- The tight labor market and the loss of more than one million women from the workforce during the pandemic makes it critical for companies to focus on pay equity as part of a broader effort to recruit, retain and develop the careers of female workers.
- Changing the way companies talk about pay, conducting pay audits, and driving change from the CEO level all the way though corporate culture are required steps in this process, but there is no one solution.
The pandemic's toll on women in the workforce has been well documented, and starkly, through some big numbers: more than 1.4 million net jobs lost among women, and more than one million who have not returned to the labor force. The pandemic has also intensified what was already a tight job market, and together, these factors should lead companies to focus even more on closing the gender pay gap, and to take a hard look at how their own organizations are doing in terms of pay equity, according to top executives focused on gender equality in careers.
Going beyond regaining the career progress lost by women during the Covid-19 pandemic and making consequential change in closing the pay gap will improve acquisition and retention of talent. There is no silver bullet, but experts focused on closing the gap recently provided some valuable lessons and ideas to the CNBC Workforce Executive Council.
Salary transparency laws are one step, but not a solution
In recent years, pay equality headlines have often highlighted states, including Colorado and California, and cities, such as New York City and Cincinnati, passing laws requiring salary transparency. While these guidelines vary from place to place, some allow job seekers the right to request the salary range for a job, others require companies to share the salary range on the job posting.
This is a positive trend.
"The salary band information can be useful for candidates. It helps them in the negotiation process," said Cindy Robbins, former president and chief people officer of Salesforce, during a CNBC Workforce Executive Council LinkedIn livestream this week.
Workers today have little trust in their companies when it comes to pay. A December 2021 survey revealed that only 1 in 4 workers believe their employer is transparent about salaries, and almost half do not believe they are paid fairly compared to people in the same role at other companies.
"I don't think that salary transparency is going to solve the pay gap; it's one step in the right direction," said Cate Luzio, founder and CEO of Luminary, a career growth and networking organization for women which works with companies including UBS, WW, JPMorgan Chase, Unilever, Verizon, Goldman Sachs, Blackstone and Mastercard. "I think that there are a lot of other opportunities within the structure of the way companies are designed," she said.
Comparable compensation is not enough
To achieve true pay equality, organizations must go beyond comparable compensation.
In hiring, for example, it is typical for recruiters to ask about the current compensation of an applicant. Robbins said that is the wrong question if companies want to help close the pay gap. "What is the compensation you expect?" is a more constructive question, she said.
To consistently ensure equal pay standards are being met, organizations should implement pay audits. In her time at Salesforce, Robbins advocated for these assessments and that practice has continued at the company. In Salesforce's recently released annual update on pay equality, it found that 8.5% of its global employees required adjustments. Of those, 92% were based on gender globally, and 8% were based on race or ethnicity in the U.S. The company spent $5.6 million to address "unexplained differences" in pay, and has spent a total of more than $22 million since it began studying the issue in 2015.
Luzio stressed that companies need to invest in women beyond pay. Career-spanning support is essential. Companies must be "paying them appropriately, providing them opportunities earlier in their career, [and] investing in their skills and development," Luzio said.
Pay equality can't be a one-and-done corporate checklist item
In a recent survey from FlexJobs, a toxic company culture was found to be the No. 1 reason workers resigned.
Pay equality has a positive impact on company culture, but to make these policies work, Robbins says C-suite level support is critical.
"There's got to be a path to the CEO … you need them to be supportive of this," she said.
Companies also need to remember that these types of changes are not "one and done" checklist items, which was important for Salesforce in its implementation of pay audits.
"This is inherited in our culture going forward, and we have to make it a part of the values in our company," Robbins said about lobbying for pay audits.
Making pay equality a tenet of an organization's culture will help in talent acquisition and retention efforts.
"I believe culture is a driver now for all companies in all industries," Robbins said, and she added that "trust" in an organization prioritizing pay equality is part of that cultural equation. Companies will put themselves in a better position to compete for talent, and retain talent, if they lead rather than follow on this issue, she said.
"The pressure is on," Luzio said. "Like the tight labor market that we know, people will walk, and, in particular, women, and they will go search where they are valued and get paid what they deserve. Women are part of the economic recovery of this country and the world, so we've got to be making these changes," she said.