Career
Jun 8, 2021

Women in Corporations Series: The Gender Pay Gap

Challenge #2

The Gender Pay Gap

Are women in corporations being underpaid and is there a gender pay gap? Let’s look into it.

Welcome back to the second blog series on the Gender Pay Gap. In the first blog series, we looked at the challenge of balancing work and life. The second challenge coincides directly to the first whereas in today’s corporate culture, working long hours (overtime) is synonymous with commitment, and determines whether or not you get a pay raise or promotion. Given the unequal division of work and taking care of the house-hold, how are working women expected to reach their financial goals and be promoted?

So, firstly, what is the gender pay gap? It is ultimately a measure of what women are paid relative to men. It is most commonly calculated by dividing women’s wages by men’s wages, and this ratio is often expressed as a percent, or in dollar terms. Women currently make 80 cents to a man’s dollar of earnings, and these gaps persist throughout every wage level.

In 2019, the Czech Ministry of Labour conducted a survey and found that 49% of Czechs take it for granted that women in the CZ simply will just not have the chance to earn as much as men in the same position. Despite recent movements for equal pay, the gender pay gap in the CZ is still over 20% - one of the highest in the EU. Shockingly, the biggest gap, where women earn 21% less than their male counterparts, is found among business managers and sales. In the IT sector as well, the CZ has the largest gender pay gap in Europe.

On a company’s income statement, employee salaries are the largest expense. It is not without reason as pay drives performance, efficiency, and productivity. Yet, women are still paid less for the same work. A woman just starting out will lose $406,760 over a 40-year career, according to a 2019 analysis by the National Women’s Law Center in the US.

Closing the gender pay gap may be largely due to corporations not taking enough action in truly addressing the fundamental issues in the workplace. It is not enough to introduce just flexible working hours alone. We need to tackle the issues surrounding gender role attitudes and the culture of working long hours. Flexible working hours gives women more control over when and where they work, but it also allows mothers to stay as full-time employees. Not to mention, working moms moving into part-time positions to lower paid and lower skilled jobs is a major reason why there is a gender pay gap.

Solutions

Pay Equity Audit

Leading initiatives should be taken by corporations to implement a pay equity audit, which ensures they are paying their employees fairly. In other words, a measure that ensures employees are being paid “like for like” work and reasonably taking into account various backgrounds, job performance, and experiences. Finally, monitoring and tracking the hiring, promotion, and compensation processes on an ongoing basis which creates a strong system of checks and balances.

Shifting the corporate mindset by public debate & Transparency

It starts by shifting the mindset of not only our corporate culture, but via public discourse. To make a change, we need to start talking more about the problem. The problem being that there is a silent bias where salaries in the corporate world undermines the payment of the female gender in organizations. We need to create an environment of openness that will enable women to fully achieve parity with men at work. This strategy entails pay transparency. Employees should be able to discuss their salaries with their colleagues, particularly women, so that they know if they are making the same pay for the same job. The US introduced The Equal Pay Act that requires both men and women in the same workplace to be given equal pay for equal work. This act reduces pay secrecy, and gives women better tools to address pay discimination.

Policy changes

Speaking of policies, we need policies that initiate an attitude change towards gender roles. Specific gender equality policies are certainly required, but can only be effective if embedded in an environment that is promoting equal and inclusive labour rights. Gender specific policy measures are more likely to be effective in a supportive and forward thinking environment/workplace. Inclusive and transparent workplaces should adopt policies such as supportive wage practices that facilitate women’s continuous employment integration and at the same time engages fathers and reduces discrimination against mothers.

Paternity-leave

Getting fathers involved in the early stages of raising children is detrimental in helping working mothers relieve their responsibilities so they are able to focus more on work, and ultimately remove the stigma towards flexible working hours. Well-paid paternity leave in the first year of a child’s life – as done in countries such as Norway, Sweden, but also Germany is one of the surest bets in ensuring that fathers are involved. This is not only good for the family, it takes away the added pressure and stress on the relationship, and in turn increases work productivity overall.

So, again, awareness, empathy and enforcement of the principles of equal pay for same work and for work of equal value could be increased if applied to all workers and jobs within a corporation. High quality audits on gender pay gaps, reinforced by a culture of transparency with respect to pay are a precondition for effective enforcement and monitoring.

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