April 2016
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Closing the Gender Pay Gap

Monday, April 11, 2016

As diversity and equality become more important, many businesses are unfortunately slow to change. One of the most clear-cut problems is the gender pay gap, or the fact that men, on average, are paid more to do the same jobs as women. First, it’s important that a company identify and clarify a pay gap problem. While the gap across the entire economy isn’t tremendous—about 97 cents on the dollar—the gap for specific jobs at individual companies can be much more severe. There are many possible solutions for this problem, but two stand out as particularly actionable. First, hiring managers should broaden their talent pools. Homogeneous companies tend to be implicitly biased against outsider groups, whereas those divided evenly tend to be more equitable and more profitable. Second, data should be used to support compensation decisions. Raises should be based on things that can be measured, not just “gut instincts,” which often reflect unconscious biases.

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