Equal pay for women helps promote feelings of inclusiveness, boosting productivity and morale. Learn how you can create a more equitable environment at your organization by taking a queue from some of CFOs who've succeeded in this task.
The demand for equal pay for women was loud and persistent in the late 1960s through late 1980s. Although the topic would occasionally arise, its furor has abated in the ensuing years. In the midst of the recent revelations regarding systemic sexual harassment in industries ranging from movies and television (Hollywood) to high tech (Silicon Valley), the issue of equitable treatment in other areas, including pay, has gained attention once again.
What can financial leaders do to ensure they're being equitable in their pay for women?
Today, women in the U.S. make an average of $0.82 for every dollar made by men, according to the Center for American Progress, and there are several factors contributing to this wage gap.
One of these is the fact that many women take time off from professional life or reduce their roles at work in order to care for their children or families, as the Washington Center for Equitable Growth points out. This is often driven by the lack of affordable child care or paid family leave. These demands often make it more difficult for women to contend for higher-paying operational leadership positions. A rigid adherence to a traditional workday can also cause issues, as this leads women to take part-time roles to have more flexibility.
There are also what the Washington Center for Equitable Growth refers to as "demand-side causes" of pay inequity—namely, those that have to do with discrimination and the pressures of socially constructed gender norms. These kinds of expectations often lead women to choose more socially acceptable majors in higher education—for example, opting for nursing or education over chemistry or engineering. They may also make organizations less likely to select women candidates when hiring for leadership positions.
Supporting Equal Pay
Companies are beginning to understand the importance of actively working to reduce the wage gap. As Lean In points out, employees who are paid fairly are more committed to the organizations they work for. This can lead to better job performance and improve employee retention, saving companies money on sourcing and hiring new talent.
Still, only 16 percent of businesses are taking sufficient action to offset the gender pay gap, Lean In reports. What can companies do to be more proactive? One way to start is by fostering an open conversation about the topic within your organization.
We need to make sure employees can discuss wages without fear of retaliation," Andrea Johnson, senior counsel for state policy at the National Women's Law Center, tells Forbes. "An ability to discuss wages lets employees find out if they are discriminated against to begin with."
From there, conduct a pay equity audit to ensure all job levels and positions are compensated appropriately, as SHRM recommends. This will help you identify pay inequities as well as opportunities to promote women at your company into leadership roles.
The Role of Benefits and Leave
According to the JEC, the U.S. is the only advanced economy that does not guarantee paid maternity leave. However, not offering paternity leave reinforces stereotypes of women as caregivers. The U.S. is also one of few countries that doesn't guarantee sick leave, notes the JEC. Thus, American CFOs who support women can't wait on the government to create mandates. Instead, they must act within their own organizations to narrow these differences.
They can identify and minimize occupational segregation, wherein women are automatically slotted into administrative support positions that have no potential for profit and loss contribution and offer on-site child care or benefits to offset child care costs. Furthermore, financial leaders can offer and support paid family leave, instead of only paid maternal leave, to allow and encourage fathers to contribute to family care. Finally, many organizations strongly discourage pay discussions. However, pay transparency shines the light upon significant gender disparities and can thus lead to additional solutions.
How to Follow the Lead of the Top Women-Supporting CFOs
According to Forbes, CFOs and other C-level leaders can follow the lead of the top CFOs who support women and equal pay by first recognizing their unconscious biases. Having a tendency to turn to people who look like them and have a similar background can lead to decisions made at the subconscious level regarding who would be best in a particular leadership role. When all the leaders are males, this tendency or bias leads to the elevation of other males into leadership positions, often to the detriment of women.
These top CFOs also focus on recruiting and retention, by not just saying they want diversity but by deliberately hiring a diverse workforce and then cultivating a culture of inclusion. This includes expanding the scope to include reaching out to women's businesses and similar professional associations and providing or strongly encouraging mentoring opportunities. Finally, these leaders identify and invest in underrepresented employees with high potential and put them into development programs. If no such program is available, they start one.
The pursuit of equal pay for women is multifaceted. By being aware of the contributing factors and, as the top CFOs do, developing or repositioning programs and policies, then backing them with decisive action, financial and other business leaders can begin to close the wage gap.
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