace more inclusive.
Remote work, flexible working times, dual leadership models, 30 hour work week - the list of inclusive and forward-thinking practices is almost endless and by offering a more flexible work environment, you will continue to attract smart, highly-qualified diverse candidates, trust us!
8. get more women into leadership position
When companies achieve better female representation in leadership, this is where the magic happens – the gender pay gap shrinks.
Interested in what women need in their workplace to advance into leadership and how you can support them? Read more about that in our recent study results.
9. enable mentoring for your female talents
By connecting young female professionals with more experienced leaders you’re supporting the next generation understanding their worth when it comes to their work. But not only that, it also helps getting more women in leadership positions and is proven to support employee retention. Learn more about mentoring in organizations.
10. measure your pay equity regularly
Once you get into all of the above (no pressure) - it’s (as everything in life) crucial to measure its success. So continue to measure your salary data, conduct pay equity audits and look for discrepancies between pay rates to ensure all employees of equal experience and in similar roles are paid the same – no matter their gender or race.
about the female factor:
As the female factor we are on a mission to close the gender leadership gap. We are supporting ambitious women to get ahead in their career on one side and enabling inclusive companies to attract and retain female talent on the other. Learn more about us.
about the author of this article:
Tanja Sternbauer is the co-founder and co-ceo of the female factor and avid advocate for equal opportunities in the workplace.
sources for this article