The Gender Pay Gap in 2020: Is Flexibility the Key? (i4cp login required)

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We know more in 2020 about the complex issue of gender
equity in the workplace than ever before. But have the multiple and momentous upheavals of the past 12 months helped or
hindered progress toward gender pay equity?

The good news amid so much awful this year is that more
employers are conducting pay audits to determine if men and women are paid
equally for comparable work than they were in 2018, according to research from
the Institute for Corporate Productivity (i4cp).

An i4cp survey conducted this month (a
follow-up to our groundbreaking research of 2018
) of more than 200 business
professionals found 80% reporting that their organizations currently conduct
pay audits or are planning to do so, up significantly from 59% in May 2018.  

Has your
organization conducted a pay audit to determine if men and women are paid
equally for comparable work?

Although the number of professionals who told us that they
perceive gender pay inequity as a problem in their organizations is relatively
low (just 22% both in 2018 and in 2020), women are still more likely to say
this is the case in their organizations, and we see only modest shifts in perceptions
about pay inequity along gender lines.Gender Pay Equity

In 2018, 25% of women said they believed the gender pay gap to be a
problem in their companies while 13% of men agreed.

In 2020, the number of women who reported they believe pay
inequity is a problem in their organizations remains largely unchanged—24%—but
the number of men who had this same perception grew to 19%.      

Response to a new question we added this year: “Beyond
identifying whether gender pay disparities exist, does your organization take
steps to understand why the disparities exist?”
we found that
overwhelmingly (83%), organizations are indeed taking the step post-audit to
identify the factors leading to gender pay gaps, and an additional 11% have
plans in the works to do so too. Only 2% said this isn’t happening in their
companies and there are no plans to do so in the future.

Both the 2018 and the 2020 i4cp surveys are built upon six
key strategies we noted to be consistently cited by researchers and thought
leaders alike as effective practices to address gender pay inequity via a
comprehensive literature review:

  • Conduct a pay audit to determine if men and
    women are paid equally for comparable work
  • Create transparent “salary bands” (i.e., pay
    ranges for certain roles and levels)
  • Make pay transparent (i.e., salaries and the
    formulas to reach them are openly available)
  • Eliminate salary negotiation for new hires
  • Stop asking candidates to disclose their salary
    histories
  • Offer flexibility in work arrangements for all
    employees

Beyond pay auditing, here’s where things stood in terms of
adoption of these practices in 2018 and progress (or not) in the ensuing 30 months:

Create transparent “salary bands” (i.e., pay ranges for
certain roles and levels)

In 2020, the number of those who said their organizations have
salary bands doubled from what it was in 2018: 80%. The number who said no we
don’t have salary bands in my company, and we have no plans to create them dropped
to 10% from 38% in 2018. So, progress is clear and resistance to creating
salary bands is in decline, which in turn decreases the odds of factors such as
bias and just plain old arbitrary decision making coming into play when it
comes to pay.

Make pay transparent (i.e., salaries and the formulas to
reach them are openly available)

In 2018, a combined 32% reported having pay transparency in
place or plans to do so; a resounding 65% said no, we don’t do that and there
are no plans to. In 2020 we see movement—the “no way, no how, not now, not ever”
number dropped slightly (from 65% to 51%) and a combined 46% reported having salary
transparency now or plans to.

Eliminate salary negotiation for new hires

The majority of 2018 survey participants (65%) said salary
negotiation for new hires had not been eliminated and there were no plans to go
there in the future. A combined 15% had eliminated salary negotiations for new
hires or had plans to do so.

In 2020, the number the majority of those who said salary
negotiation had not been eliminated and there were no plans to go there were up
a few percentage points (up to 71% from 65%). And just 18% had eliminated
salary negotiations for new hires or had plans to do so.

This is a strategy that is often suggested as a remedy for
gender pay inequity that some may say perpetuates gender bias in and of itself
because it implies that women aren’t as good as salary negotiation as men—this
is a topic of debate that will likely continue.

Stop asking candidates to disclose their salary histories

A combined 33% said they have voluntarily stopped asking for
salary history information or had plans to do so in 2018; nearly a quarter said
no and there were no plans to stop. Of note, 21% said they had stopped asking
for salary history because they operate in regions that have passed legislation
forbidding it.

We see a shift here in 2020— a combined 43% said their
organizations have voluntarily stopped asking candidates re: salary
history or have plans to. The number of those in 2020 who said that their organizations
have not stopped and had no plans to do so was down nearly half (13%) of what
it was in 2018 (24%).

The operative word “voluntary” is worth considering—are
organizations doing this because they anticipate an eventual legal mandate to
stop inquiring about salary history in places where it isn’t already? Or because
they want to ensure consistent recruiting practices? Because it’s just the
right thing to do? A combination of some or all of these?

Offer flexibility in work arrangements for all employees

The provision of flexibility across the enterprise is
thought to be a strategy that prevents women primarily from having to make a
binary choice between work and family, which is why it too is so often cited as
a strategy to address pay gaps.

If we learned nothing else in 2020 it is that effective and
productive work from home is possible. Is it ideal? Not for everyone,
especially with the added element of a pandemic and the closure of schools and
other supportive resources in the community.

In 2018, long before a global health crisis was on the
horizon, a combined 58% of survey participants told us that their organizations
offered or were planning to offer flexible work arrangements to their employees.
The number of organizations that did not offer flexible work and had no plans
to do so was low—18%.  

But here’s the big headline: This month (December 2020), we
asked survey participants if their organizations offered flexibility to all
employees before the COVID-19 pandemic began—35% said yes they did, with
another 10% planning to do so pre-pandemic. So that number was trending
downward from 2018 to 2020 pre-pandemic. And nearly half (47%) said no, they
did not offer employees flexibility in work arrangements pre-pandemic, and
there were no plans to do so.

Most (56%, up from 35% pre-pandemic) of survey participants
reported in 2020 that since the emergence of the pandemic, their organizations
offer flexibility to all employees. Half (20%, down from pre-COVID 47%)
reported that their organizations do not offer flexibility and have no plans to
do so.

What will the post-pandemic look like in terms of gender
inequities in the workplace? With the continuance of more flexibility, it’s
possible that we will say a narrowing of the gap. But time will tell.

Productivity

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