Gender pay gap: Here’s how your company can help correct it

Editor’s note: Donald Thompson, a serial entrepreneur and investor, writes an exclusive column about leadership, equality, entrepreneurship and management. His posts are published on Wednesdays.

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RESEARCH TRIANGLE PARK – March is Women’s History Month, and if you only do one thing to mark the occasion, I urge you to conduct a pay equity analysis. What does that mean? In short, it’s a data-finding mission to make sure the women in your organization are being paid the full amount for every dollar men are making. You might think you’re doing well in this space already, but it’s still important to run the data so you can form an objective opinion.

Donald Thompson

The truth is that most organizations don’t have enough relevant insights into their compensation data to speak objectively about the state of pay equity. Also, far too many organizations are posting on social media about International Women’s Day without doing enough internal work to correct their internal pay disparities.

82 cents on the dollar

At the national level, PayScale indicates in its “State of the Gender Pay Gap 2021” report that U.S. women are still making only 82 cents for every dollar a man makes, despite achieving more college degrees. The gap grows wider and deeper when we look specifically at women of color.

Pay equity audits are a step toward better business outcomes

Consider this audit a first or next step in your efforts toward greater diversity, equity, and inclusion (DEI). As Human Resource Executive explains, “managing pay equity effectively builds trust in leadership, increases engagement and reduces turnover. Inequities in compensation, on the other hand, can lead to employee dissatisfaction and a higher risk of litigation, union issues, and shareholder disapproval.” In other words, an inclusive and equitable culture that values women and pays them fairly helps retain top talent and leads to better business outcomes overall.

That’s important because what we know about women at work is that “company profits and share performance can be close to 50 percent higher when women are well represented at the top [and] beyond that, senior-level women have a vast and meaningful impact on a company’s culture,” says McKinsey.

If you discover that a pay gap exists in your organization, dig deeper to find the root causes. What can be accounted for, and what can’t? Yes, there may be job- and performance-related factors at play, but your goal should be to isolate compensation inequities that are not linked to either of those considerations. Where might unconscious bias be raising its head? How can you move forward, even if it’s only incrementally at first, to level the playing field for women employees?

The COVID context

In 2022, women’s participation in the labor force is at a 33-year low, due in no small part to the COVID-19 pandemic. Again, the number is even higher for Black and Latine women. If we can be adaptable and attuned to what different women need and want at work right now, then we can help to fight the forces that are removing them from the workplace.

Certainly, pay equity goes a long way toward acknowledging and valuing women’s achievements at work, but it’s equally important to know how you can support women employees as they navigate the new, pandemic economy and unprecedented demands of family and community.

As the Center for American Progress reports in “How COVID-19 Sent Women’s Workforce Progress Backward,” “without both immediate and long-term action to shore up the child care infrastructure and establish more progressive work-family policies, the United States cannot achieve continued economic growth nor protect and advance gender equity.”

Actions you can take today

What can you do on a personal level to take action that supports women in your workplace? Start by raising awareness and sharing resources about the pandemic’s impact on women at work, especially the impact on women who work as family caregivers and women who have children.

Also, ask women leaders at all levels in your organization what actions they’d like to see to make your workplace more supportive, and give your employees as much flexibility around work hours, deadlines, and meetings as you can. Open and frequent communication makes such a powerful difference in a crisis, and we have been in a crisis for nearly two years now. Rely on a culture of trust and transparency by encouraging your employees to set healthy boundaries and communicate what they need to be successful.

To learn more about how you can create an authentic celebration and commemoration of women’s achievements throughout this month, I encourage you to download my team’s Women’s History Month Programming Guide, which lays out actionable steps you can take toward communication, education, public service, and supplier diversity.

One great thing about Women’s History Month is that nearly everyone knows at least one woman who inspires them to do and be great, whether that’s a caregiver, daughter, partner, friend, coworker, history-maker, or celebrity. It’s how we, in turn, support those women that shows what Women’s History Month is about.

About the Author

Donald Thompson is an entrepreneur, public speaker, author, podcaster, Certified Diversity Executive (CDE) and executive coach. With two decades of experience growing and leading firms, he is a thought leader on goal achievement, influencing company culture, and driving exponential growth. He is also co-founder and CEO of The Diversity Movement, a results-oriented, data-driven strategic partner for organization-wide diversity, equity, and inclusion (DEI) initiatives. Donald serves as a board member for several organizations in marketing, healthcare, banking, technology and sports. Connect with him on LinkedIn and at donaldthompson.com.