4 ways businesses can close the gender pay gap

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It’s more than halfway through 2018, and it feels as though it’s proving to be The Year of Women.

With the rising prominence of campaigns championing women’s rights such as #MeToo and #TimesUp, feminism has reached a new level of public consciousness.

There’s a renewed sense of global solidarity which, on this year’s International Women’s Day, resulted in 24-hour strikes across 50 countries worldwide (including Spain, France, the UK, India, South Korea and Australia) as women protested against sexism, workplace mistreatment and wage disparities.

It is no secret that women continue to be paid less than their male counterparts – according to the Workplace Gender Equality Agency, in Australia, women in full-time employment earn on average 15.3%, or $253.70 less per week than men.

The issue is particularly prominent in Western Australia, where the gap stands at 22.5%. What’s more, the gap has remained largely unchanged for over 20 years (the lowest recorded gap was in 2004 at 14.9%).

Finance (where women earn 26.1% less than their male counterparts), real estate (23.6% less), the arts (23.0%) and health & social services (22.8%) were found to be amongst the worst culprits.

Indeed, the World Economic Forum’s Global Gender Gap Index 2017 puts Australia 42nd out of 144 countries for economic opportunity and participation – putting it behind markets including New Zealand (23rd), Thailand (24th), the Philippines (25th), Myanmar (26th), Singapore (27th) and Vietnam (33rd).

In fact, the issue is so prevalent that the World Economic Forum predicts it will take over 200 years for the economic gap to be closed. Clearly, we’ve got a long battle ahead.

One of the greatest challenges we face is that the inequality is systemic. For example, many organisations and recruiters will ask candidates for their salary history which, if used to benchmark the pay that will be offered, naturally poses issues as it only perpetuates pre-existing wage gaps.

Perhaps contrary to popular belief, research from PayScale (albeit in the US) further suggests that women who decline to disclose this information when asked are penalised and paid approximately 1.8% less than women who do share.

Men, on the other hand, are rewarded and paid around 1.2% more in the same scenario.

In response, it’s interesting to note that a number of US states and cities have recently passed or proposed legislation to ban salary history questions from the recruitment process – to clarify, this is different from ‘salary requirement’, which is the pay a candidate expects from a job.

At HireRight, we too have modified our background screening platform so that our default offering excludes inquiries and verifications of a candidate’s compensation history to encourage this best practice.

While Australia, namely the Sex Discrimination Act introduced in 1984, does prohibit discrimination against men or women on the basis of sex, marital status, pregnancy, sexual orientation and gender identity in a range of areas in public life including employment, the reality is that legal avenues to pursue equal pay are limited.

A lack of transparency makes it difficult to find out and prove in the first place, while the cost to litigate and the possibility of reputational damage is enough to make taking action difficult if not impossible.

So what can businesses be doing to help close the gap? From a recruitment standpoint, there are some simple changes that you can implement.

1. As a policy don’t ask the salary history question, plain and simple

It’s not in the best interest of the candidate, regardless of whether their previous salary was low or high, and automatically puts them in an awkward position of having to decide what they want to reveal.

It may also give them the wrong impression about your approach to talent acquisition.

2. Price the job, not the person

Set a salary range for the position and stick to it – this levels the playing field both from a gender and age perspective, so that employers can focus on position-related criteria such as candidate experience, skills and cultural fit.

3. Change your lines of enquiry

It’s fair that employers want to ensure a candidate is affordable before investing additional time and resources into the hiring process, so tweak the question to salary expectations, where the candidate can set the benchmark.

4. Be transparent about how pay is determined within your organisation

This will empower candidates (and existing employees) to measure themselves against expectations for each grade.

Gender parity will take some time yet to come to fruition, and recruiters and employers cannot bear the responsibility alone – it must be a collaborative effort from all corners of society to move the needle.

But every contribution to the cause helps – and if we build on the momentum and promise of this year, surely we can do better than another two centuries of inequality?

Dawn Hirsch is the chief human resources officer at HireRight.

HireRight delivers global background checks, employment, and education verification services to organisations worldwide.

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