PayScale recently completed a study of the gender pay gap. This year we studied not just the actual pay gap between men and women, but also the opportunity gap, and how the perception of fair pay by gender plays out. In particular, we asked additional questions that, when correlated, show interesting results for companies to consider: we asked respondents to rate how their employers are doing in addressing workplace inequity. We then cross referenced responses with level of satisfaction, intention to leave, and whether gender has prevented a raise or promotion.
The good news for employers is that almost half of respondents (48.6% of men and 46.7% of women) said there was no issue with workplace gender inequity. The bad news for employers is that more than half of respondents believe there’s a problem with workplace gender inequity.
While the gap shrunk some for both uncontrolled and controlled pay gaps, this year we explored further into the opportunity gap. The opportunity gap helps explain some of the difference between the uncontrolled pay gap (difference in between average male and average female pay across all jobs) and the controlled pay gap (difference in average male and average female pay across the same jobs, controlling for compensable factors like years of experience, education, and skills). Ultimately, the results uncover three critical issues that are important for your talent strategy: employee satisfaction, development opportunities, and retention.
Talent Strategy Issue #1: Employee Satisfaction
We compared the answers for employee satisfaction with how respondents feel their employer is addressing workplace gender inequity. Both men and women are more likely to be satisfied at work if their employer is proactively addressing gender issues in their workplaces.
We know that happy employees perform better. So the implication is that employers who proactively address workplace gender issues will have both more satisfied employees and higher performers.
Talent Strategy Issue #2: Development Opportunities
One question the study explored was whether respondents believe their gender has kept them from receiving a raise and/or promotion. This question allowed us to explore the opportunity gap. 18.5% of women agreed that they didn’t receive an increase or promotion due to their gender. While we understand this is a question of perception, at nearly one in five women, that number is still staggering. That said it gets even more interesting when cross-referenced with level of education. Women with advanced degrees were much more likely to believe that they were being prevented from receiving a raise or promotion due to their gender.
In studying millennials for the past few years, we know that development, or the opportunity for development, has become more important as a part of both retention and recruitment strategies. Increasingly, companies use development to retain top employees; it will be hard for companies to draw top educated or highly-educated female employees without demonstrating a commitment to providing fair opportunities for development.
Talent Strategy Issue #3: Retention
Finally, we found a link between intention to leave the organization and whether the employer is actively addressing workplace gender issues. In situations where no action is being taken by the employer, both men and women had a high intent to leave. Women are especially less likely to seek new jobs when the employer is proactively addressing workplace gender issues.
Both ends of this spectrum are interesting. Where employees believe no action is taken, both men and women have greater intent to leave. At the other end, employers who demonstrate a commitment to proactively addressing workplace gender issues are going to decrease the likelihood that their employees seek new jobs, within the next 6 months, by as much as 30%!
What can you do?
Employers who want to get ahead will benefit from the suggestions in the data, showing a correlation between seeking a new job and whether employers are proactively addressing workplace gender inequities. The data also shows a correlation between employers addressing workplace gender issues and employee satisfaction, among both men and women.
Often we get questions about how to improve retention or recruitment for a particular group within the organization. We believe this study helps to uncover a few of the key areas in which some organizations are missing the mark when it comes to providing fair opportunities based on gender. Fair pay is a lot about perception, and perception of pay matters. It’s not enough to pay fairly and provide opportunities, the next step is to communicate with employees.
Finally, before you start communicating, be sure to examine your pay practices to ensure that you’re providing fair opportunities for development and advancement to both genders. Using PayScale’s Insight is a great step in evaluating whether you have either a pay gap or an opportunity gap in your organization.
The Gender Earnings Comparison Feature helps pinpoint pay issues at the job level, especially important in states or provinces where pay equity is mandated by law.
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