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Equal Pay Counts:
What Companies Can Do

Gender equality is critical for organizations that want to perform at the highest levels, and it requires ensuring that women and men have the same opportunities and are paid fairly for their work.

The gender pay gap affects women throughout their careers.

On average, women in the United States are paid 20% less than men. And if you break it down by race and ethnicity, the pay gap is even worse—Black women are paid 38% less and Latinas are paid 47% less.1 As a result, the average woman misses out on more than $400,000 during the course of her career.2 This pay gap is wider in higher-paying industries and roles.3

Equal Pay 2018 Survey Findings

16% Only 16% of Americans think companies are doing enough to close the gender pay gap. And 60% attribute the gap to sexism or unconscious bias, while just 5% think women don’t work as hard or are less educated than men.4

Closing the pay gap isn’t just the right thing for companies to do. It’s the smart thing to do.

Employees who are paid fairly are more committed.

When employees believe they are rewarded fairly for their work, they are more likely to put in extra effort and pitch in to help their coworkers. This higher level of commitment can lead to better job performance.5 In contrast, when employees think they’re underpaid, they are more likely to look for a new job, and attrition costs companies money and valuable institutional knowledge.6

Equal pay matters to employees.

Almost 75% of Americans think the gender pay gap is unfair when they know it exists—and only 16% think companies are doing enough to close it.7 Moreover, almost a third of workers will not apply to a company with a gender pay discrepancy.8 And equal pay matters to customers, too: 66% of Americans are less likely to buy a product from a company that does not pay women fairly.9

Four steps companies can take to close the gender pay gap

1. Conduct a pay audit

Awareness is the first step to solving a problem. Analyze compensation by gender and race so you can see and address pay gaps. In addition, be explicit about how your organization determines compensation so employees don’t have to guess what factors are driving their pay.

Did you know?

Only 26% of U.S. companies track differences in salary between women of color and other groups in comparable roles.10

2. Ensure that hiring and promotions are fair

Audit reviews and promotions regularly to ensure your company is not systematically rating men more highly and promoting them more quickly. Train managers so they understand the impact of gender bias on their decision-making, and put clear and consistent criteria in place to reduce bias in staffing decisions and performance reviews.

Did you know?

Only 21% of U.S. companies set gender targets for promotions, and only 4% require unconscious bias training for employees involved in reviews.11 Moreover, only 29% of companies set gender targets for external hiring, and only 9% set these targets for women of color.12

3. Make sure women have equal opportunities for advancement

Women typically receive less feedback on their performance, get fewer high-profile assignments, and have less access to mentorship and sponsorship. Make sure the women in your organization have equal access to the people and opportunities that accelerate careers and are not saddled with a disproportionate amount of “office housework,” such as organizing events.

Did you know?

Women ask for promotions and raises just as often as men.13 However, women are still promoted more slowly and paid less than men — and these problems are worse for women of color.14

4. Make it a norm for women to negotiate

We expect women to be giving and collaborative, so when they advocate for themselves, we often see them unfavorably. This social pushback can negatively affect the results of women’s negotiations—and their careers. Make sure the women in your organization are encouraged to negotiate and are applauded, not penalized, when they do.

Did you know?

Women who negotiate are more likely than men who do to receive feedback that they are “intimidating,” “too aggressive,” or “bossy.”15

Other Resources

Research

How the system is failing Latinas and Black women

This Equal Pay Day, we’re sounding the alarm for the Latinas and Black women who have been pushed to the edge of poverty by Covid-19 and a system that’s stacked against them.
Program

Fight bias against women of color at your company

50 Ways to Fight Bias is a digital program that highlights specific examples of bias in the workplace and offers research-backed recommendations for what to do.
Report

The State of Black Women in Corporate America

Learn about the barriers holding Black women back at work—and the specific steps companies should take to make sure they’re treated fairly and given equal opportunities to learn, grow, and lead.

Footnotes

  1. Ariane Hegewisch and Emma Williams-Baron, “The Gender Wage Gap: 2016; Earnings Differences by Gender, Race, and Ethnicity,” IWPR #C459 (September 2017), https://iwpr.org/publications/gender-wage-gap-2016-earnings-differences-gender-race-ethnicity/. Black women are paid $0.625 for every $1 that white men earn, leading to a pay gap for Black women of 37.5%.
  2. National Partnership for Women and Families, The Lifetime Wage Gap, State by State (April 2018), https://nwlc.org/resources/the-lifetime-wage-gap-state-by-state/.
  3. Ariane Hegewisch and Emma Williams-Baron, “The Gender Wage Gap by Occupation 2016,” IWPR #C456 (April 2017), https://iwpr.org/wp-content/uploads/2017/04/C456.pdf.
  4. Methodology: This SurveyMonkey online poll was conducted March 22–27, 2018, among a national sample of 7,461 adults, including 4,928 who are employed. The modeled error estimate is +/-1.5% among the full sample. Data have been weighted to reflect the demographic composition of the United States age 18 and over. Learn more.
  5. Peggy Cloninger, Nagarajan Ramamoorthy, and Patrick C. Flood, “The Influence of Equity, Equality and Gender on Organizational Citizenship Behaviors,” SAM Advanced Management Journal 76, no. 4 (2011): 37–47.
  6. David Card, Alexandre Mas, Enrico Moretti, and Emmanuel Saez, “Inequality at Work: The Effect of Peer Salaries on Job Satisfaction,” The American Economic Review 102, no. 6 (2012): 2981–3003.
  7. SurveyMonkey poll, March 22-27, 2018.
  8. Ibid.
  9. Ibid.
  10. LeanIn.Org and McKinsey & Company, Women in the Workplace 2018, https://womenintheworkplace.com/.
  11. Ibid.
  12. Ibid.
  13. Ibid.
  14. Ibid.
  15. LeanIn.Org and McKinsey & Company, Women in the Workplace 2017, https://womenintheworkplace.com/.