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Much is made of the gender pay gap: how big it is or isn’t, why it exists and, of course, how to get rid of it. Many companies are now investigating whether their own data shows they pay men and women differently for similar work.
The impetus to do so stems in part from the emphasis the Obama administration has put on equal pay. In early 2018, the Equal Employment Opportunity Commission will require employers with more than 100 workers to include information about what they pay and to whom. U.S. firms with operations in the U.K. face a similar law taking effect the same year.
Executives and recruiters say the push is also coming from workers who are demanding more transparency from employers.
“Companies are taking action now to evaluate where they stand, and the reality is that most just don’t know,” says Dawn Lyon, vice president of corporate affairs for Glassdoor, a company that allows workers to review their employers based on things such as pay, benefits and corporate culture.
Until recently, she says, Glassdoor didn’t know whether it had a pay gap, so it ran the numbers.
“If we just look on average, we have a 20 percent pay gap,” Lyon says. That’s an average. But when Glassdoor took experience, education and performance into account, the gap disappeared — and in some cases women in some roles came out ahead.
Calculating the pay gap
Evaluating the gender pay gap is tricky — precisely because how you calculate it makes a big difference. And there is no uniform algorithm that all companies use to make adjustments for variables.
There’s an often cited statistic that nationally women earn about 20 percent less than men. But after adjustments for things such as title and tenure, Lyon says that narrows to about 5 percent.
There are many studies that show different factors that shape the gap. Earlier this year, employment analytics firm Visier released a study showing that differences in pay between men and women increase at age 32. It also says the gap would narrow considerably if more women reached and remained in managerial ranks.
There are jobs where the gap is very big, even after adjustments. Among software engineers, it’s 28 percent. Chefs, dentists, psychologists, pharmacists and doctors all have adjusted pay gaps of 20 percent or more.
How to fix it?
Glassdoor is just one of many firms offering pay gap analysis for employers. Salary.com is offering its own pilot program to some employers, and companies are also hiring auditors and lawyers to conduct their own reviews.
Salesforce.com says it spent $3 million to close its pay gap, based on a pay data review it conducted last year. CEO Marc Benioff told CNN in March, that identifying the problem — and fixing it — was easy.
“We know every employee’s name, their address, we know how much they are paid, we know their title,” he said. “Every company does. That’s the modern world. And with just the push of one button, I was able to know exactly what the discrepancy was and how I needed to fix it, which I’ve now done.”
Other employers generally do not agree.
Cheryl Behymer, an attorney who represents employers, says the process is not simple because many employers keep databases with workers’ demographic information separate from payroll information — precisely because it does not want to encourage pay discrimination.
Behymer says previous efforts by regulators to require federal contractors to disclose pay data failed because the information could be misleading.
For example, she says, say someone worked a night shift that earns more than working dayside. “That could look like there’s discrimination potentially present, when in fact none actually exists,” she says.
False positive and false negative results could lead to worker lawsuits, which are already on the rise. She cautions clients to keep pay data information closely held.
“We wouldn’t want the employer to have something that could be used against it as an admission that there was an inequity that required adjustment,” Behymer says.
That’s not to say adjustments shouldn’t be made, just made quietly in a way that doesn’t inspire more complaints, she says.
The companies that have so far gone public with their pay data results, however, aren’t doing so quietly.
GoDaddy, a domain-name registrar, conducted a gender pay analysis last year that led to raising the salaries of about 70 people. Katee Van Horn, vice president of engagement and inclusion, says they told the people why their pay was increasing.
“It’s great to be able to share: ‘hey, we’re doing the right thing,’” she says.
It wasn’t just about adjusting pay.
“While our pay was pretty close, we’re still looking at ‘are women getting promoted at the same pace that men are?’ And we have some work to do there,” she says.
She says GoDaddy is also trying to hire more women in its managerial ranks.
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