The pay gap is one very tangible way that we can see the harmful effects of gender bias. Back in April, I highlighted new data that showed still, even in 2018, we’re barely moving the needle when it comes to closing the pay gap between men and women’s earnings. The result is that when we look across the board at how much women make compared to men, we see that U.S. employers offer men more money than women for the same role in the same company nearly two-thirds of the time.
Yet there’s even more to the story of the gender pay gap when you look at how it affects people of color. That’s exactly what LeanIn.Org is doing with a new campaign it just announced this week called #38PercentCounts. This is the second of three campaigns that Lean In is promoting this year to highlight how the pay gap negatively affects women and families—and in this iteration, the focus is on Black Women’s Equal Pay Day, which is today, August 7.
To prepare for this day, in partnership with the National Urban League, Lean In conducted new research with SurveyMonkey that asked Americans a critical question:
How would you feel if you earned less money?
The survey found that the vast majority (85 percent) of Americans feel that it would be a major problem or even crisis if they earned 40 percent less than they do now. Yet this is the daily reality for Black women and their families, as recent research reported by the Institute for Women’s Policy Research revealed that Black women are paid 62.5 cents for every dollar that white men earn—a 38 percent pay gap.
SHAMBAUGH stands with Lean In as we all work together to raise awareness of unconscious gender bias (half of Americans aren’t even aware of the pay gap between Black women and white women—and Lean In reports that hiring managers are similarly unaware). We’re working with many Fortune 500 companies to improve gender balance and increase equality within organizations. Here’s one example of what that type of work looks like:
With one leading tech firm, SHAMBAUGH did our initial organizational assessment and found evidence of male gender bias within the leadership team—which was in most cases unconscious—as well as systemic bias in several key areas, including talent reviews, performance reviews, hiring practices, and pay systems. This was true throughout the company, resulting in a pay gap around 28 to 35 percent in most jobs.
In helping this organization work toward a solution, SHAMBAUGH consulted with the CEO. After reviewing our findings around the gender pay gap within his organization, the CEO realized that this was not only a gender equity issue, but just as important, an issue of pure talent. “In today’s world, the war for talent is intense enough that companies can’t afford not to provide equal pay for equal work,” the CEO told me. “You cannot be competitive or draw top talent with that type of brand—companies need to consider the human business case.”
SHAMBAUGH then worked with the management team and HR to establish a one-year scorecard—which included an equity plan to address the company’s current pay gap—setting milestones to reach parity. Central to the strategy for addressing the tech firm’s pay gap were these four steps, which any organization can follow as a blueprint for starting to even out corporate pay differentials:
- Compare people’s compensation for similar roles. To create a culture of equality, you must take concrete action to ensure all employees are treated equally regarding pay, as well as given equal opportunities for growth and advancement. The first step is to examine salary gaps between individuals to become aware of— and then expose—any unexplained differences between compensation levels for men and women, and for people of different races and ethnicities. It’s important not only to evaluate the data, but also to look at the root of the problem and identify what practices are in place or are missing that could be contributing to a pay gap.
- Create transparency around pay. Organizationscan contribute to more equitable outcomes by making salary ranges transparent to all employees. Being open about salary bands for particular jobs provides women and all employees with the information they need to be paid fairly and equally. Pay transparency also helps to ensure that women know when salary negotiations are possible or expected in an organization, so that they don’t end up leaving money on the table.
- Reduce decision-making bias. Individual decisions are more prone to bias than group decisions. So first, ensure that all hiring managers have clear and objective criteria to reduce the possibility of hiring decisions being based on subjective factors like “fit,” “style,” and personal views. Second, research has proven that resume reviews and interviews often end up tainted by gender discrimination. To eliminate bias and level the playing field, standardizing the use of blind hiring practices has helped to prevent bias. A blind systematic approach forces hiring managers to focus not on surface characteristics or demographics, but only on the true qualifications of each candidate.
- Commit to equal pay not just for gender, but for ethnicity/race. Generally when we talk about the pay gap, we’re accounting for pay differences by gender alone, not by race or ethnicity. Lean In has helped build awareness that Blacks and Latinas face even deeper pay gaps than white women—Latinas currently deal with the unfairness of a 46 percent pay gap, and Black women, as mentioned, a nearly 40 percent pay gap. By shining the spotlight on equal pay issues for women of color and addressing these areas intentionally, companies can create equal workplaces where all employees are paid fairly—which research has shown can lead to a higher level of commitment as well as better job performance.
By following these four steps, the tech firm that SHAMBAUGH coached in the example above managed to lower its pay gap substantially just one year after launching these initiatives. Are you ready to take the next step in ensuring that your organization performs at the highest level, by ensuring that everyone has the same opportunities and gets paid equally and fairly for their work? SHAMBAUGH can help get you there—you can reach me at firstname.lastname@example.org.
Rebecca Shambaugh is a leadership expert on building inclusive and high performance cultures. She speaks at major conferences and to executives on how to disrupt traditional mindsets and create an inspiring vision and roadmap for driving greater levels of innovation and performance through a unified voice for leadership. Rebecca is the Founder of Women in Leadership and Learning, a regular contributor to Harvard Business Review, and blogger for the Huffington Post. She is author of the best-selling books It’s Not a Glass Ceiling, It’s a Sticky Floor and Make Room for Her: Why Companies Need an Integrated Leadership Model to Achieve Extraordinary Results.
SHAMBAUGH’s Mission: We’re on a mission to develop high-performing and inclusive leaders who transform workplace cultures so everyone can thrive. Find out more about us at: www.shambaughleadership.com