Close Gender Pay Gaps by Knowing Your Talent Skill Gaps

Close Gender Pay Gaps by Knowing Your Talent Skill Gaps

Assessing candidates and employees objectively based on skills not only helps companies fill positions to achieve business results, it extends fairness in the workplace that can end gender, diversity and inclusion, and pay equity gaps. Setting aside bias with a purely objective, data-driven comparison of skills helps everyone. According to Wharton Business School professor and organizational psychologist Adam Grant, S&P 1500 firms that place a premium on innovations are more likely to do it if they have more women on their top management teams.   

States like Massachusetts aren’t waiting for companies to self-regulate. This year the state updated its pay law, barring employers from asking how much you make in a job interview, and making it illegal for employers to pay employees of a different gender lesser wages for comparable work. And Massachusetts isn’t alone — nine other states have bans, with local municipalities starting to follow suit.

Although the laws are, in fact, changing, there’s still a lag in adoption by many states. Federal protection does exist because of the Equal Pay Act, signed into law in 1963. Where there is no state or local mandate, companies must comply with federal legislation. But just being compliant is complacent. The act has been in effect for nearly 60 years and the median income for men in most states is $10,000 more on an annual basis. Yes, there has been progress. However, a 2017 McKinsey & Company and Leanin.org report shows corporate America is not on the road to gender equality. I’d argue we can do better. And women deserve better!

Doing better begins with going beyond surface-level assessments to understand the skills and experiences of the talent within your organization. That begins with knowing each employee’s work history, performance evaluations, special projects, and career desires — from the time of hire. And being able to easily access that information before critical decisions are made about promotions and salary increases. Career pathing technology can give companies this type of data all in one place.

Technology that allows talent leaders to scientifically and quantitatively assess an employee’s skills removes the subjectivity that can lead to compensation bias. Career pathing provides a deeper, objective look at the skills needed to perform in a position. With the backing of solid, scientific data, you could essentially provide a legally defensible comparison between two people in the same role.

Having a solution that eliminates subjectivity as the base for determining compensation and competencies can be an effective tool in addressing the gender pay gap in a meaningful way within your company. It can also help organizations develop a proactive strategy to keeping women engaged during their childbearing years when the salary divide increases significantly. According to a Census Bureau study on parent earnings in the U.S., immediately after women have their first child, the pay gap between spouses doubles. Women who give birth between age 25 and 35 are even more vulnerable. The study shows their pay never recovers relative to that of their husbands.

Narrowing the gender pay gap starts with recognizing these factors and removing the barriers that make it more challenging for women to get ahead. The companies that are getting the pay gap right are not complacent. Instead, they are empowering employees to take ownership of their career path and are going beyond diversity to be inclusive of women and minorities.

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Close gender pay gaps by identifying and closing talent skill gaps, ensuring equitable growth and opportunities for all employees. Ready to see our software in action? Request a career pathing demo.

FAQs

How does skills-based assessment help close gender pay gaps?

Skills-based assessment sets aside subjective judgment in favor of objective, data-driven comparisons, which reduces the room for bias to influence compensation and promotion decisions. With scientific data backing a comparison between two people in the same role, organizations can build a legally defensible basis for pay decisions rather than relying on manager impressions.

What legal protections exist around pay equity, and are they enough?

The federal Equal Pay Act has been in place since 1963, and additional state laws are emerging, such as Massachusetts barring employers from asking about salary history and prohibiting unequal pay for comparable work regardless of gender. Nine other states have similar salary history bans. Even so, the post notes that compliance alone hasn’t closed the gap, since the median income for men in most states remains about $10,000 higher annually.

What role does career pathing technology play in addressing pay equity?

Career pathing technology centralizes each employee’s work history, performance evaluations, special projects, and career aspirations from the time of hire, making that information accessible before promotion and salary decisions are made. Having this data in one place supports a more objective comparison of skills rather than relying on incomplete or informal records.

How does the gender pay gap change after women have children?

According to a Census Bureau study on parent earnings, the pay gap between spouses doubles immediately after a woman’s first child, and women who give birth between ages 25 and 35 are especially vulnerable, with their pay never recovering relative to their husband’s earnings. This is presented as a specific point in a woman’s career where proactive skills based strategies matter most for keeping the gap from widening.

Is having more women in leadership linked to any measurable business outcomes?

According to Wharton professor Adam Grant, S&P 1500 firms that prioritize innovation are more likely to achieve it when they have more women on their top management teams. This is cited as one reason pay equity and skills based advancement aren’t just fairness issues but also connect to business performance.