The Labor Day holiday was first celebrated on Sept. 5, 1882 in New York City, to “recognize the contributions of the American worker.” The holiday grew to other states and became a federal observance in 1894. A celebration of economic democracy, Labor Day marked the progress of the labor movement to secure fair wages and safe working conditions.
On the heels of Women’s Equality Day this past Monday, I think it’s important to recognize that equal work for equal pay has not been achieved in the U.S. yet. Even among those in the corporate ranks, there is an imbalance in gender parity as well as racial and ethnic equality.
Focusing on gender parity, according to U.S. Census Data, on average in the U.S., women make 80.7 cents for every $1.00 a man makes. That’s a gender pay disparity of nearly 20% -- women are paid 20% less than men for the same work. And the gap is greater for women of color.
The Civil Rights Act of 1964 protects, among other things, women from being discriminated against in the workplace, including though wage discrimination. However, the Institute for Women's Policy Research estimates true gender pay equity will not be reached until 2059.
And, while it seems generally accepted that diversity among leaders leads to not only richness in ideas in perspective, but also greater return on investment for shareholders, only 33 of the 2019 Fortune 500 companies have women CEOs (that’s less than 7%), and only 25% of Fortune 100 board seats are held by women.
There are many causes to these imbalanced numbers, starting at the very beginning – education opportunities, exposure to careers and career development, mentoring – the gap is great in this country.
While no one person can fix all of these issues, any of us making hiring decisions can take a few steps to level the playing field:
Know the truth about where your team/department/organization currently stands on pay equity.
As leaders, we need to look at the hard truth. Are we paying our people equally for equal work? It’s not hard to get the data from your HR and Finance teams, but sometimes seeing it on paper can be jarring. Know where you stand, and make the commitment to make changes as necessary.
Make blind decisions when evaluating candidates on paper. (Harder, obviously, as the process advances to in person meetings!)
This is actually a really easy way to start a fair hiring process. Ask your talent acquisition partner to remove names from resumes before you review them, and not to reference a candidate with gender-specific pronouns when discussing with you in person or via email. Make this a practice for all hiring managers across your organization. Then, the very first decisions will be based on experience and presentation of information via resume and cover letter, which will help avoid unconscious bias. Also it will stop you from looking someone up on LinkedIn and seeing a profile pic! (Truly, other bias can be removed by removing education background including schools attended and years graduated – which can lead to assumptions about age, race, economic disparities etc – but that’s a topic for another post.)
Remove salary history as a hiring practice
Many states have made salary history an illegal ask, but not all. Even if it’s legal in your state, consider this: if women are already making 20% less than men, then they immediately enter your process at a deficit. How will they ever catch up? Eliminate that practice and consider experience, creativity, leadership style, not past pay.
Implement a clear pay-grade system, and implement it equally without fail
The military is not always the model for corporate behavior, but in this case I think the lesson applies. Military grades are based on experience, performance and outcomes. Each promotion has a set paygrade/increase. Applying precise pay grades to precise levels makes it easier to avoid unconscious gender (and race, religion, and all other) bias and will make it easier for you as a leader to say – and mean – that you compensate fairly. Equal pay for equal work.
Finally – no one is perfect and even the most perfect hiring practices aren’t going to necessarily yield a utopian cornucopia of gender, ethnic, and racial diversity. On the other hand, not trying to level the field means no progress.
My husband and I talk about this often as we focus on running and growing our agency– how can we make sure we’re building the right teams, fairly rewarding efforts and results, encouraging risks, striving for balance? As it relates to our clients, we've implemented a fair rate system; we don’t open high to negotiate midway. We lay out the work and the hours and the fees accordingly. And I think that might be a good practice for salary negotiations as well. Maybe deciding what salary a position really is worth, and laying that out to candidates as the process progresses rather than starting the negotiating song and dance, will help even things out further, faster. I’ve heard too many times in my in-house career “I think we can get her cheap” and “I don’t think we can afford him” – rather than guessing, honest conversations might be a better start. Just a thought.