It’s 2016, but the glass ceiling is still very well intact. We talk with an expert about why one of the last barriers in employment hasn’t been broken yet.
What if there was a report that stated people who were a certain height didn’t make as much money as people of another height? What about a certain weight? Just because you are 5’9” tall, why should somebody with the same job and same responsibilities be paid more money just because he or she is 6’2”? But this is exactly where we stand today with the pay differential between men and women.
While the pay gap between men and women has decreased over the years, there is still much work to be done to close it for good. According to a recent brief from the White House Council of Economic Advisors, “women account for 47 percent of the labor force and they hold 49.3 percent of jobs. Women’s share of the labor force has been rising for more than 50 years and is continuing to increase. Despite women’s gains, a large gender pay gap still exists. The median woman working fulltime all year earns 78 percent of what the median man working full-time all year earns. Phrased differently, she earned 78 cents for every dollar he did. Although this gap generally narrowed between the 1970s and 1990s, it has largely stopped narrowing and has remained between 76 and 78 cents since 2001.”
Numerous organizations and individuals have been working hard to inform companies and governments about the gender pay gap and provide solutions to close it once and for all. Mercer, a global consulting leader in talent, health, retirement and investments, began their When Women Thrive global research and solution platform in 2014 designed to help organizations drive growth through the active and productive participation of their female workforce. Jennifer Openshaw, author and nationally known commentator, is a partner with Mercer on the project. When I asked Openshaw about what is contributing to the continuation of the gender pay gap, she noted three key factors. “The number one reason was cultural and societal norms. There is a tremendous amount of pure inertia – leaders or organizations that either don’t truly want to move forward or can’t find the path. An HR or business leader might want to implement new programs, but if there isn’t support from the top – at the CEO level – he/she might have a tough time getting traction.
“Two, if leaders could tie diversity and women directly to the bottom line, they would see more traction. That’s why Mercer’s work focuses on exactly that. There has been decades of talk about why women matter, but the real question today is: HOW do we leverage their unique skills to drive growth? And not just at the company level, but within the community and economy, as well.
“Three, new research at Cornell finds that women are paid lower in roles and industries where men dominate. Even when women were more dominant in tech, the pay in tech rose when men were dominant. A great example is IT vs. HR: The median earnings for information technology managers (dominated by men) are 27 percent higher than human resources managers (mostly women), according to BLS data reported in the The New York Times. This ties back to norms and stereotypes: if we perceive women as not holding key positions or positions that are directly valuable to an organization’s success, then women will continue to be underpaid. The job of leaders is to set the record straight and demonstrate the impact women make directly to the bottom line of the company, raising the tides for all,” said Openshaw.
Lessons from a shark
Kevin O’Leary, one of ABC’s Shark Tank investors, recently stated this about the success he’s found with women-run businesses: “One hundred percent of my returns the last six years have come from companies run by women.” While O’Leary speculates that women are more mindful of risk and better at time management, both crucial for the small companies in the Shark Tank pool, Openshaw has research about why organizations with a good representation of women at the top are successful. “Mercer’s When Women Thrive report shows that women are especially adaptable, flexible, as well as inclusive team managers,” Openshaw said. “Companies that leverage these strengths can be more diverse and well-rounded. Companies that get it are placing women into critical jobs that will drive growth – like R&D and innovation. They recognize they can’t develop products or services for a female customer base without having women to help drive the experience.”
Shattering the glass ceiling for good
While companies like Cisco and eBay are making pay equity a priority with company-wide policies of being fully transparent with data and by holding leaders directly accountable for having solid representation of women in their divisions or units, there’s still a long way to go. “Only 41 percent of organizations make pay equity adjustments as part of the annual compensation review process,” said Openshaw. “It’s one thing to look at the data, it’s another to act.”
So how can companies, and most importantly company leaders, take action to erase the gender pay gap? “Conduct an annual data driven pay equity analysis to look for these imbalances. Create transparency so all employees understand the pay process and how they can thrive not just functionally but financially, and focus managers on equity, leading with a rigorous pay evaluation,” Openshaw said.
Another hurdle women face when it comes to not just their paychecks, but with their financial planning is what Openshaw calls a “triple storm” - lower earnings, longer life spans, and additional financial needs from children and aging parents. “Their needs are different and the way they approach these issues are different,” said Openshaw. To help shelter women from this storm, she suggests that organizations offer financial education tailored to women’s specific needs. This includes helping female employees monitor investments and ask questions about their investments such as: How have they allocated their investments? Do they have more savings in cash or bonds? Do they shy away from stocks and other high yield/risk investments? “Teaching women to successfully diversify their investments should go a long way to improving their finances today, and over their longer life spans,” said Openshaw.
For more information on Mercer’s When Women Thrive report, please visit http://www.mercer.com/our-thinking/when-women-thrive-2016-report.html.