Hi everyone, this is Stella Terry and welcome to, Ask An HR Expert. Where we answer all your HR questions. Today’s question revolves around the gender wage gap in companies.
Is gender wage gap real and if so, what can your company do to close that gap.
According to PEW Research Center, women currently earn about 82% of what men do for comparable work. To put that into perspective for you, a women stands to lose nearly half a million dollars over the course of their career due to the gender wage gap. So yes, the wage gap is real and it may be very real in your company. So what can you do to address this issue and bring your company into compliance in this area? The first thing that you can consider doing is sitting down with leadership of your company and creating a wage scale. So wage scale is going to be broken out by positions and that is going to be determined by the qualifications and education needed for that position and the job duties for that position as well as any finances and budgeting that the company has to take into consideration.
Once you’ve created that wage scale and you know that it is competitive in your marketed industry that can be implemented with all of your new hires immediately. If you do that, a necessary step that you should take that’s sometimes missed is to stop and look at your current employee’s compensation. Compare their compensation to your newly created wage scale, consider how long they’ve been employed by you and what increase they may have received over time and bring employees up to match that wage scale if you need to. Again, this step can often be missed but is a very important part of creating some internal equity within your company as it relates to compensation.
Another step that you can take as an organization is to consider removing the salary history question off of your employment application. Depending on where you live, you may already be required by law to have removed this from your employment application. But regardless of where you live, this can really be considered best practice if you are looking to address any gender wage gap within your company. So often times what companies would do if they will ask a candidate, what do you currently make, what have you made in the past? And then they decide what they will pay that employee based off of those answers.
Obviously, if there is some inequality in compensation that is going to follow an employee wherever they go if that is the practice of determining their pay. An easy thing to do is to not ask that question in that way, remove it from your written application and change the way you think about that question.
Of course, one of the biggest questions I get is, well I don’t want to put a candidate through the whole process and not ask that question just to have them reject the offer because I was way off base. A different way to get to that issue is to ask the employee where they will like to be as far as compensation goes for the position that they’re interviewing for. This is going to give you an idea of whether or not their desires for compensation will meet your wage scale and it will avoid any issue of wasting time on either side through that interview process. By doing that, you will have the information you need to continue the interview process and understand whether that candidate fits within your scale.
By doing these three things, creating a wage scale, matching that wage scale up to your current employees and making the necessary adjustments, and changing the way that you ask about compensation desires from your candidates will get you well on your way towards compliance in this area and help closing that gender wage gap in your company.
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Thanks so much, have a great day.