gender pay gap

The Gender Pay Gap is Actually More Significant Than You Think

Most people know women in the U.S. make around 80 cents for every dollar a man earns. So, the gender pay gap for women in this country has long hovered around 20 percent. But recent research from the Institute of Women’s Policy Research (IWPR) suggests this number may be much more significant than we previously believed.

In this article, we’ll tell you what this new research found and what it means for your employees. Plus, we’ll let you which 5 benefits you can use to reduce the gender pay gap.

 

The Tale of the Tape

According to the study by the IWPR, in 2017, the gender earnings gap was 20 percent. Which means women earned 20 percent less than men. This figure is based on the ratio of women’s to men’s median earnings for full-time, year-round work. Though, as the study argues, this commonly used annual figure likely understates the problem.

So, the authors of the study decided to analyze the gender wage gap over 15-year periods, rather than year-to-year. Using a longer time frame yielded compelling results for the researchers. A multi-year analysis provided a more comprehensive picture of the gender wage gap.

Researchers measured total earnings across the most recent 15 years for all workers who worked in at least one year. Through this multi-year study, researchers found women workers’ earnings were 49 percent of men’s earnings. Which puts the actual women’s wage gap at 51 percent. A much greater figure than the 20 percent that’s typically used.

But, that’s not the only interesting number this study uncovered. According to the researchers, the penalties for taking time out of the labor force are a primary driver behind the gender pay gap.

Annual earnings were 39 percent lower for women who took just one year off from work, compared to those who worked all 15 years. This 39 percent is a much higher cost than women faced in the period beginning in 1968. During that 15 year period, one year out of the workforce resulted in a 12 percent reduction.

It’s important to note men are also penalized for taking time from work. But this penalty is significantly less for men than women. Per the IWPR study, women’s earnings losses for time out of the workforce are almost always higher than men’s losses.

Similarly, an essential part of the gender pay gap has been women’s weak labor force attachment. A total of 43 percent of today’s women workers had at least one year with no earnings. This percentage is close to twice the rate of men.

 

What Can Your Business Do?

As a business owner or employer, you’re not able to address some of the deep-rooted societal issues that are responsible for the current gender wage gap. Still, there are multiple actions any organization can take to help improve this disparity in women’s pay. Here are the benefits your firm can use to reduce the gender pay gap:

 

1. Paternity Leave

Paternity leave is the first benefit your business can use to decrease the gender wage gap. As the research noted above points out, women who take time out of the workforce make significantly less money over their careers than their peers. This phenomenon is especially prevalent in the U.S.

In 2014, research from Harvard economist Claudia Goldin reinforced this fact. Per Goldin’s research, the wage gap in the U.S. was largest for women in their 30s. In other words, the gender pay disparity is greatest for women in the U.S. during women’s prime, childbearing years.

This research exposes the bias behind another couple of shocking statistics that illuminate the roadblocks to equal pay for women. Per A Uterus is a Feature, Not a Bug, working mothers are half as likely to be promoted and earn an average of $11,000 less in salary.

Paid maternal leave is the obvious solution to lessen the impact of the obstacles facing working mothers. But maternal leave only creates another difference between working men and women and does nothing to alleviate the stigma attached to taking paid leave to care for your child.

Instead, your firm should offer paid parental leave to push both working mothers and fathers to take time off for the birth or adoption of their child. The more working fathers take leave, the more we challenge the notion that males should be a household’s breadwinner, and females the caretaker.

 

2. Development Opportunities

Career development opportunities are the second benefit your firm should use to address the gender pay gap. According to research by the Work Institute, the top reason for employee turnover was a lack of career development opportunities. Similarly, a WorldatWork study, from earlier this year, found the most significant increase in total rewards during the next 3 to 5 years will be in career development.

woman typing

Similarly, last year, the Employee Experience Index uncovered which practices are vital for an employer to create an enticing working experience. The number three most crucial part of the employee experience was feedback, recognition, and growth (all components of development).

So, your employees desire development opportunities. That can be good news! Your company can use career development to help narrow the gender wage gap. For example, implement a program that builds the skills of women who’ve taken time out of the workforce.

 

3. Flexible Work Options

The third benefit your business should consider is flexible work options. Flexible work options include flexible location, flexible schedule, and flexible time. Each of these options gives working women, especially working mothers, flexibility to work around the other demands of their lives such as childcare or caring for an aging parent.

A Gallup poll found 53 percent of stay-at-home mothers say flexible hours or work schedules are a significant factor in their ability to take a job. Flexible work options could help attract and retain valuable female employees who otherwise wouldn’t even consider taking the position.

 

4. Return to Work Program

Another compelling benefit for working mothers is a return to work program. Providing extended paid time off, such as paternity leave, is a tremendous benefit for working moms. But when an employee takes an extended leave, there needs to be a plan to reintegrate these employees back into the workforce.

Plus, return to work programs can be used for more than just returning parents. Employees with disabilities, recovering from an addiction, returning from a major illness, or coming back from the birth of a child are all examples of those who would benefit from a return to work program.

Return to work programs allows employees, to slowly reacclimate to the workplace. With this benefit your staff can get comfortable again in their role at a reasonable pace. Rushing staff back from an extended absence could leave an employee overwhelmed or overstressed.

 

5. Monitor Raises and Promotions

The final benefit your company can use to close the gender wage gap is to monitor your raises and promotions. Another contributing factor to the gender pay disparity is the fact women are 40 percent less likely than men to receive a promotion, according to a 2017 study by Visier.

This fact holds true even though women in 2017, per the same research, were 21 percent more likely to achieve “top performer” status than men. And, women managers were 22 percent more likely than male managers to be rated as “top performers.”

Similarly, per a 2018 PayScale study, men are 70 percent more likely to be in executive roles than women, by mid-career. By late career, men are 142 percent more likely to be in VP or C-Suite roles. Additionally, per a recent Pew Research Center study, women held only around 10 percent of top executive positions at U.S. companies in 2016-17.

So, if your company wants to lessen the gender pay gap, make sure to monitor your raises and promotions. It’s impossible to close the gender wage disparity if women aren’t promoted at the same rate as men. Plus, once a woman is promoted into a leadership role, it makes it more likely even more women will be promoted within your firm.

 

The Wrap

Most people probably agree it’s a good thing to pay women the same amount men get paid for doing the same job. Still, how to go about achieving equal pay is less apparent for most. Your business can use these five employee benefits to attack the causes of unequal pay and turn back the gender pay wage gap.

gender wage gap

Which Benefit Can Help Reduce the Gender Wage Gap

This month, Netflix aired an episode of their series Explained by Vox, which covered the gender wage gap in America. It’s commonly known women in the United States earn just 81 cents to every dollar a man earns.  But, this episode revealed other interesting statistics that hint at the true cause of this gender pay gap.

In this article, we’ll cover what the episode of Explained posited was one of the greatest causes of the gender wage gap in the United States. And, we’ll tell you how your employee benefits can be used to close this pay disparity. Then, we’ll detail how closing this gap can benefit your business’ bottom line.

 

The Gender Pay Gap – Explained

So, you might know the stat about 81 cents on the dollar, but what else do you know about the gender pay gap in the United States? Did you know this 81 percent declines significantly for women of color?

Black, Native American, and Latina women make 63, 57, and 54 cents respectively, for every dollar made by a man. And, despite making up 50 percent of the workforce, only 6.4 percent of CEOs in the Fortune 500 are women.

But, according to Vox, the key to explaining the gender pay disparity is to look at why it exists by examining where it exists. One of the biggest drivers behind the gender pay disparity is motherhood, especially in America. The United States ranks last out of 41 developed countries in the government-supported time off for new parents.

As of 2017, only 15 percent of U.S. workers received any paid family leave, according to the Bureau of Labor Statistics. This number is an improvement from the 11 percent it was in 2012 but is still far too small.

In 2014, research from Harvard economist Claudia Goldin showed how this lack of paid parental leave affects the pay disparity in America. According to Goldin’s research, the wage gap in the U.S. is the largest for women in their 30s. In other words, the gender pay disparity is greatest during women’s prime, childbearing years.

A new study by the Harvard Business Review demonstrates how even the length of a woman’s maternity leave can negatively affect their career. The study conducted an experiment with managerial staff.

Each manager received job applications which showed the applying women had taken either 12-months or one month of maternity leave. Managers who participated in the experiment found applicants who took a longer leave less desirable. And, both male and female managers held this opinion.

This study exposes the bias behind another couple of shocking statistics, per A Uterus is a Feature, Not a Bug. Working mothers are half as likely to be promoted and earn an average of $11,000 less in salary.

 

What Can You Do?

Each of these statistics and studies demonstrates the reality of our country’s wage disparity between genders, especially for women who are mothers. So, as a business or employer, what can you do to help close this gap?

Well, you can start by paying women the same as you pay men. Other than that, the answer isn’t as clear as it might seem. Many people may read the information above and reach the natural conclusion that paid maternal leave is the obvious and simple solution for narrowing the gender wage disparity.

But, this answer is short-sighted and ultimately wrong. The true workplace solution to tightening the wage gap between genders is paid parental leave. Now, don’t get this last point confused. Maternal leave is still better than nothing. Still, if your firm offers only paid maternal leave, it creates another difference between working men and women.

Your firm should offer paid parental leave to push both working mothers and fathers to take leave for the birth or adoption of their child. The more working fathers take parental leave, the more we challenge the notion that males should be a household’s breadwinner, and females the caretaker.

Spotify was looking to reduce this “motherhood penalty” when it implemented a six-month parental leave policy, for all parents, regardless of gender or how they became parents (adoption, surrogacy, etc.). Ninety percent of employees who used the benefit within the first six months of introducing the policy were male.

 

Read more about which employee benefits can reduce gender inequality in the workplace.

 

Creating a Parental Leave Policy

The first step to creating a parental leave policy that helps close the wage gap is to make your policy clear and concise. Make sure your employees know who’s covered, how long they can take off, how much notice is required, and what paperwork needs to be filled out.

Similarly, make sure you communicate these rules to your staff regularly. You want your employees to feel comfortable and confident in taking parental leave. Your staff needs to know they won’t miss out on opportunities, or suffer professionally if they take parental leave.

Also, make sure your company’s parental leave policy doesn’t discriminate in any way. Recently, Estée Lauder and JP Morgan had lawsuits brought against them based on the company’s respective parental leave policies.

Many parental leave policies designate one parent as a primary caregiver. Designating a single primary caregiver can make your leave policy discriminatory based on gender, sex, and sexual orientation. Based on which state(s) you operate in, this discrimination can leave your business wide-open to a lawsuit.

Finally, your parental leave should include a process to move working parents back into the fold, following their leave. Part of Spotify’s aforementioned leave policy includes such a process. At Spotify, all parents get an additional month for a return-to-work transition period. A return-to-work period lets parents ease back into the workforce.

 

How Parental Leave Can Benefit Your Business

There are many ways parental leave, and subsequently decreasing the gender wage gap, can bring to your organization. Multiple reports and studies have detailed how valuable gender diversity is for business.

A Gallup study found gender-diverse business units in a retail company had 14 percent higher average comparable revenue than units that weren’t as diverse. Similarly, it found gender-diverse units in a hospitality company had 19 percent higher quarterly net-profits than less-diverse business units.

Improving your firm’s gender diversity, through parental leave, gives your organization different information, viewpoints, and ideas. Gender diversity allows your business to serve a more diverse customer base and helps your company attract and retain talented employees.

Paid parental leave is especially important for millennial employees. A recent poll by Unum found paid family leave ranks top among all workplace perks. Fifty-eight percent of all workers ranked paid family leave as their most desired workplace perk.

This percentage jumps even further when you look at only millennials. A total of 64 percent of millennials polled, ranked paid family leave as their top workplace benefit. This makes sense because millennial households are two times more likely to have both spouses working.

And, the number of millennials in the workplace is only rising. By 2025, millennials will make up 75 percent of America’s workforce.

 

The Wrap

It’s 2018, and most people understand there is a real gender wage gap in the United States. Still, many don’t quite understand why this wage gap persists. Thanks to years of research and discussion, we now understand the “motherhood penalty” is real.

Now, the key is to take this knowledge and turn it into tangible change. Use your firm’s paid parental leave to close the gender pay gap and reduce this motherhood penalty.

gender inequality in the workplace

4 Benefits to Combat Gender Inequality in the Workplace (Infographic)

What do we know about the global gender pay gap? Well, you should know that women, on average, still make only 80 cents for every $1 a man makes. But, this tired statistic is only the tip of the metaphorical iceberg.

Gender inequality in the workplace is not harming only women. It is hurting the companies they work for, and the global economy as a whole. The McKinsey Global Institute estimates that narrowing the global gender gap could add $12 trillion to the gross domestic product.

Increasing women’s roles can have a similar effect on your organization. A study of gender diversity of firms in S&P’s composite 1,500 list demonstrated this effect. The study found that female representation in top management leads to an average increase of $42 million in firm value.

Gender diversity, like other diversity, helps to improve your company’s creativity and decision-making. These increases, in turn, help drive productivity and company success in totality.

We know that the fewer women there are in your organization, the harder it will be to claim success. But, how do we get more women in the workplace?

 

How do we decrease gender inequality in the workplace?

Decreasing gender inequality is one of those things (like trying to look cool while drinking a juice box or avoiding politics during Thanksgiving) that is much easier said than done.

Here at The Olson Group, we believe in the power of employee benefits. This belief extends to tackling this problematic gender pay gap. Your business can use its employee benefits to close any gender gaps within the organization.

Each of the following four benefits is capable of reducing specific barriers for women entering the workplace.

 

Benefits for Gender Equality by Anthony Jeanetta 

 

Benefits for Gender Equality

Feel free to share or embed this infographic on your own site. To embed click “Share” on the bottom left corner of the infographic, then simply copy and paste the code.

Learn more about flexible work arrangements and their potential benefits to your company.

gender inequality

Your Benefits Can Reduce Gender Inequality in the Workplace

“Never work just for money or for power. They won’t save your soul or help you sleep at night.” – Marian Wright Edelman

Money isn’t the reason women (or men) stay at a job long-term, but it is the reason to have a job in the first place. And for women in the U.S., the key amount of money is 78 cents.

It is widely known that women in America make roughly 78 cents for every dollar that a man makes in the same position. And minority women make even less. Still, this figure is just the beginning of the story of gender inequality in the workplace.

Over the course of the past 15 years, women’s participation in the labor force has actually declined. In 2000, the participation rate of women was 59.9 percent, according to the U.S. Census. In 2015 this rate had dropped to 56.7 percent.

According to Gallup, there are a couple factors that have contributed to the decline of women participating in the workforce.

These factors are: pay being less of a factor than other workplace attributes in women’s employment decisions, and outdated company cultures affecting women personally and professionally.

Fortunately, there are several ways that businesses can combat this gender discrimination. Your company’s benefits are a powerful tool to reduce gender inequality in the workplace.

 

How do women help business?

Before we get into what specifically your firm can do to decrease gender inequality, we must first examine how significant gender diversity is for business. Multiple reports describe just how valuable women can be to your team.

A Gallup study found that gender-diverse business units in a retail company had 14 percent higher average comparable revenue than those units that weren’t as diverse.

It also found that gender-diverse business units in a hospitality company had 19 percent higher average quarterly net profits than less-diverse business units.

Women provide another voice and point of view that your company would otherwise sorely miss. Having a gender diverse workforce can improve decision-making and increase innovation.

Ending gender inequality in the workplace could massively benefit not just businesses in the U.S., but companies around the world. A report from BNY Mellon and the UN Foundation estimated that workplace gender equality could release $300 billion in annual global spending by 2025.

 

What Benefits Can You Provide and How They Will Help?

Your employee benefits package is a major factor in recruiting and retaining the top employees. It can also be used to target specific groups of recruits. Each of the following four benefits can work to reduce specific barriers to women entering the workplace.

 

1. Paid Time Off

Paid time off, or PTO, is a paid leave plan that combines sick leave and vacation time. PTO gives employees a set bank of time off at the beginning of each year.

The difference between PTO and standard, separated, leave is that employees have a greater ability to choose when and why they are going to take their time off.

Employees now get their entire bank to use for sickness, vacation, running errands, or appointments. They no longer have to be one, or the other. PTO gives employees increased flexibility with their time off.

Paid time off boosts gender parity a few ways. First, PTO helps because it allows women with a family to schedule their time off, around any familial obligations.

Having PTO allows women to take children to appointments or stay home if a child is ill. According to a Gallup poll, more than half (54 percent) of women who don’t work and have a younger child say their child is a major reason why they are not working.

PTO gives women the flexibility to take care of a child’s major needs without affecting their ability to work. The positives PTO offers are very similar to the next benefit.

 

2. Flexible Work Options

Flexible work options include flexible location, flexible schedule, and flexible time. Each of these options presents unique benefits, especially for working women.

Flexible location gives your employees the ability to choose where they work. A flexible schedule gives your staff the ability to choose when they work. Flexible hours give your employees the power to choose the number of hours they work during the week.

Similar to PTO, the increased flexibility (duh) offered by these options allow women with a family to work without giving up a dramatic amount of time around the home.

The previously mentioned poll by Gallup, also found that 53 percent of stay-at-home moms say flexible hours/ work schedules are a major factor in their ability to take a job. These work options let mothers work from home, work around their children’s school, and work while on the go.

Read more about flexible work options.

 

3. Recognition

One benefit that is often overlooked is proper recognition. Almost everyone enjoys recognition and knows that it is imperative to employee happiness. Still, it is crucial to give recognition in a way that helps to improve gender equality.

Research from Stanford University’s Clayman Institute for Gender Research uncovered why proper recognition for women in the workplace is so important.

Their research found that men tend to attribute a woman’s success to external factors and “luck” rather than attributing it to her respective individual effort and abilities, as they would for a man.

For this reason, it is crucial that managers, when designating recognition or promotions, have specific details and instances recorded for why that employee is being recognized.

To be clear, your leadership should record these reasons for recognition in regards to both men and women. Having concrete, and detailed reasons for recognition eliminates any doubt as to why that employee is being recognized or promoted.

 

4. Parental Leave

The last benefit your firm can use to reduce gender inequality in the workplace is parental leave. Take note that you should offer “parental” leave, not just maternal. Although, maternal leave is a superb start.

Paternal leave is paid time off for new parents, mom or dad, after the birth or adoption of a child. This leave provides parents with an opportunity to take care of their child without the stress of work getting in the way.

Additionally, paid parental leave further reduces employees’ stress because they don’t have to worry about money, like they would if they took unpaid leave, such as FMLA.

Money is an enormous source of stress in this country. A Harris Poll conducted for Purchasing Power found that 80 percent of employees are under financial stress.

This stress can have a significant negative impact on businesses. Stress costs employers an average of $300 billion a year in stress-related healthcare and missed work.

Giving parents paid leave for a new child, helps to alleviate the financial stress of this situation. Parents who are less stressed also help your company, because they are able to return, and be more productive, sooner.

Offering parental leave is especially critical to lowering gender discrimination in the workplace. When fathers are taking leave for new children, it normalizes the act across genders. This normalization reduces the likelihood of gender discrimination in hiring and promotion decisions.

 

The Wrap

There are simply not enough women participating in the labor force, and businesses suffer as a result. According to Forbes, the McKinsey Global Institute estimates that narrowing the global gender gap could add $12 trillion to the world’s gross domestic product.

Furthermore, a study of gender diversity of firms in S&P’s composite 1,500 list revealed that female representation in top management leads to an average increase of $42 million in firm value.

Having a gender-diverse workforce will only help your company. So if you are still contemplating what to do, don’t. Use these four benefits to eliminate gender inequality in the workplace.

Businesses are like men. The great ones have great women behind them.

Guy demonstrating how easy employee benefits are by crushing a wall

7 Ways to Reduce Gender Discrimination in Your Workplace

Women make up roughly 50 percent of the world’s population. They make up 47 percent of America’s labor force. Still, women in the workplace face a significant gap in pay and opportunities compared to their male colleagues.

Women in professional specialties earn 27.3 percent less than men in the same positions and make up just 14.2 percent of senior executives in the S&P 500. So, if your company can reduce gender discrimination, knock down gender barriers, and improve its gender diversity; it can find greater success.

Improving your company’s gender diversity gives your organization different information, viewpoints, and ideas. It also allows your business to serve a more diverse customer base and helps your company attract and retain talented women.

All of these ultimately affect your business’s bottom line.

gender discrimination

A Gallup poll found that gender-diverse business units in a retail company had 14 percent higher average comparable revenue than those units that weren’t as diverse. It also found that gender-diverse business units in a hospitality company had 19 percent higher average quarterly net profits than less-diverse business units.

Therefore, to get the best performance from your company, you should look for these seven ways to reduce gender discrimination in your workplace.

 

1. Build Diversity from the Inside Out

Slack, a messaging app company eliminated the years of experience requirement from its job postings. This process helped to encourage qualified women to apply who otherwise wouldn’t because they took time away from the workforce to raise children or care for aging parents.

gender barriers

Deborah Rosado Shaw, the chief global diversity and engagement officer of PepsiCo, recommends that you build diversity from within by having your employees support their female colleagues.

Helping women in the workplace does not just mean being nice. Similarly, it doesn’t entail a series of empty, positive feedback. True gender inclusion means saying something or sharing feedback that helps women to stand taller and be more productive.

 

2. Bring Men Into the Fight

Companies should educate male employees on gender barriers and encourage them to help their women colleagues combat these obstacles. Alexis Jones, the founder of ProtectHer, succeeds in informing men about these barriers by making her message personal and addressing her audience as her allies.

These strategies help to get men interested and engaged in her message. When you engage men and give them the proper knowledge and tools, they too can become advocates for women.

 

3. Teach Employees About What is NOT Sexual Harassment

Yes, it is still important that your staff learn what is considered sexual harassment. Still, it’s just as important that you teach your workers what behaviors are not considered sexual harassment.

Encourage male employees to ask female colleagues on a coffee run, or to join them for lunch, and assure them that this is not harassing behavior. Including women in social events helps to promote a greater sense of gender equality in the workplace.

 

4. Establish Networking Initiatives

Creating networking strategies that include all employees, aids in knocking down workplace-gender barriers.

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Events such as corporate outings and programs like mentoring build employee connections. These relationships develop an employee’s sense of belonging and help to erode gender barriers.

 

5. Emphasize Inclusion of the Opposite Sex

Excluding women is not the way to solve sexual harassment. Rather, as with number three on this list, employees need to learn to include female colleagues in their social circles. While this inclusion may be uncomfortable at first, it will ultimately bolster workplace gender equality, and improve your organization’s overall performance.

 

6. Educate Employees on how to Handle Workplace Romance Situations

Educate employees on how to steer, professionally, through sticky situations that can arise due to office romances. Guide employees through such things as how to properly obtain consent and how to turn down a co-worker.

 

7. Eliminate Secrecy Surrounding Workplace Romances

Employees will simply keep an office romance a secret if these relationships are discouraged. When a workplace romance is kept secret, your business can’t eliminate favoritism that could result from these relationships.

gender barriers

The elimination of secrecy surrounding workplace romances also reduces the rumors that occur when these relationships are kept secret. Similarly, these rumors can hurt the chances of male colleagues including women in social events.

 

Learn more about how to increase gender diversity through your employee benefits.

 

The Wrap

Each of these methods is an exceptional tool to reduce gender discrimination in your workplace. Because a more gender-diverse workplace can boost productivity and increase profits.

Breaking gender barriers improves both the moral and financial state of your company. These seven steps are easy and inexpensive ways you can halt gender discrimination throughout your business.

 

Resources

http://money.cnn.com/2015/03/24/investing/female-ceo-pipeline-leadership/
http://fortune.com/2016/06/27/united-state-of-women-gender-barriers/?iid=leftrail
http://blog.shrm.org/blog/5-ways-to-break-down-gender-barriers-in-the-workplace