Iceland just announced that pay parity between the sexes is the law for public and private companies. The country is the first in the world to impose fines on businesses that don't ensure that men and women in the same positions are paid equally.
Though no laws are in place to guarantee pay parity between the sexes, American women are monitoring the topic closely, according to Georgene Huang. She's the CEO and co-founder of Fairygodboss, an online community for women who wish to share workplace experiences and opportunities.
"On Fairygodboss, we hear from hundreds of thousands of women a month," says Huang. "The income gap between men and women is a major concern among our community members and something that women are acutely aware of in today's work environments."
"Gender inequalities were a hot topic in 2017 more than ever before," he says. "I think the same can be expected in 2018."
Benefits of Pay Parity for Your Business
Equal pay is a positive for everyone, believes Nowlin.
"Pay parity implies equal opportunities between men and women in your company," he explains. "Knowing there isn't any gender bias causes female employees to excel while male employees know not to be complacent. Overall, pay parity results in increased motivation and performance."
Equal pay can be important to the health of a business, notes Joel Klein, founder of IMBC, a marketing company.
"Implementing pay parity creates a positive work environment that improves the confidence of employees and in turn their productivity," he says.
—Christine Barney, CEO, rbb Communications
Paying women equally can also help you attract and retain top talent, adds Huang.
"Many women concerned about pay parity note that improvements in compensation would make them more likely to stay at their current employers," she explains. "To attract and retain top female talent, it's a good idea to examine your pay practices and pay women fairly and equitably."
Fail to make pay parity a reality and you may find yourself recruiting and training new employees more than you'd like, believes Christine Barney, CEO of rbb Communications.
"Satisfied employees are the most important driver of the overall health of any business entity," she says. "Lack of pay parity negatively impacts satisfaction and causes employees to search for employers who will recognize their skills with their wallets."
Is Pay Parity the Wave of the Future?
Given the changes in the workplace in recent years, including the focus on improved wages, some business owners feel that we're moving toward a time when widespread pay parity will become a reality.
"I think the transformation coming in the workplace will have a profound impact on labor, wages, benefits and engagement," says Andrea Simon, CEO of Simon Associates Management Consultants. Her company applies anthropology theories and methods to help businesses grow.
"The trend of companies using freelancers is a good example of pay parity change. Women and men contract workers are competing on a balanced, if not level, playing field," says Simon. "In the near future, women may find they have the power to command pay parity or even premium pay."
Huang also feels that pay parity is just a matter of time.
"As the issue of equal pay continues to be discussed and more studies come out showing that equal pay is good for business, I believe we'll reach parity in the future," she says. "Women are outpacing men when it comes to higher education. They're also becoming bolder in their negotiations. As a result, I think it will get more difficult for employers to have pay gaps between men and women."
Tips for Bringing Pay Parity to Your Company
In order to move your company toward pay parity or to ensure that payment remains on equal footing, keep the following dos and don'ts in mind.
- Be transparent with pay brackets and salary ranges. "At rbb, every employee clearly sees the salary track available to him or her, regardless of gender," says Barney, who notes that they've operated this way since the company started in 2001.
- Create career tracks that indicate what is required for every level and the corresponding range of salaries expected with each level.
- Implement hiring policies designed to prevent gender bias, such as blind screening, (removing the applicant's name from the initial screening process), advises Nowlin.
- Nurture an inclusive culture. "Encourage executive level buy-in from male and female leaders," says Oliver Cooke, executive director of Selby Jennings, which provides global recruitment for the financial services industry.
- Provide equal on- and off-the-job training opportunities to both genders.
- Allow compensation to be bottlenecked by a manager, advises Barney. "Compensation should be reviewed by a larger committee to ensure fair principles are being applied and individual biases or timing issues are reduced," she says.
- Focus on overnight changes. "Think about changes for the long term that look at the total compensation package, not just salary," advises Barney.
- Ask job applicants what they were paid at their last jobs. "In some states and localities this question is against the law. Asking this could cause perpetuation of pay inequality," says Jay Starkman, CEO of HR service provider Engage PEO. "Even where it's not prohibited by law, it's still best to avoid this question."
- Think this is a simple matter of a salary increase for women. "Understand the significance," suggests Simon. "There is so much meaning in the concept of pay parity. It's almost as if core values of our society will be challenged. But the benefits for you and your workforce are exponential."
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