Dear Corporate Leaders, Stop Turning a Blind Eye to the Gender Pay Gap
I am a mom of two young children.
My dream is that when they enter the workforce one day, we won’t have to acknowledge Equal Pay Day anymore.
Every year Equal Pay Day symbolizes how far into the year the average woman worked in order to have earned what the average man had earned in the previous year. This year, Canadian women, on average, made just $0.89 cents for every $1 CAD made by men. In the United States, the gap is even wider with women earning just 83 cents on the dollar. And pay discrepancy is far worse for women facing multiple forms of discrimination, such as racialized women, trans women, and women from the LGBTQ2+ community.
The pay gap is complex and a result of many factors of inequity
Traditional gender roles tend to place the primary caretaker responsibilities on women, forcing many to step back on leadership opportunities at the office or taking on part-time roles instead to balance family and career.
Even those who claim we should be taking into account factors like education, experience, and titles to do an apples to apples comparison, women still make 2–4% less than their male counterparts with the adjusted wage gap.
While a 2–4% deficit doesn’t seem like much at first glance, it makes a significant impact over a 40-year career.
The National Women’s Law Centre has translated this gap into $10,157 less per year in median earnings, and that’s not including Women of Color or other marginalized groups. This is equivalent to an additional two months’ supply of groceries, three months of rent, or four months of student loan payments and a year of childcare. And over a lifetime, this can add up to almost a million dollars in lost wages.
The consequences of allowing significant pay disparities to continue will affect the economic security of women and their families.
Simply acknowledging this pay gap is not enough.
There needs to be swift action towards achieving pay parity across the board. And the responsibility of taking action lies in the hands of corporate leaders.
Avoiding a slow, flawed approach
Relying solely on the government to enact regulations, or women workers to negotiate for an equitable salary, is a slow, flawed approach.
In August 2021, the Canadian Pay Equity Act came into effect, making it mandatory for government-regulated companies above 10 employees to identify any pay gaps in their workplace and create a proactive pay equity plan that involves active work to shrink them.
Unfortunately, this act still applies only to federally regulated employees — less than 6% of the current workforce. While a number of leaders have started the journey towards additional pay legislation and transparency for all companies, it remains clear to me that the power to create change right now lies in the hands of corporate leaders.
What collective effort looks like…
As the Head of Social Impact of Unbounce, a Canadian software company that has closed its pay gap, I see that the onus is not on one group or one individual. It’s going to take all of us — governments, organizations, leaders, and companies coming together to drive change quickly.
Some larger organizations continue to fall back on the excuse that they don’t have the time or resources to dedicate to a voluntary commitment to equal pay.
While completing a pay analysis is a huge undertaking, we’ve seen the impact it can make from both a business and culture perspective. Since launching Pay Up for Progress in 2020 to encourage organizations to prioritize equal pay by completing a pay analysis, we’ve had three pledgees share with us that having proper compensation and equal pay practices was a benefit during their acquisition discussions.
Equal pay is no longer just something big businesses can and are committing to, there are resources to help organizations of all size get started on this journey.
The benefits of equal pay
As the competition for talent and employee voice continues to grow, companies have an opportunity to take the next step with their social impact initiatives like paid volunteer days for employees or opportunities to get involved with their community. Engaged employees expect their companies to advocate and take action against social issues that are impacting their workplace, society, and the greater community.
Companies who post about the importance of social impact, yet shy away from investing in these issues can be seen as disingenuous and employees may feel frustrated and disengaged. Company culture and social impact is only meaningful if you can show employees and candidates tangible examples of how this impacts their role.
Equal pay is not only the right thing to do and the law, it’s also beneficial for businesses and the economy. When companies make pay parity a priority, they see 13% higher employee engagement, are 19% more likely to exceed industry-average productivity, and 54% more likely to beat industry-average turnover rates.
When all employees are shown that they paid fairly, they can direct their attention towards doing their best work — not negotiating their wage or looking for another job. They feel valued, and can focus on giving back to the company, community, and economy.
What can leaders and companies do? How do we enact deep and meaningful change?
Well, you start by identifying the opportunities in your own organization.
When Unbounce started our equal pay journey in 2017, our People and Culture team analyzed compensation across the company and to our surprise and disappointment, discovered we had a gender wage gap at Unbounce. We took immediate action to close this gap but then spent the next few years developing systems and processes to reduce the changes of this happening again.
Today, we are happy to report that we have reached gender parity across the organization and confirmed that gender and other self-identifying factors such as race, ethnicity, sexual orientation, disability and caregiver status* are not a factor in determining salary at Unbounce and we commit to running yearly fair compensation analysis and sharing those results with our team.
The global workforce has shifted, we now operate in a candidate’s market, where there are more open roles than skilled employees to fill them, yet there is a persistent myth that women the onus is on women to improve their negotiating skills, if they want a higher salary. Relying on women to negotiate assumes that there is a fair, transparent model in place — at the company and societal level.
Right now, that’s not the case.
The moment women finish school and enter the workforce, they graduate into a cycle of being underpaid. This is perpetuated throughout most women’s careers — and many of them won’t even know it. This is a clear opportunity where corporate leaders can take the lead to bring salary transparency to the forefront and make a difference.
A study conducted by the University of Ottawa’s Education Policy Research Initiative and the Labour Market Information Council confirms this point. On average, women earn 12 percent — or $5,700 — less than men one year after graduation. That difference widens to $17,000, or about 25 percent, in the five years following graduation. At a base level, women will earn $406,760 less over a 40-year career compared to men and for Black women, this gap of a lifetime totals over $964,000 based on a new analysis by the National Women’s Law Center.
This is not the “minor” gap many folks believe it is. By putting the responsibility on women to negotiate, it has a huge impact on their lifetime earnings. On top of this, there is a major lack of research-backed salary bands in place so where does one even start?
For these reasons, corporate leaders need to build a business case and take action towards equal pay. There are plenty of resources and data available. Most companies could conduct a gender compensation analysis and have transparent salary bands today if they wanted to.
Lastly, take action.
Get involved with other communities, organizations, and leaders who are doing the work and learn from them. We’ve seen the benefits not only at Unbounce, but in our Pay Up for Progress partners who have taken the pledge to make pay parity a priority.
The future of work is pay parity
In 2020, we rallied our peers to take real action to close the pay gap after going through the process ourselves, offering knowledge, resources, support and a growing community of leaders looking to do the same. Since then, we’ve seen over 70 companies commit to actionable steps to close the pay gap, 8,000+ employees directly impacted by these actions from 6 regions across North America. It’s not only possible, there are groups doing this and seeing results within their organizations.
The workforce is changing and things like diversity, equity and inclusion (DEI) are top of mind for millennial workers. When a company advocates for equal pay and prioritizes DEI, it benefits everyone, not just women. It is essential for corporations to pay attention to what their employees see as important or you will risk increased turnover and slowed growth.
Leaders, do the work.
The onus is no longer on just one individual or one group, it’s everyone taking real action where they can to support the growth of their people, the economy, and our communities. It’s time to stop tossing the responsibility of equal pay over to someone else. Equal pay for all is long overdue and I’m done with the excuses. It’s time to take action for pay parity.
*Results are based on a self-disclosure survey done internally. We see approximately 85% participation from Unbouncers.
