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Leadership
7 Min Read

4 Strategies To Help Organizations Fix the Gender Wage Gap

Cara Pelletier

At a previous employer, I discovered I managed a group of employees who were all making more than me.

After finally being promoted to a senior role and getting a double-digit percentage salary bump, I found out how my pay compared to my team. 

The joy I felt about my promotion and being rewarded for my performance turned into disbelief and anger. Even though I appreciated the salary increase, I couldn’t help but wonder why the company underpaid me for so long.

Underpaying employees saves company funds at the expense of great talent. Organizations who pay their employees their worth help employees feel secure and excited to do their job. Yet, women still deal with a wage gap at work.

Let’s dive deeper into this topic with facts on the gender pay gap and what organizations can do to fix it.

The gender pay gap still exists

Recent numbers about the gender pay gap have revealed that women make 84 cents for every dollar a man makes. This gap puts women behind in building wealth and providing for their families. Did you know that Pew Research Center reports that “it would take an extra 42 days of work for women to earn what men did in 2020?” When you look at women of color or older women, the pay gap can become even more pronounced.

While women have made a lot of progress in the last few decades, there is more work to be done. Women are still underrepresented in higher-paying leadership roles. For example, women make up just 15% of the CEOs of Fortune 500 companies.

When it comes to raises and promotions, women face an uphill battle. Even though women ask for raises at the same rate as men, they are less likely to get them. Women who advocate for their needs and negotiate aren’t always rewarded for their efforts.

4 strategies to help organizations fix the gender wage gap

Thankfully, your organization has an opportunity to create a more equitable space for the women on your team. was underpaid for my work.

Here are four practical strategies to ensure fair wages across genders at your organization.

1. Start women off with a fair wage during recruitment

Paying women for their work starts during the recruitment process.

The recruitment process can be unfair for women because companies might:

  • Base new salaries on what they currently make, typically an underpaid amount.
  • Ask women to come up with a number that might be drastically less than the company can afford to pay.
  • Expect women to negotiate an initial offer instead of making a best and final offer.

Companies working on pay equity have made several shifts in their policies around pay during the recruitment process.

One big change that your organization can make is deciding on a range before hiring anyone. 

For example, if you are looking for a software engineer, you might come up with a salary of $80,000-$120,000. Rather than basing an offer on previous salary, base it on fixed criteria like experience, education, or knowledge.

Companies can define all of this before they ever interview a candidate, and you can place the range in the job description. Then, an HR team can build out a matrix to make it easy for the hiring manager to understand what the candidates they are interviewing could make.

Once you interview candidates, avoid questions about what they were paid or what salary they want. Instead, you can ask if the salary range meets their expectations.

Lastly, adopt a “best offer” policy to avoid negotiations on salary/equity that might give some employees an unfair advantage. Let your potential team members know that you will present them with the best offer based on your company’s rubric.

2. Give women equitable opportunities to progress with performance management and succession planning

It’s easy for women to get passed over for advancement and fall behind their male counterparts, even if they started at the same place. Women have family and caregiving expectations and fewer opportunities for managerial advancement that can set their pay back over time.

Companies can combat this by taking a look at their performance management and succession planning process.

Performance reviews often play a large role in compensation, so we have to train managers to give equitable feedback and do department and company-wide performance calibrations to ensure managers judge everyone appropriately. Focus on data for:

  • Women
  • Women of color
  • Disabled women
  • LGBTQ+ women
  • Women who are parents or full-time caregivers

Looking closely at data from these groups compared to men will help your team ensure fairness.

Next, you want to give your succession planning experience the same deep dive. How does your organization spot top talent for management tracks? Compare the demographics in your succession pipeline to your overall employee population. Do you notice any disparities in gender or race as you move to higher levels of your organization? 

As you hold succession planning conversations with leaders, be on the lookout for any unconscious bias that might be holding women back; for example, leaders may assume that working mothers won’t have the time to invest in higher-level positions.

3. Hold your organization accountable for fairness by providing compensation transparency

Does your organization have a formal compensation and benefits structure?

Unfortunately, pay transparency isn’t the average experience for most companies. According to research from the Institute for Women’s Policy Research reported in Time, 17% of private companies offer pay transparency, with 41% of companies discouraging it and 25% prohibiting the practice.

While many companies don’t follow pay transparency, it can lead to a better experience for the women in your organization. Pay transparency holds your company accountable to ensure that everyone is getting what they deserve (which leads to happier employees for you.)

  • Establish job and compensation levels as an HR department.
  • Ensure that existing salaries fit those new levels and adjust compensation as needed to keep everyone fairly compensated.
  • Share those compensation structures with your team, so they know what to expect and how to make more money in your organization.
  • Encourage your employees to speak up if they are feeling underpaid. Around 43% of U.S. workers feel underpaid, which can negatively impact women who might leave to find better pay.
  • At least once a year audit your employee compensation to ensure there isn’t a gender gap with your compensation strategy.

4. Help the women in your organization make the most of their compensation with financial literacy benefits and training

Lastly, you can help the women on your team by providing access to financial literacy benefits and training.

Understanding equity, stock, retirement, and other financial benefits can be overwhelming for anyone in your organization.

For many women, especially women of color, women who are immigrants, or first-generation high-income earners, making sense of their financial benefits may not be something they’ve learned from family or friends.

Companies are starting to offer access to financial planners and planning tools to make it easier for employees to understand what their benefits mean and what they can do for them.

Creating an equitable workforce by utilizing transparent and fair compensation practices

Employers are uniquely positioned to provide stable lives for their team members. Your employees work hard to create a thriving company, and you need to compensate them for their work.

Often women are underpaid, and while this can save company funds, it creates rifts when women find out how much money they have lost. Companies have to own up to how members of their teams are often underpaid and work to create a more equitable space. Following the strategies highlighted in this article will help move your organization, and the women working in it, forward.