[{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.the-future-of-commerce.com\/2020\/03\/29\/closing-the-gender-pay-gap-how-to-become-an-equal-pay-employer\/#BlogPosting","mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2020\/03\/29\/closing-the-gender-pay-gap-how-to-become-an-equal-pay-employer\/","headline":"Closing the gender pay gap: How to become an equal pay employer","name":"Closing the gender pay gap: How to become an equal pay employer","description":"At the current rate, closing the gender pay gap would take 100 years. But there's a workbook to help employers close it, STAT. All the info is in this post.","datePublished":"2020-03-29","dateModified":"2024-02-26","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/contributor\/katrina-ghazarian\/#Person","name":"Katrina Ghazarian","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/katrina-ghazarian\/","identifier":408,"image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/71bf7d9247fd486dd7f16f9df96fd7911b65d66fd3657b22ba78f83d9038833b?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/71bf7d9247fd486dd7f16f9df96fd7911b65d66fd3657b22ba78f83d9038833b?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"The Future of Commerce","logo":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2023\/01\/logo-foc-schema-app-1.png","width":172,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2020\/03\/1200x375-equal_pay_workbook-Hero.gif","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2020\/03\/1200x375-equal_pay_workbook-Hero.gif","height":375,"width":1200},"url":"https:\/\/www.the-future-of-commerce.com\/2020\/03\/29\/closing-the-gender-pay-gap-how-to-become-an-equal-pay-employer\/","about":[{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/customer-experience\/","name":"Customer Experience","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Customer_experience","http:\/\/www.wikidata.org\/entity\/Q984142"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/customer-experience\/employee-engagement\/","name":"Employee Engagement","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Employee_engagement","http:\/\/www.wikidata.org\/entity\/Q14937678"]},{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/purpose\/gender-equality\/","name":"Gender Equality","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Gender_equality","http:\/\/www.wikidata.org\/entity\/Q113453"]},"Inclusion & Diversity",{"@type":"Thing","@id":"https:\/\/www.the-future-of-commerce.com\/hxm-human-experience-management-solution\/human-resources\/","name":"The Future of Human Resources","sameAs":["https:\/\/en.wikipedia.org\/wiki\/Human_resources"]}],"wordCount":1333,"articleBody":"As I write this, women are earning 81 cents for every dollar a man earns. That’s according to an uncontrolled study published by Payscale.From 2018 to 2019, we saw a 1% improvement, and from 2019 to 2020, 2%. And while in their controlled study, where men and women were measured for the same position and qualifications, women earn 98 cents for every dollar a man earns, closing that 2 cent gender pay gap is expected to take 100 years.I\u2019m not going to take this time to discuss why equal pay is important \u2013 it\u2019s important.Instead, I’m going to give you the tool to make it happen.My organization has been privileged to work with companies who want to do the right thing, but they’re unsure about how, or even where, to start. Overhauling your compensation strategy and building out the system to maintain it can be a daunting task. I assure you though, it can be done.How do I know? Because I require it from any company that wants us to be their HR service provider, and they\u2019ve paid for it.I\u2019ve realized over the years that this mission to close the gender pay gap is much bigger than I am, and that I’m doing it a disservice by making the solution available to only a select number of companies.So, here it is:Closing the gender pay gap: The compensation analysis and pay ranges workbookNote: Values below are just examples. Companies should do their own research to determine the values that work for them. Part 1: Building the workbookDownload a copy of your current employer roster with title and pay.Start a new workbook in Excel or Google Sheets.Create a tab for each company department (e.g., Administrative, Marketing, Accounting, Operations, Sales).For each department, label the following columns:Column A: PositionColumn B: Range WidthColumn C: Min (for minimum)Column D: Mid (for mid range)Column E: Max (for maximum)Entering Your DataColumn A: PositionsList each department position from entry-level to C-suite (or whatever you call the department leader). It doesn’t matter if not every position is currently filled, you just want what the company has decided on as the career path for the department.Column B: Range widthRange width will determine the difference in range from one position to its succeeding position.Non-management positions should have a range width between 15% and 25% because people tend to stay in these positions for a shorter tenure than the management positions.Management positions should have a range width between 30% and 40%, allowing these employees a longer period to stay in the position before reaching max range.*Range width does not have to be the same value for all positions in a department.Column C: Determining minimum values There are several ways to go about this:Entering the local minimum wage as the first minimum value (if you plan to pay any positions minimum wage)Determine the compensation strategy for the company. How competitive the company wants to be will determine the strategy. If the company wants to pay above market, the values need to be above the 50th percentile of the position\u2019s range. It is important that company size and geographical location is considered when determining which range to use.A company can be more specific in determining that they want to pay in the 70th percentile of the market range. Using at least three salary sources and finding the average 70th percentile value will make these ranges more accurate.*Values can be in the form of hourly wage or annual salary. If most positions are non-exempt positions, it is best to use hourly wage values. Values should be base salaries and not include commission or bonuses.Column D: Determining mid-range values Enter the following formula in all of the cells* in Column D: =(C2+E2)\/2This formula will automatically enter the middle value between the minimum and maximum values.*Be sure to adjust the formula to use the coordinating number for each row.Column E: Determining maximum values Enter the following formula in Column E: =(B2*C2)+C2This will solve for the determined range width and minimum values entered.Column F: Additional notes This is where we like to list the minimum wage and minimum exempt salary for the area to ensure that exempt positions have the minimum salary as the minimum value in Column C.Closing the gender pay gap, part 2: Analyzing the rosterReview each employee on the roster and highlight them based on how much they are paid:Yellow = They are paid within their title’s rangeGreen = They are paid more than their title\u2019s rangeRed = They are paid less than their title\u2019s rangeDealing with overpaid employees\u00a0If they are less than 5% over the range and they\u2019re the only one in that position, leave it alone for now or give them more responsibility to justify it.If they are less than 5% over the range and there are others with the same title and function, bring the others up and increase the minimum value by 5%.If more than five people with the same title are over the maximum range, go back to the workbook and increase the minimum range.If they are more than 5% over the maximum range because they have more responsibility or their functions are more complex than others in their position, create another row\/range and give this one a \u201csenior\u201d title or increased grade (e.g. Senior Accountant, or Staff Accountant II).In most cases when employees are 5% or more over the range, a title change will be necessary.Dealing with underpaid employees\u00a0If they are less than 5% under the range and the only one in that position, increase their salary to bring them in range.If they are more than 5% under the range, they\u2019re either underpaid or they have an inflated title.If there are several employees more than 5% under the range, create another row\/range and give this one a \u201cjunior\u201d or \u201cassistant\u201d title. (e.g. Junior Staff Accountant, or Accounting Assistant).Auditing for equal payWhen it comes to auditing for the gender pay gap, it’s important to keep the following in mind:1. In most industries, salaries should be based more heavily on job functions than experience.If two employees have the same responsibilities and functions, they should be paid the same unless one has had more tenure within the company and received merit increases based on performance over time.For positions where years of experience and credentials are strongly related to how well and how complex of a job a person can do (engineering, teaching, coaching, government, security, etc.), there is a third part to this project.2. Women re-entering the workforce. Sometimes women take time off to have and care for children. Companies cannot use this as leverage to pay her less than males in the same position. Companies need to decide if they believe she will succeed in the position or not. If not, move on and find a candidate the company believes in so she can continue her search for an employer who believes in her.3. It\u2019s ok to admit fault.In most cases, companies are not underpaying women intentionally or maliciously. If a company realizes there is pay inequity after this exercise, resolve the matter professionally and commit to ensuring it doesn\u2019t happen again (such as using the workbook for salary decisions moving forward).There IS a solution for equal pay. Whether the company wants to tackle it themselves or hire a consultant to do it \u2013 closing the gender pay gap is achievable.If there are HR consultants who want to use this for their clients and get paid to do so, you have my blessing. And if you have questions, concerns, or feedback, I\u2019m listening.Together we can increase this improvement rate for a more equal workplace.  Equality for ALL:Go from messaging about inclusion to making it a reality."},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2020","item":"https:\/\/www.the-future-of-commerce.com\/2020\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"03","item":"https:\/\/www.the-future-of-commerce.com\/2020\/\/03\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"29","item":"https:\/\/www.the-future-of-commerce.com\/2020\/\/03\/\/29\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Closing the gender pay gap: How to become an equal pay employer","item":"https:\/\/www.the-future-of-commerce.com\/2020\/03\/29\/closing-the-gender-pay-gap-how-to-become-an-equal-pay-employer\/#breadcrumbitem"}]}]