How to manage Gender Pay Gap?
The gender pay gap is the difference between men’s and women’s median annual earnings from full-time, year-round work. It is a measurable indicator of inequality between women and men.
The International Labour Organization (ILO) estimates that women on average continue to be paid about 20 per cent less than men across the world. There are large variations between countries, from a high of over 45 per cent to hardly any difference, please see the figures below for different economies.
Most governments are trying to guarantee equality of treatment between men and women in remuneration. Yet, the gender pay gap persists and the World Economic Forum estimates it will take 202 years to close the global gender pay gap, based on the trend observed over the past 12 years.
What can we do to Close the Gap?
The very first step should be:
- Undertaking a gender pay review to assess whether there is a gender pay gap and to what extent? This review/ assessment should be a continuous effort not something that we do at the beginning of the year while we set some KPIs and at the end of the year while we are reviewing the achievement level on the set measures. Regular pay gap assessment should be followed with the second step which is:
- Creating awareness and flourishing a culture where leaders/ decision-makers in the organization own and put effort to fix it. If the leaders assume the accountability, promoting a gender-inclusive culture while adopting a holistic approach to equal remuneration for women and men for work of equal value; making equitable salary offers to men and women, it would be an easier mission to achieve.
Another essential step for HR & Leaders in the organization should be:
3-Having a strategic plan in place and acknowledging the fact that it requires time/ effort to manage gender pay disparity, there is no magic wand to close the gap in 1 month/ quarter or a year. The amount of time required would depend where the organization stands at the start point. Keeping eye on core metrics/ insights should be an integral part of your strategic plan, below are some of the sample KPIs that may find value in tracking:
- Gender Diversity (Male/ Female Ratio)
- Gender Recruitment (& Candidate) Rate
- Gender Promotion Rate
- Gender Turnover Rate (voluntary & involuntary)
- Salary Growth/ Genders (across various levels)
- Salary Competitiveness/ Genders (across various levels)
- Gender Successor Rate
- Managerial Role Distribution Across Genders
- Leadership Role Distribution Across Genders
- Engagement Level/ Gender
Setting KPIs, tracking them with real/ live data can be only effective when it is digitized, especially for Mid & Large Enterprises, you can find some more ideas in Compport Analytics section.
Once pay gaps are seen and understood, then begins the work of deciding how best to address them. But that work will pay off. By investing in pay equity analysis and relevant analytics/ KPIs, companies can begin to close their gender pay gaps, and realize the benefits.
The ILO estimates that reducing the gap in participation rates between men and women by 25 per cent by the year 2025, could raise global GDP by 3.9 per cent, or US$5.8 trillion.
To make that happen, we are responsible, we are all accountable. Pay Equity is the topic which was supposed to be handled as on yesterday so better handle it today.
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