Back To Compensation Today

Does Your Company Proactively Address Gender Inequity?

Addressing gender inequity — and making sure your employees know you’re doing so — could make a big difference to your bottom line.

Why? Employee retention. In short, if your employees don’t perceive that you’re proactively trying to make things fairer for women at the company — by paying equitably and promoting fairly — they’re more likely to leave. This is true for both male and female employees.

In fact, data collected for PayScale’s report, Inside the Gender Pay Gap, showed that men were more likely than women to leave their jobs because they felt their employers weren’t striving for fairness. When workers perceived that their employers weren’t doing anything to address gender inequity at the company, 74 percent of men said that they were planning to seek new employment in the next six months. Only 71 percent of women said the same.

This means that it’s in your best interests to create polices that promote gender equity at your organization. It also means that you should make sure that your employees know about those policies, once they’re in place. The best policies in the world won’t help you retain talent, if your employees don’t know about them.

Learn More About Our Compensation Software


What Your Organization Can Do to Reduce Gender Inequity

1. Become transparent about pay.

Pay transparency doesn’t necessarily mean sharing everyone’s salary with every member of the organization — although it can mean that. Companies like Buffer have gotten a fair amount of press in recent years by making public every employee’s salary, from the CEO on down. But the really important part of their story is that they share the formula they use to determine that salary. If you’re contemplating pay transparency at your organization, that’s what you need to pay attention to.

Data collected for PayScale’s Compensation Best Practices Report show that employers and employees have different perceptions of how equitable their pay is. For example, 57 percent of employers say that their organization has no issue with gender inequity, so no action is needed. Only 48 percent of employees agree with them.

Further, there’s a chance that lack of transparency might allow gender pay inequity to take root without your knowing it. If you’re not thinking proactively about compensation and pay equity, you might be paying unfairly unintentionally.

2. Address the opportunity gap.

PayScale’s research shows that the gender pay gap is really an opportunity gap. When we look at the controlled data, which compares only women and men in similar jobs, with similar skills and experience, the gender pay gap closes to 98 cents on the dollar. Not perfect, but not the 76 or 78 cents on the dollar statistic you usually hear.

However, this smaller, controlled pay gap isn’t necessarily cause for rejoicing when the uncontrolled pay gap is 76 cents on the dollar. The difference between the two measures? The fact that women are less likely than men to have higher-paying and/or executive jobs. This opportunity gap keeps women’s earnings low relative to men’s, even if they’re paid the same wages at the individual contributor level.

To pay equitably, your organization can close the opportunity gap by having female managers and executives at all levels, including the C-suite. Again, this is in your company’s best interest: studies have shown that companies with diverse leadership are more profitable.

3. Tweak your compensation strategy based on employee feedback.

In today’s world, your compensation plan is never “done.” Just like the rest of your corporate strategy, it has to evolve as your business grows and its needs change. Employee engagement surveys can help you make sure that your strategy is proactively addressing gender inequity and retaining talent — but that means acting on feedback, as well as collecting it. Research from the CBPR shows that 50 percent of companies agree that compensation drives engagement, but only 26 percent have adjusted pay as a result of engagement survey feedback.

Want to know more? PayScale’s Compensation Best Practices Report is the place to start.

Tell Us What You Think

Does your organization address gender inequity — and if so, how? We want to hear from you. Tell us your thoughts in the comments.



Jen Hubley Luckwaldt
Read more from Jen

Leave a Reply

Notify of
Start the Transformation

We can help you bring modern compensation to life in your organization.