The gender wage gap has existed since women started entering the work force and doing more than just “womanly” jobs (i.e. teachers, nurses, nannies, and governesses). There are many who like to claim that there really isn’t a wage gap and that it only looks like women make less than men. That, they say, is because many women choose to stay home with their kids, which means they aren’t paid at all, or they choose to go into professions that are less likely to pay well, such as being an elementary school teacher instead of a college professor or being a nurse instead of a doctor.
Many people don’t realize that there’s an adjusted wage gap that takes into account things like occupations, education, job experience, and how many hours are worked. When all those factors are taken into account, there is still a gender wage gap. This is smaller than the much-touted statistic that says women make 78 percent of what men make, but it’s still a gap. Some industries and positions have a greater gap than others. For example, women chief financial officers make 16 percent less on average than men in the same position.
In sales, women earn 63 cents for every dollar men earn, while in health care, women earn only 72 cents. Even in education, which is a female-dominated industry, women only earn 88 cents for every dollar earned by men. One of the biggest influencers of the wage gap is race. Where white women receive on average 82 cents on the dollar, black women earn only 65 cents and Hispanic women earn only 58 cents. If you own a startup, there are ways your company can buck trends and address the wage gap.
Be a trendsetter
Startups are considered by many to be revolutionaries. Where established companies are considered to be stodgy and entrenched in their bureaucracy, startups are more flexible, typically have younger, idealistic employees, and are willing to push boundaries to create change. Despite this, many startups aren’t using their innovative status to help resolve the issue of the gender wage gap. You have the chance, however, to change this trend and use your startup as a platform for social change. Consider the issue and come up with a reasonable solution, or at least try something new and see how it goes.
Create transparency
One trend you can set is one of transparency. Don’t treat salaries like a closely held secret. Instead, make transparency a core value of the company and don’t discourage employees from discussing salaries. Maybe even post salaries openly. Invite any employee who is confused about why another employee is making more to have a frank discussion about the reasons. It’s harder to keep the status quo of gender bias when information is freely available.
Though it may seem like transparency is a way to cause tension, if done the right way, it can do the opposite. Take the startup SumAll. In the first four years of its existence, transparency was made a core tenet of the company’s culture. During that time, it experienced 1,000 percent growth each year, amassing more than 350,000 clients while retaining 90 percent of its staff.
By having transparency, there’s no question of whether one person makes more or less than another. It truly is equal pay for equal work, not a belief that you might get a raise if you suck up to your manager. As long as your company truly is paying its employees equally (and remember equal doesn’t mean the same), there’s no reason to be secretive about this information.
Base salary on skills, experience, and location, not previous salaries
If you look at what a woman is making at her current position, you’ll only see what she was paid, not what she is worth. Her pay likely reflects unequal pay, especially if she has 10 or more years of experience. It’s been found that the more experience workers have, the wider the pay gap becomes.
Set a new standard at your startup. Let everyone in the company know that previous salaries will not be used to determine salaries when new employees are hired. Instead, use industry standards for that area along with considering the new employee’s experience and skills. Consider what value the new employee brings to the company rather than what he or she might accept, based on what the candidate was paid previously. By not having that information in front of hiring managers or HR representatives, it won’t influence their decision when creating an offer.
Remove names from resumes and job applications
By removing the names from a job application, HR representatives do not have the ability to prejudge a candidate based on the person’s name, which can offer an idea of a candidate’s gender and race. By using this strategy, candidates will not be eliminated because of prejudice, whether inadvertent or deliberate. Once a candidate is chosen, it helps again when creating the offer letter to avoid lowering compensation due to race and/or gender.
Reasons for gender wage gap
Because the gender wage gap has been entrenched in our society, it’s become a stage four cancer that can be reduced, but seems impossible to remove completely. A study, conducted in 2011 by British CMI, showed that if the gap between male and female executives continues to close at the current rate, pay will not be equal till 2109. That’s almost 100 years from now! So what causes this gap?
Perception of gender roles
One reason a woman might make less is because of how the employer sees that woman’s role in her family and in society. Women have traditionally stayed home to keep house and take care of children. It’s only recently — in the last 30 years — that families have relied on two incomes in order to get by.
Still, employers are more likely to look at a man and see someone who needs to “bring home the bacon.” It doesn’t matter that the man might be single with no family to take care of, while the woman might be a single mom trying to provide for five kids.
Women are less likely to negotiate
A study, discussed in the New Yorker in June 2014, found that only 7 percent of women negotiate their salary while 57 percent of men do. It might seem like a no-brainer to negotiate when being offered a new position, but many women encounter unexpected pushback when they do, which is probably why so few women even try.
You’d think that it wouldn’t hurt to ask, but many women have seen a job offer withdrawn when they tried to negotiate. Or they’ve found that a potential employer is unwilling to budge, even a little bit, from the original offer.
Why are women more likely to be rebuffed? It could be the common problem in which assertive women are seen as aggressive and “bossy.” Potential employers may think that if a woman acts this way during salary negotiations, she may be hard to work with. Men, on the other hand, are seen as assertive and go-getters.
Hiring managers view skills differently
When deciding on a salary, what value a hiring manager places on specific skills affects what the manager thinks the candidate is worth. If the manager values skills often found in men, he or she will be willing to pay more for a male candidate and less for a female candidate. While in the interview phase of the hiring process, interviewers focus on a woman’s social skills rather than her competence. An excuse for a female candidate not getting a job might be more along the lines of not fitting in with the company culture rather than not being competent.
More men are at the top
It’s a fact that people tend to be attracted to those that are like themselves. It’s no wonder then that because there are more men in leadership positions, more men are promoted by those men to be in leadership positions. It’s not necessarily that they have anything against women; it’s just that they have a favorable bias towards other men.
In the end, startups can be the voice for a generation of women who deserve to be paid the same as men. Provide transparency for pay, do your best to avoid any biases, and be mindful of biases that you may act on subconsciously. Do this, and you can help eliminate the causes of gender wage gaps, at least at your own company.
