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It may be a century or more since women won the right to vote, but there is still no victory in sight when it comes to equal pay in the workplace. While few doubt the fairness of equal pay, the figures point to a salary gap between men and women doing the same job. In Europe, the pay difference is 16.40/01, rising to 18.20/02 in the United States and a remarkable 27% in Japan3. What’s more, that gap acts as a brake on business growth. A study by the McKinsey Global Institute4 predicted that bridging the gender gap in the UK, for example, could potentially create an extra El 50 billion of GDP in 2025.
Today, the nudge theory takes center stage.
While motherhood is seen as the root cause of this inequality, companies can take action to improve matters in the workplace – with benefits and rewards policies able to play an important role. Here are three ways that firms can redress the balance:
Equality should be the rule in every organization. One reason why this is not the case is women’s reluctance to negotiate over their starting pay or an agreement for an annual review. According to Katie Donovan, founder of consultancy Equal Pay Negotiations, only 30% of women negotiate their salaries – compared to 46% of men.
Only 30% of women negotiate their salaries
While women need to start addressing this issue, a good starting point for employers is to identify the size of their gender pay gap and to report the results. In a UK survey of 715 employers, 70% of respondents said they believed that gender pay gap reporting would reduce the disparities. Awareness of the issue is clearly key, though. A pan-European study found that 53% of respondents did not see the point of reports – as they believed that women already received equal pay
For firms that press ahead, training should be provided for line managers so that they can answer employees’ questions about the reports, while company intranets and social media offer platforms for discussion and Q8As about the results. Rather than being isolated initiatives, these reports should be part of an equal pay review process that includes effective governance of rewards, along with corrective actions when disparities are identified. Analytics can be used to better understand how and where female employees are hired, promoted and retained in the business.
All these initiatives have an important role in monitoring women’s pay as they pursue their careers. However, it is equally important to consider how pay inequality arises in the first place. For many women, the pay gap begins during the recruitment process. To address this at Sodexo Benefits 8 Rewards Services, a pay grading system is being introduced for every position, so that salaries are aligned with skills and responsibilities, rather than gender. “It’s a continuous process,” says Isabelle Zapp, Diversity Coordinator. “Jobs are graded and then re-graded, creating new opportunities for career development and mobility.”
Coaching, mentoring and sponsorship can help women to develop their careers and increase the pipeline of female talent. PayPal’s highly-rated Unity Mentorship Program7 matches 100 mentors with mentees, for example, while Sodexo’s Women Work network8 in the UK and Ireland supports career development for women and works to achieve gender balance in the company. The network organizes a range of mixed-gender events to help women share good practice, build their contacts within Sodexo and get involved in charitable activities. At the same time, external groups can also give a helping hand. In Hong Kong, the Women’s Foundation9 helps to improve opportunities for women and girls through research, education, community programs, media engagement and advocacy. Elsewhere, the environment can be less supportive, however. A 2017 studyi0 found that only 54% of women have access to mentors or sponsors.
Gender pay reports, mentoring and family-friendly work arrangements can all make a real difference to women’s pay. However, they need to be part of a broader strategy to bring more women into the management and senior executive levels. Gender equality should be a destination that the whole company is working toward.
Gender equality should be a destination that the whole company is working toward.
Sodexo has long shared that objective and supports women with initiatives such as training, mentoring, gender networks and awareness-raising. Driving this strategy is the Sodexo Women’s International Forum for talent (SWIFt), which brings together 34 senior leaders to promote the advancement of women. Today, women’s representation in Group Senior Leader positions has risen from 17% in 2009 to 32% in 2017, with a target of 40% by 202511. Half of the Group’s Board of Directors are now women.
Promoting equal pay and career opportunities for women is not only a question of fairness, but also of sound economic sense. However, the benefits that follow equal pay will not be realized by one-off initiatives or the occasional gender study. Only a concerted effort on multiple fronts will enable women to be paid a fair salary – and improve the performance of their employers.
“Managers need to take responsibility for equality in recruitment and pay – and to start challenging the stereotypes,” says Isabelle Zapp. “When it comes to hiring, the tendency among managers is to look for people like themselves. But creativity and innovation comes from having people with different profiles – and that includes women.”
Programs to put women’s careers on the right track
Despite some progress in recent years, equal pay for women remains a challenge for all industries. Rohini Anand, Senior Vice President Corporate Responsibility & Global Chief Diversity Officer at Sodexo, discusses ways of tackling the gender pay gap.
Why does it make business sense for companies to eliminate the gender pay gap.
RA: For a start, paying men and women equally for equal work is clearly the right thing to do from day one. Pay gaps typically start early in a career, when women are hired on lower salaries and lack the negotiating skills to improve them. Yet equal pay for women has real business benefits. Equality enhances engagement and retention, while inequality affects advancement. Women are less likely to take on more responsibility if they’re not being fairly paid, which means a pay gap then becomes a talent gap.
How can childcare voucher programs help reduce that gap?
RA: They support both men and women, and particularly today’s young professional couples where men are equally responsible for childcare. Voucher programs relieve pressure and allow women to return to the workplace sooner, enabling them to engage in their work, knowing they have arrangements in place to help them.
How can Sodexo’s family-oriented offerings contribute to a more diverse workplace?
RA: Services like Créche Attitude give women the flexibility to focus on their careers, so they are certainly beneficial in that respect. But they also demonstrate that an employer is committed to the advancement of women and ensuring they have the support structures they need to be successful. And that helps a company in how it’s perceived by both current and potential employees.