gender pay equity: how hr can accelerate the path
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Josie Sutcliffe VP, Marke4ng Visier
Gender Pay Equity: How HR Can Accelerate the Path
#WFwebinar
Gender pay equity: How HR can accelerate the path
Josie Sutcliffe VP, Marke@ng Visier November 2016
Agenda
§ Introduc@on § Why Gender Equity MaNers to the Business § The Manager Divide: A Key New Finding § How HR Can Accelerate the Path to Gender Equity § Q&A
Fueling the Datafica@on of HR: Visier is how the best brands are saying
goodbye to guesswork, and hello to insights
Visier Workforce Intelligence
WORKFORCE P LANNING
WORKFORCE ANALYT ICS
TALENT ACQUIS I T ION ANALYT ICS
POLL: What best describes your role?
§ HR Prac@@oner / Generalist § HR Analyst / Planner § HR Leader § Talent Acquisi@on Prac@@oner § Other
Great companies consistently make the best decisions about what to do, how to do it, and
why.
Excep*onal companies know the best people decisions drive the best business outcomes
Customers Profits Revenue
Banks with greater employee reten4on achieve higher customer sa4sfac4on.
Retail outlets with highly engaged employees are more profitable.
Companies with a more diverse workforce outperform others.
Why gender equity maNers to the business
The benefits of gender diversity
“Business teams with an equal gender mix perform beAer than male-‐dominated teams
in terms of sales and profits.” -‐ Harvard Kennedy School
The Impact of Gender Diversity on the Performance of Business Teams,
Harvard Kennedy School, 2013
The benefits of gender diversity
“Companies in the top quar6le for gender diversity
are 15 percent more likely to have financial returns above their respec6ve na6onal industry medians.”
-‐ McKinsey
Why Diversity MaRers, McKinsey, 2015
The benefits of gender diversity
“$4.3 Trillion: The amount the U.S. could add to its annual GDP by 2025 if women were to aRain full
gender equality in the workplace.” -‐ McKinsey Global Ins4tute
hRp://www.mckinsey.com/global-‐themes/employment-‐and-‐
growth/how-‐advancing-‐womens-‐equality-‐can-‐add-‐12-‐trillion-‐to-‐global-‐growth
The topic most commonly related to Gender Equity?
Pay Equity
Has your company signed the Equal Pay Pledge?
§ White House Equal Pay Pledge
§ Today there are over 100 companies signed, that collec@vely employ millions of Americans
The Equal Pay Pledge
§ 28 companies ini@ally signed on to the pledge, including Airbnb, Amazon, American Airlines, Cisco, Expedia, Gap Inc., Johnson & Johnson, and more
§ The most recent commitments include a diverse range of employers, including AT&T, eBay, The Estée Lauder Companies, InterCon@nental Hotels Group, Mastercard, Yahoo, Square and Zillow Group
The Equal Pay Pledge
We commit to:
§ conduc@ng an annual company-‐wide gender pay analysis across
occupa@ons
§ reviewing hiring and promo@on processes and procedures to
reduce unconscious bias and structural barriers
§ embedding equal pay efforts into broader enterprise-‐wide equity
ini@a@ves.
The gender wage gap: A slow correc@on
Women’s earnings as a
percent of Men’s
At the current rate, it will take more than 100 years to achieve gender parity at the C-‐Suite level
Since 1963: “Equal Pay for Equal Work”
US Equal Pay Act
Prohibits wage discrimina4on between men and women in same establishment who perform jobs that require substan4ally equal skill, effort, and responsibility under similar working condi4ons
Pay differen4als are permiRed if
based on seniority, merit, quan4ty/quality of produc4on,
or factor other than sex
It is employer's burden to prove pay differen4al is valid
Pay discrimina@on: Risk to employers
19,724 charges under the Equal Pay Act since
1997
About 1,000 charges per year
Companies face reputa6onal
and financial risk if charged
New in 2017/18: Pay Equity Repor@ng Changes
• Every year, employers with 100 or more employees need to fill in EEO-‐1 form
What EEO-‐1 form asks now:
What the proposed change adds:
• Employee numbers by job category, sex, race, ethnicity
• 12 pay bands that workers fall into
• New pay data would help enforce federal pay discrimina4on laws
POLL: What is your HR leadership’s priori@za@on of Gender Equity? 1. Highest priority 2. High priority 3. Medium priority 4. Low priority 5. Lowest priority 6. Not sure
HR is the key agent of change in helping employers achieve gender equality
“While the underlying issues are daun*ng and complex, human resource professionals are in a unique posi*on to effect
change.
Not only are HR leaders in charge of their organiza*ons’ recrui*ng, diversity and compensa*on efforts, but the
profession itself is dominated by women.”
hRps://www.shrm.org/hr-‐today/news/hr-‐magazine/1116/pages/hr-‐key-‐in-‐helping-‐
organiza4ons-‐achieve-‐gender-‐equality.aspx
HR has a key role to play to reduce risk – How will you:
§ Ensure you aren’t blind-‐sided by the results the first-‐@me you fill in the new report?
§ Con@nuously monitor pay equity to see where the greatest risks are?
§ Discover whether pay dispari@es 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?
Visier Customer
Data
Visier Insights Data
Anonymized, standardized subset of
aggregated Visier customer 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 inflec4on point
Why does this widening of the Gender Wage Gap occur? Is it genera@onal? NO
The wage gape narrows for older
workers – if genera4onal, it should widen
further
If it were genera@onal, we would expect to see bias in promo@ons by age
Visier Insights showed the overall average promo4on 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 promo@on and found: A higher percent of men held manager posi@ons 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 maNer?
With managers* earning on average 2x the
wages of non-‐managers, the Manager Divide—an underrepresenta4on of women in manager posi4ons—directly drives the gender wage gap.
*Manager = Someone responsible for overseeing or direc4ng 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 calcula@on
Why does the Manager Divide occur?
The Manager Divide happens at the same 4me 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%
§ Un@l 1995: § “Daddy leave”: a mone@zed incen@ve for fathers to take parental leave
§ Percent of fathers taking leave soared to 80%
The results
§ Each addi@onal 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 Ins4tute of Labor Market Policy Evalua4on, 2010
How HR Can Accelerate the Path to Gender Equity
HR can most directly impact Gender Equity:
§ Look to increase the female ra@o at every stage in your hiring process – especially for manager / leadership roles
HR can most directly impact Gender Equity:
§ Implement blind screening, removing names (or other gender iden@fiers) from resumes when selec@ng candidates for interviews
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 dispari4es • Confirm valid reasons for pay differen4als—such as longer tenure, more educa4on, or higher performance
Pay Equity is only one layer: Diversity is another
Gallup Report: Women in America: Work and Life Well-‐Lived
“To aFract, retain and engage a modern workforce, business leaders must be courageous and begin to
examine, if not overhaul, their organiza*onal policies, strategies, cultures and values.”
Craq a workplace culture that takes women’s expecta@ons into account
Gallup Report: Women in America: Work and Life Well-Lived
The outside is looking in
Society: Other Considera@ons
§ 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 @me 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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