How to en­sure your busi­ness pays work­ers fairly

How to en­sure your busi­ness pays work­ers fairly.

Inc. (USA) - - CONTENTS -

Do you pay your em­ploy­ees eq­ui­tably, no mat­ter their sex? Few peo­ple set out to de­lib­er­ately dis­crim­i­nate—but the num­bers tell a grim story. (See “Map­ping the Gen­der Wage Gap,” page 58.)

Amer­i­can women earn 82 cents for ev­ery dol­lar earned by men, ac­cord­ing to Pew, and women in gen­eral are do­ing far worse at some big multi­na­tional com­pa­nies, which pay them as lit­tle as half of what they pay men, ac­cord­ing to re­cent dis­clo­sures forced by new British reg­u­la­tions.

Other big com­pa­nies, in­clud­ing Star­bucks and Sales­force, have ac­knowl­edged gen­der pay gaps and have taken con­crete steps to elim­i­nate them. This has ben­e­fits beyond good PR: Com­pa­nies that pri­or­i­tize pay eq­uity are see­ing worker pro­duc­tiv­ity in­crease 19 per­cent above in­dus­try av­er­ages, ac­cord­ing to Ap­ti­tude Re­search Part­ners, while em­ploy­ees who per­ceive a pay gap are 16 per­cent more likely to leave their com­pa­nies, ac­cord­ing to a 2017 CEB/Gart­ner sur­vey.

So how do you make sure your com­pany is pay­ing all of its work­ers fairly?


This is the base of any pay eq­uity ef­fort. First, com­pile an or­ga­ni­za­tional flow chart to make sure you’re com­par­ing “ap­ples with ap­ples,” says Ch­eryl Swirnow, an HR con­sul­tant and the founder of CMS Con­sul­tants. “You may think two peo­ple are do­ing the same job, but when you sit down with the em­ployee and the man­ager, they are not.”

Ex­am­ine not only your cur­rent salaries and ben­e­fits, but also what you have paid work­ers his­tor­i­cally—and what pro­mo­tions and raises have oc­curred. While some com­pa­nies of­fer a struc­tured re­view process for all hires, and rarely raise salaries out­side of it, oth­ers are more ad hoc, of­fer­ing em­ploy­ees wage in­creases when, for ex­am­ple, they re­ceive an out­side of­fer.


Pay gaps can of­ten de­velop dur­ing pe­ri­ods of rapid growth, when you hire a lot of peo­ple at once. Stud­ies have found men are both more likely to ne­go­ti­ate for salary of­fers and more likely to be suc­cess­ful— mean­ing that if you don’t dis­close salary ranges up front, you may wind up pay­ing women less.

Take Skill­crush, an on­line dig­i­tal ed­u­ca­tion com­pany that dou­bled in size over a short pe­riod: New hires ne­go­ti­ated their of­fers, and co-founder Adda Birnir found her­self pay­ing them more than some loyal, long­time em­ploy­ees. Now Skill­crush lists salary ranges for open po­si­tions, a strat­egy de­signed to en­sure pay eq­uity among all em­ploy­ees by sex, race, and ten­ure, as well as one that doesn’t al­low for hard ne­go­tia­tors to end up with more money.

Don’t for­get ben­e­fits: At RigUp, an on­line mar­ket­place for en­ergy in­dus­try con­trac­tors, a pay au­dit sur­vey re­vealed that women were par­tic­u­larly in­ter­ested in a 401(k) match and a $2,000 va­ca­tion or ten­ure stipend when an em­ployee reached the three-year mark. So the com­pany added them.


Make sure you’re groom­ing a di­verse pool of em­ploy­ees at ev­ery level. Car­bon Five, a San Fran­cisco–based dig­i­tal prod­uct-de­vel­op­ment con­sul­tancy, paid sim­i­lar salaries to men and women in sim­i­lar po­si­tions—but found it­self with few women to pro­mote into its tech­ni­cal lead­er­ship ranks. This is so com­mon there is a term for it: the po­si­tion gap. As Court­ney Hem­phill, a part­ner and tech lead with Car­bon Five, noted dryly, “Ca­reer pro­gres­sion is some­thing clearly as­so­ci­ated with pay.” Start­ing at the end of 2017, Hem­phill and her part­ners in­vested in new re­cruit­ing ini­tia­tives and trained Car­bon’s man­agers in how to avoid im­plicit bias, so they won’t over­look women who might not have job his­to­ries or ca­reer pro­gres­sions iden­ti­cal to those of pre­vi­ous male hires.


Achiev­ing pay eq­uity is not a one-time fix. You’ll need to reg­u­larly mon­i­tor and ad­dress pay as you hire, pro­mote, and try to re­tain your key em­ploy­ees. As Sales­force dis­cov­ered: Af­ter spend­ing $3 mil­lion in 2016 to close the gap be­tween women and their male peers, Marc Be­nioff’s soft­ware com­pany com­mit­ted an­other $3 mil­lion last year. “The need for an­other ad­just­ment un­der­scores the na­ture of pay eq­uity,” a Sales­force blog post ac­knowl­edged. “It is a mov­ing tar­get, es­pe­cially for grow­ing com­pa­nies in com­pet­i­tive in­dus­tries.”

He­laine Olen (@ helaine­olen) is a vet­eran per­sonal fi­nance jour­nal­ist, the au­thor of Pound Fool­ish: Ex­pos­ing the Dark Side of the Per­sonal Fi­nance In­dus­try, and the co-au­thor of The In­dex Card:Why Per­sonal Fi­nance Doesn’t Have to Be Com­pli­cated.

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