4 Things Companies Can Do to Help Close the Gender Pay Gap

The Pew Research Center reports that the total yearly earnings gap between genders is still virtually unchanged over the past two decades. According to their most recent analysis, women earned an average of 82% of what men earned in 2022. These results are similar to the 2002 gender pay gap, when women earned 80% as much as men.

While everyone has a role to play in helping to close this enduring gender pay gap for workers in the US, perhaps the most directly impactful role is that of the employer. That’s because companies are in a unique position to use and improve equitable hiring practices—which have been proven to boost representation, diversify teams, and foster belonging for women and nonbinary professionals in the workplace.

Read on to learn what an organization can do to hire and retain more women and other underrepresented populations.

1. Acknowledge and Understand the Gender Pay Gap

March 14th is Equal Pay Day: a national day of recognition symbolizing how far into a second calendar year women would have to work to be paid the same amount men earn in just one year. While an approximation, that statistic is built around the facts:

• • Women make up 57.4% of the workforce but earn just 82 cents on the dollar compared to men, or 82% of what men earned in the same year.
    • The gender wage gap increases even further among Hispanic and Black women, who earn 65% and 70% of those earnings, respectively.
  • Women and nonbinary professionals earn about 92% of what men earn in entry-level and mid-career roles, but the gap widens among managerial and leadership positions to about 83% (Pew Research Center, 2023).

Beyond acknowledgment, it’s important to understand these numbers and their nuances to inform an organizational course of action to address them. Equitable pay practices across the board may seem an easy fix for employers (and certainly have a big impact!), but other factors that disproportionately affect women, like caretaking responsibilities and opportunity gaps, should be considered as well.

2. Invest in the Work Environment

Another nuance to consider is the way women are treated and regarded in your workplace. In the same study above, half of US adults surveyed said that a major reason for the wage gap is employer treatment of women and nonbinary workers. In many ways, modern workplaces are still built around the basic work needs of men.

Implementing practices like caregiver leave, designated non-work appointment time, and flexible or reduced on-site hours, for example, may allow all employees more flexibility to tend to their personal life needs without having to broadcast them.

Increased opportunities for professional development may also help to retain women workers. Internal ERGs, mentorship and training opportunities, educational resources, and other proven avenues to support upward mobility should be made available where possible throughout the company.

3. Consistently Update the Compensation Strategy

Of course, combatting the wage gap starts with actual wages! Throughout the hiring process, all candidates are able to glean a better understanding of job compatibility if as many details as possible are included up-front—including pay.

• Ensure your compensation strategy is updated regularly. Pay ranges should not span more than $10,000-$20,000 (where possible), and reflect not only cost-of-living considerations, but the compensation of similar roles regardless of gender.

• Don’t ask for salary history or expectations. Instead, professionals should be compensated within the company-provided range alone, varying based on education, experience, and other individual factors.

• Integrate pay transparency. Pay transparency simply means that everyone in an organization has an idea of how employees are compensated. This is not to say that personal, individual salary information should be disclosed, but all workers should know the basics: what their salary potential is, when and why bonuses and raises are granted, etc.

4. Expand Job Flexibility Where Possible

Job flexibility is a huge factor in employment overall, and has become particularly prescient since many companies moved to instate teleworking strategies out of necessity during the pandemic. For women, the benefits of job flexibility largely mirror those of men: more autonomy, communication, time, and resources to do their job efficiently. However, those same features may do more for women and nonbinary workers by simply helping to balance domestic workloads—which are traditionally greater for women than men regardless of familial status (Pew Research Center).

Of course, not all roles are built for flexibility, regardless of who fills them. But even seemingly small changes, like the dissolution of micro-managing policies or practices, or increased trust and transparency in the workplace, may also have a significant effect on a worker’s day-to-day flexibility and encourage long-term retainment.

Remember, companies can’t close the gender wage gap on their own. It takes the combined effort of government initiatives, societal changes, and educational opportunities in addition to the effort of the individual or organization. However, instating these 4 measures can help to foster belonging, allow room for growth, and support a healthy work-life balance for women in your workplace.

Here’s to a more equitable future over the next 20 years and beyond!