Credit: WOC in Tech
As countries across the globe continue efforts towards legislating for pay equity, and we look forward to the United Nations International Equal Pay Day 18th September, it’s worth asking: why wait? In a time when globally we’ve witnessed an international pandemic, associated lockdowns, and economic crisis, consumers have begun to demand that businesses be better. Why is equal pay any different?
Efforts towards equal pay for equal work are longstanding, but in the wake of an ongoing global pandemic, the importance has escalated. Globally, women earn 77 cents for every dollar men earn for work of equal value – with an even wider wage gap for women with children. In the U.S., while the gap is slightly less, with women earning 80 cents for every dollar their male counterparts earn, the figures are significantly worse for women of colour, with Black women earning on average 63 cents on the (male) dollar, and Hispanic or Latinx women earning 54 cents.
And while progress towards equity had been strong, job losses caused by the pandemic impacted more than one million additional women than men in the U.S., leading to fears that far more than temporary economic crisis, the pandemic will roll back the progress made on pay equity as well. And that’s nothing to say on the fact that employment statistics for women of colour have been sluggish in improving in comparison to their white counterparts.
Pay equity legislation continues to be a hot topic globally, and while in many places there is legislation in place, the time has come for both more widespread and improved legislation.
Consumers are Demanding Better
Globally, we’ve witnessed big business respond to consumer demands on social issues such as anti-racism and environmental action, and the same must be demanded for pay equity. Beyond hashtags and bold statements, measurable action is required.
Aside from believing that pay equity is simply the right thing to do, the fact that gender equity for paid and unpaid work will reduce poverty, improve economic growth and prosperity, and broadly create more equitable, and therefore more sustainable, communities, should lead organizations to consider proactive work in the space. Why? Corporate social responsibility (CSR) makes business sense. And pay equity is in fact just one of a number of material issues in the corporate social responsibility matrix.
Where to Start
Companies who are newer to CSR efforts must start by gaining an understanding of the ecosystem in which they operate to spark strategic discussions about material issues that consider all relevant stakeholders. By engaging in communities and industry groups where they can exchange ideas and case studies for how to think boldly and creatively, such as for example the UN Global Compact or one of the plethora of sustainability-focused conferences, companies can gain a wealth of information on options and best practice approaches.
In the U.S. and around the globe, we've witnessed progress on anti-racism initiatives, getting beyond hashtags and making real change. So, where to start for pay equity? Palladium Chief Diversity Officer Dr. Rosanna Duncan has one core recommendation: make leaders accountable.
Speaking to progress made across Palladium’s global workforce in closing the equity gap, Duncan stresses the importance of using a meaningful calculation to determine equity gaps, and then ensuring leaders are invested in closing those gaps.
“At Palladium, like many global organisations, we were challenged by agreeing an approach that supported equity calculations across different geographies, with different currencies, different market values, and indeed different jobs,” she shared at the WILD Network 2021 Women in Global Development Leadership Forum.
“We wanted meaningful global comparisons, and so rather than simply taking an average, we looked at roles in terms of salary bands, taking a mid point approach.”
Using a simple example to explain, if a pay band for a particular role stretches from 80,000 to 120,000, the midpoint is 100,000. If on average a male in the role earns 93,000 and the average woman in the role earns 87,000, then the equal pay gap is 6 percent. This methodology can be used to consider ethnic pay gaps as well, another key reporting metric for Duncan.
Supported by the numbers, Duncan and the Palladium team then set about holding leaders responsible for progress on closing gaps globally.
“It was really important for us to make leaders accountable. Once we had the data, we tasked global leaders with connecting with their HR teams to figure out why gaps existed within their regions. And, critically, we set goals for leaders to close those gaps, linking key performance indicators to senior leader pay.” said Duncan.
The approach has paid off, with Palladium closing the gap globally to 2 percent. When they first undertook the work, Duncan shared that the largest gap witnessed in some parts of the business was as much as 20 percent.
Communication is Key
In addition to making leaders responsible for change, Duncan was keen to point out that leaders were also tasked with communicating progress on key metrics to keep the conversation going. Whether leaders, employees or allies, communication is a critical component in change, and it’s one thing in which we can all play a role.
To learn more about Palladium’s commitment to diversity and inclusion, contact email@example.com.