8 Ways to Decrease the Gender Pay Gap

Media coverage of Labor Day and the 2016 elections has revived the discussion about workplace equality and the Gender Pay Gap — the fact that women earn 78 cents for every dollar earned by men.

A lot has been written about the reasons for this gap. Is it due to the gap in confidence, known as the Ask Gap? Is it the fact that more women work part-time and care for their children, investing less in their career? Is it that women are under-represented in tech sectors, in top management roles and other high paying jobs? Or is it plain discrimination?

My experience in recruiting and negotiating salaries with employees and executives, and in determining compensation policies, has been enlightening. From that experience, I’ve learned some practical ways in which female employees, as well as employers, may effectively decrease the Gender Pay Gap.

For employees: 4 ways to avoid Gender Pay Gap pitfalls

1. Don’t rely on your past salary

I found that, when asking candidates about their salary expectations, many of the female candidates tend to share information about their last salary and say they would like to do similar or better. Most male candidates tend to say, “I expect to be paid between $X and $Y,” or “my absolute minimum is $X.”

Due to the existing Gender Pay Gap, relying on salary history tends to broaden the gap even further.

My recommendation to women — don’t rely on your salary history. Ask for what you think you are worth today, even if it’s a 50% increase above your previous salary.

2. Do your homework

Although most salary information is kept confidential, there is a lot of public data out there about salary benchmarks for different industries and for different positions. Come prepared for your interview or salary discussion. Know what the benchmark is for the type of position you are applying and for your level of experience.

In addition, think of how to highlight your unique value. Do you have experience in a unique field or environment? Maybe you have knowledge on how to operate specific systems? Did your previous company go public? What makes you worth more than other candidates? Use this information to build the case for the compensation you’re aiming for.

3. Don’t compare yourself to others

One thing employers don’t like to hear is comparisons, especially when you’re using confidential information or rumors, such as, “I heard John is making 20% more,” or “I heard Jane was granted more stock options.”

In your annual salary review, or when coming to discuss compensation, say what you think you deserve and why you deserve it, not what others are making. Good examples can be “I think I scaled up significantly this year. My team grew from 2 to 5 employees,” or “the revenue from the business unit I manage grew by 30%.” You can even say, “I’ve proven I’m a hard worker and I get results,” or “I’ve accomplished all goals outlined in my annual plan,” and so forth. After listing your accomplishments, you can attach a value to those accomplishments.

4. Now is not the time to be humble

Women have a tendency to ask for less in salary because they don’t want to appear too aggressive or don’t want to risk losing the job. When communicating salary expectations, don’t be humble. You can be humble in your interactions with employees, colleagues, clients and vendors. But, when it comes to naming your price, you only get one chance. If it’s too high, believe me, you’ll know soon enough — the HR department will come back to you with a lower offer. But, if you aimed too low, nobody will tell you.

One more thing to remember… negotiating your compensation is just like any type of negotiation. Don’t treat it differently. Negotiate just like you would discuss pricing with a vendor, or with a client. The fact that it’s your paycheck shouldn’t make a difference.

For Employers: 4 ways to minimize the Gender Pay Gap

Despite clear data to the contrary, companies tend to blame women for the Gender Pay Gap or claim it’s a myth. However, a growing number of companies are trying to adopt equal pay policies, create more transparency around compensation policies, and actively invest in diversity and equal pay practices. Pinterest, for example, recently announced that a third-party firm has analyzed its payroll for the past 18 months to ensure men and women are paid fairly.

There are some simple steps we can take, as employers, to minimize the Gender Pay Gap and strive for gender equity:

1. Use Benchmarks

Some candidates are insecure, unprepared, or clueless about proper compensation. If a candidate is asking for compensation that is way below benchmark, don’t take advantage of the situation. It won’t serve you well when that employee later learns that his/her salary is lower than that offered by other companies.

Offering fair compensation increases retention and reflects positively on the company’s reputation. Review your payroll on a regular basis to ensure you’re not discriminating against any sector.

2. Evaluate based on objective standards

When you determine compensation, consider industry and internal benchmarks, as well as the employee’s value to the organization. The employee’s gender, race, family status, financial situation, or other similar personal characteristics are irrelevant. Apply equal standards to all employees.

3. Promote employees without bias

The same standards should apply to promotions and hiring of your management team. If you judge candidates for hiring and promotion solely based on their skills, experience and passion, women can get their fair share of senior roles. I’ve elaborated on our hiring and promotion practices earlier this year. Naturally, having more women in senior roles narrows the Gender Pay Gap.

4. Give both men and women the freedom to care for their children

One of the reasons given for the Gender Pay Gap is the fact that women tend to be the main caregivers and work less hours than their male counterparts, preferring to focus less on career advancement. By adopting inclusive policies for parental leave, time off and child sickness that are gender-neutral, companies can help reduce the gap.

One policy we adopted at Fiverr is “the short day”. Every employee can choose one short day a week where he or she can leave at 3pm. Through this policy, we encourage employees to spend more time with family and to take part in housework.

Research shows that equal contribution to housework has a positive impact on the next generation, as well, by providing role models for equality.

Minimizing the Gender Pay Gap is not only good for women; it promotes equality and diversity in the workplace, which was proven to be good for business. We shouldn’t wait for governing bodies and legislation to change old habits and misconceptions. There is plenty we can do as employees and employers to narrow the gap today.

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