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News & Blogs: Memo from the CEO

Achieve gender pay parity in 2 bold moves

Thursday, March 31, 2016  
Posted by: Barbara Francella
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By Joan Toth

It’s been more than half a century since President Kennedy signed the Equal Pay Act and seven years since President Obama signed the Lilly Ledbetter Fair Pay Restoration Act. But the gender pay gap stubbornly persists.

Full-time women workers earn about 78 percent of their male counterparts’ earnings. The pay gap is even greater for African-American women and Latina women, who earn just 64 cents and 56 cents on the dollar compared to white non-Hispanic men, according to White House figures.

Related: It’s time to eliminate the ‘B’ word at work

Critics have tried to explain away the pay gap by pointing to differences in occupations and career/life choices. Not so fast.

According to a study by the American Association of University Women, women one year out of college still make 7 percent less than men, even when you factor in variables like college major, occupation, industry, hours worked, GPA, type of college,  age, geography and marital status. The pay gap is persistent — and all signs point to discrimination as the cause.

The wage gap is not just bad for women — it’s bad for your bottom line. It hurts your female employees and pinches the pocketbooks of women who shop your stores and buy most of your products.

The pay gap is hurting our industry’s ability to recruit and retain, too. Pay and benefits are the top reasons Millennials choose an employer — organizations that close the gender pay gap will attract the best talent and have a stronger, better motivated workforce.

The Network of Executive Women believes that the retail industry and consumer goods industry  — with its large female workforce — is especially well positioned to close the gender pay gap and become a leading talent destination.
Closing the pay gap may not be as difficult as you think. A recent article in The New York Times by Claire Cain Miller suggested two strategies worth considering.

1. Publish everyone’s salaries.

This bold move would shine a light on pay discrepancies and, according to research at Washington University, result in higher pay levels by giving employees a stronger hand in negotiating. In the study, workers who reported their managers were “very good” at sharing organizational financial information out-earned those who reported their managers were “very poor” at financial disclosure by 8 to 12 percent.  

2. Treat women the same as men during salary negotiations.

Research by Carnegie Mellon’s Linda Babcock shows men are four times as likely as similarly qualified women to ask for higher pay. When women did ask for more, they asked for 30 percent less than their male peers. One underlying factor: women who negotiate for higher salaries are perceived — by both male and female managers — as “less nice.”

In April 2015, Reddit interim CEO Ellen Pao addressed this by banning salary negotiations as a part of recruiting efforts. At the time, she told The Wall Street Journal that “men negotiate harder than women do and sometimes women get penalized when they do negotiate. We come up with an offer that we think is fair…we aren’t going to reward people who are better negotiators with more compensation.”

Don’t be afraid to negotiate

Catherine Tinsley, a management professor at Georgetown University who has studied the gender pay gap, says “being authentic” is the key to getting the best deal in negotiations. “If you're not, it comes off as being disingenuous — and people get skeptical about it,” she told Bloomberg Business.

The greatest gender disparities in negotiations, Tinsley says, are in areas where there’s ambiguity around what is negotiable, such as bonuses and the dates of performance appraisals. “You have to brainstorm all the possible things you can get from the company. It's much more than just salary negotiations.”

You also “have to practice,” she advised. “As goofy as it sounds, you have to get up and practice with someone because negotiation is a behavior — and in order to get better at a behavior, you have to engage in it.”
A study by PayScale found that significantly more women than men (31 percent vs. 23 percent) are “uncomfortable negotiating salary."

My advice to women? Grab a friend and practice “the ask.” If you’re told a position’s salary is nonnegotiable, ask if there is wiggle room on vacation time or bonuses. If your manager says your requested salary requires “more experience,” know your true market value and be prepared to summarize all your experience and accomplishments.

And my advice to managers — male and female — sitting on the other side of the table? Ask yourself what you would offer a similarly qualified man. Then ask how much it will cost you to replace a highly trained and motivated female employee. The pay gap doesn’t just hurt her, it hurts your organization’s future, too.  

Joan Toth is president and CEO of the Network of Executive Women Retail and Consumer Goods, a learning and leadership community representing nearly 10,000 members, 750 companies, 100 corporate partners and 20 regional groups in the United States and Canada. 

Views expressed in blogs, posts and user comments are those of the authors and do not necessarily reflect the opinions of the Network of Executive Women or its Officers, Board members and corporate partners.

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