Gender Pay Equity: How HR Can Accelerate the Path
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Gender pay equity: How HR can accelerate the path
Dave WeisbeckChief Strategy OfficerVisier
December 2016
Agenda
Introduction Why Gender Equity Matters to the Business The Manager Divide: A Key New Finding How HR Can Accelerate the Path to Gender Equity Q&A
Fueling the Datafication of HR:Visier is how the best brands are saying
goodbye to guesswork, and hello to insights
Visier Workforce Intelligence
WORK FORC E P L ANN I NG
WORK FORC E ANA LY T I C S
TA L EN T A CQU I S I T I ONANA LY T I C S
Great companies consistently make the best decisions about what to do, how to do it, and
why.
Exceptional companies know the best people decisions drive the best business outcomes
Customers Profits Revenue
Banks with greater employee retention achieve higher customer satisfaction.
Retail outlets with highly engaged employees are more profitable.
Companies with a more diverse workforce outperform others.
Why gender equity matters to the business
The benefits of gender diversity
“Business teams with an equal gender mix perform better than male‐
dominated teams in terms of sales and profits.”
‐ Harvard Kennedy School
The Impact of Gender Diversity onthe Performance of Business Teams,
Harvard Kennedy School, 2013
“Companies in the top quartile for gender diversity
are 15 percent more likely to have financial returns above their respective
national industry medians.”
‐McKinsey
Why Diversity Matters, McKinsey, 2015
The topic most commonly related to Gender Equity?
Pay Equity
The gender wage gap: A slow correction
Women’s earnings as a percent of Men’s
JS1
Slide 11
JS1 Josie Sutcliffe, 11/4/2016
Since 1963: “Equal Pay for Equal Work”
US Equal Pay Act
Prohibits wage discrimination between men and women in same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions
Pay differentials are permitted ifbased on seniority, merit,
quantity/quality of production,or factor other than sex
It is employer's burden to prove pay differential is valid
Pay discrimination: Risk to employers
19,724 charges underthe Equal Pay Act since
1997
About 1,000 chargesper year
Companies face reputational
and financial riskif charged
New in 2017/18: Pay Equity Reporting Changes
• Every year, employers with 100 or more employees need to fill in EEO‐1 form
• New pay data would help enforce federal pay discrimination laws
HR has a key role to play to reduce risk – How will you:
Ensure you aren’t blind‐sided by the results the first‐time you fill in the new report?
Continuously monitor pay equity to see where the greatest risks are?
Discover whether pay disparities exist for valid reasons?
Get insights for how to address the risks?
If a company pays men and women equally for equal work, has it achieved gender equity?
Despite decades of tracking and research, publicly available benchmark data on gender equity is limited
1. BLS Reports, Women in the labor force: a databook,
December 2015.
What is Visier Insights?
Anonymized, standardized subset of
aggregated Visiercustomer data
Equal pay for equal work alone will not close the wage gap
How do salaries for men and women differ by age?
When does the Gender Wage Gap occur?
Average male salary by age
Average female salary
by age
Age 32 is the inflection point
Why does this widening of the Gender Wage Gap occur? Is it generational? NO
The wage gape narrows for older workers – if generational, it should
widen further
If it were generational, we would expect to see bias in promotions by age
Visier Insights showed the overall average promotion rate in 2015 was 12.6—a rate that had no significant difference for men and women, across ages
So, we focused our lens on one type of promotion and found: A higher percent of men held manager positions than women
Percent of men who are managers
Percent of women who are managers
The Manager Divide: A Key New Finding
www.visier.com/gender
Why does this matter?
With managers* earning on average 2x the wages of non‐managers, the Manager Divide—an underrepresentation of women in manager positions—directly drives the gender wage gap.
*Manager = Someone responsible for overseeing or directing the work of a group (or groups) of individuals
Closing the Manager Divide would reduce the gender wage gap
Average male salary
Average female salary
Average female salary if same % were managers and had equal
pay
Average female salary if same % were managers
Note:
The Manager Divide compares the percent of women who are managers and the percent of men who are managers
The amount of men or women in the workforce, therefore, does not impact the calculation
Why does the Manager Divide occur?
The Manager Divide happens at the same time women are dropping out of the workforce
Why does the Manager Divide occur?
Which overlaps with the childcare years
The Motherhood Penalty
Sweden: A Case Study in the Impact of Parental Leave on Pay
1970s Sweden changed maternity leave to parental leave – available to mothers and fathers
Parent on leave would receive most of full salary for first year
The result Female employment rates and birth dates became highest in developed world
Sweden: A Case Study in the Impact of Parental Leave on Pay
However: Share of fathers, who typically held the higher salary, taking parental leave stalled at 6%
Until 1995: “Daddy leave”: a monetized incentive for fathers to take parental leave
Percent of fathers taking leave soared to 80%
The results
Each additional month that the father stays on parental leave increased the mother’s earnings by 6.7%
Fathers, on the other hand, did not experience any earnings impact from mothers taking parental leave
Swedish Institute of Labor Market Policy Evaluation, 2010
How HR Can Accelerate the Path to Gender Equity
HR can most directly impact Gender Equity:
Look to increase the female ratio at every stage in your hiring process –especially for manager / leadership roles
Analyze your benefits plans and promote changes
Do you have maternity and paternity leave?
Support meaningful paid parental leave that is equal for both women and men ‐‐and socially acceptable for both to take
Increase measurement of equity in rollout of HR policies
Increase measurement of equity in rollout of HR policies
Use workforce intelligence to discover pay equity issues
• Adapt programs and policies to achieve pay equity• Use data to support validity of apparent pay disparities• Confirm valid reasons for pay differentials—such as longer tenure, more education, or higher performance
Pay Equity is only one layer: Diversity is another
Society: Other Considerations
Support meaningful paid parental leave that is equal for both women and men ‐‐ and socially acceptable for both to take
Support programs that increase the availability of good quality affordable childcare for all parents
Ensure it is socially acceptable for both mothers and fathers to make use of flexible working time arrangements to care for children
Develop and support long‐term programs aimed at removing the gender bias and social taboos associated with career choices
Download the report at www.visier.com/gender
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Disclaimers
*This webinar is designed to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. *This webinar provides general information only and does not constitute legal advice. No attorney-client relationship has been created. If legal advice or other expert assistance is required, the services of a competent professional should be sought. We recommend that you consult with qualified local counsel familiar with your specific situation before taking any action.