“Break the Roles” by Breaking Open Pay Data

by Ania Calderon and Megan O’Donnell

This report is cross-posted from the Open Government Partnership website, see the original post here.

This year’s Global Summit of the Open Government Partnership (OGP) will focus on the linkages between gender equality, inclusion and open government through its Break the Roles campaign, encouraging commitments from government partners to narrow gender gaps.

One way to “break the roles” and minimize the risk of bias and inequity is to increase employers’ transparency. Publishing information about pay and broader compensation opens up for examination any disparities that exist between employees of different genders, races and ages.

Although some companies are opening up payroll data to address evidence that women are on average paid and promoted less than men, in terms of the number of firms worldwide publishing pay data, we’ve barely scratched the surface. Without public access to this data, it’s hard to know where the problems are, and what is needed to close the gap.

Why is opening gender pay data a promising way forward?

Evidence shows that gender pay gaps shrink when companies are required to disclose them; recent research on pay transparency legislation in Denmark found the gender wage gap decline by approximately two percentage points. Closing the gap is beneficial for employers as well as employees, helping improve business performance and employee satisfaction.

The CRM company Salesforce discloses pay differences between gender and race as part of their commitment to achieving pay equality. Since Salesforce began their own pay gap audit in 2016, more women have been hired and been promoted into leadership roles and 92% of employees, up from 80%, state that they are paid fairly. Cindy Robbins, Chief People Officer at Salesforce, states: “The power is in the data. Every company, no matter the size, you have all the data. There’s really no excuse not to look at it.”

To date, at least ten countries have some sort of gender pay transparency regulation in place. The UK government recently mandated all employers with at least 250 staff report the difference between what they pay men versus women. Similar mandates exist elsewhere, including Canada, France and Sweden, but only two OGP commitments currently focus on equal pay. By mainstreaming gender equality into OGP commitments, the OGP community is in a unique position to change this story.

To most effectively move the needle, the way we collect, share and use data on gender pay gaps must be approached carefully and rigorously. Even among firms that have committed to pay transparency, there are still challenges: a recent pay equity review conducted by Google led to raises for thousands of male software engineers, demonstrating how institutional biases in the sources of data and models used to assess compensation can instead exacerbate gaps.

An equally important part of reducing inequalities in the workforce will be how pay data is being collected and analyzed: the methodological approach and specific metrics that are being used, including publishing disaggregate data while safeguarding privacy.

The Google analysis failed to reflect many of the underlying factors that contribute to gender gaps, such as discrepancies in who is being hired and promoted. It revealed that “objective” quantitative data is actually derived from a series of human choices about what to measure and how. Those choices, therefore, risk being embedded in unconscious bias unless they are informed by the dynamics of gender inequities in the workplace.

It is important to remember that globally a significant portion of women are located outside the formal workforce. Those working in the informal sector will already face increased obstacles as a result of their location in the economy, so how do we ensure that conversations around gender pay gaps don’t further exacerbate the problem by rendering them invisible?

In order to be inclusive of all women, especially the most vulnerable, we need to work towards a better understanding of gender income and compensation gaps, broadening our view past pay issues, to workers in every workforce.

Building on lessons from gender pay gap reporting, the Open Data Charter and the Center for Global Development will convene a workshop at the Feminist Open Government Day in Ottawa to explore these challenges. The workshop will work to better understand how publishing and using accessible, comparable and timely data on various dimensions of the gender pay gap could stimulate private and public sector efforts needed to close it.