The Gender Pay Gap: Addressing Systemic and Modern Challenges

The wage gap between men and women working full time in the U.S. is a complex issue rooted in systemic biases and career barriers. However, modern challenges, such as the COVID-19 pandemic and the rise of automation, are introducing new obstacles to pay equity.

During the pandemic, women lost more jobs than men did and were more likely to shift to part-time employment due to increased caregiving responsibilities. When the economy rebounded, median earnings for women working full time increased in 2023 — but only half as much as they did for men. As a result, the gender wage gap increased for the first time in 20 years.  

Now, artificial intelligence presents a new challenge: 8 in 10 women in the U.S. workforce hold jobs highly exposed to generative AI automation, compared to 6 in 10 men. As women are projected to soon comprise the majority of the workforce, businesses must proactively safeguard and empower this significant employee segment.

As modern challenges reshape the workforce, leaders must take decisive action to promote pay equity and career stability for women. Now more than ever, organizations must push for progress, not just a return to the pre-pandemic status quo.  

Unpacking the Gender Pay Gap 

In 1979, women working full time earned just 62% of men's earnings. While this gap narrowed rapidly throughout the 80s and 90s, progress slowed in recent decades. At the rate the wage gap closed from 2000-2022, women working full time in the U.S. aren’t expected to see pay equity until 2067.  

The wage gap is not as cut-and-dry as “women get paid less” — and the solution isn’t just for organizations to pay women more. Instead, understanding why there is a wage gap and identifying the driving factors behind it are critical steps for addressing disparities and creating real change.  

1. Women earn less than men in the same individual occupations.

In 2023, women working full time earned 86.6 cents on the dollar compared to their male counterparts. Female chief executives earned 84.5% of male chief executives’ median weekly earnings. In 2024, the median weekly earnings for female lawyers were about 80.4% of the median weekly earnings for male lawyers in Q4. In health care, female physicians earned less than male physicians, even when controlling for specialty and experience.  

2. Women are less represented in high-paying occupational fields than men.

According to the U.S. Bureau of Labor Statistics, women remain underrepresented in many high-paying occupational groups. In Q4 2024, women comprised around a quarter (26.4%) of computer and mathematical occupations and only 17.2% of architecture and engineering occupations. Median weekly earnings for these fields were $1,921 and $1,873, respectively. 

In contrast, women dominated health care support (86.4%) and personal care and service occupational groups (76.1%), which had average median weekly earnings of $753 and $757, respectively.

3. Women are less represented in high-paying roles than men. 

Within occupational groups, a major driver of the gender pay gap is a high concentration of women in lower-paying roles. According to McKinsey & Company, women represent 48% of entry-level corporate positions but only 29% of C-suite positions.  

In 2024, women outnumbered men in the legal industry nearly 4 to 3 (831,000 to 613,000) While around 3 in 4 men (460,000) worked as lawyers — the highest-paying role in the field — less than half of women (391,000) held lawyer positions. The majority of remaining women held lower-paying support roles, including paralegal and legal assistant positions. This trend is also apparent in health care occupations

While pay disparities vary across fields, there was no major occupational group in 2024 where the median weekly earnings of full-time wage- or salary-earning women surpassed those of men.

The Wage Gap Grows with Age

Across roles and industries, it’s important to recognize that women experience greater pay disparity with age. In Q4 2024, women ages 16 to 24 earned 90.6% of men’s median weekly earnings. This disparity increased in age groups 34 to 44 and 45 to 54, where women earned around 81% of men’s earnings. In the age group of 55 to 64, women only earned 76.8% of men’s earnings. 

Societal and Systemic Barriers Perpetuating the Wage Gap

While progress has been made over the last 45 years, several deep-rooted societal and systemic factors continue to drive the persistent wage gap between men and women.

Societal Expectations and Occupational Segmentation

Gender norms often influence career choices, steering women into lower-paying fields such as education, health care, and administration. A study by Columbia Business School found that, when encouraged to follow their passions, women’s and men’s career choices often align with “traditional” roles. However, when financial decisions are emphasized, women are more likely to enter high-paying, male-dominated fields such as science, technology, engineering, and mathematics.

The same gender-driven patterns appear in apprenticeships. In 2024, the median hourly wage for women in registered apprenticeships was 63.4% of the median hourly wage for men. This disparity stems from women being overrepresented in lower-paying fields, not from unequal pay for the same work.  

The “Broken Rung” Effect in Career Advancement

Women are promoted to leadership positions at lower rates than men. According to McKinsey’s 2023 Women in the Workplace report, for every 100 men promoted to first-level management, only 87 women achieve the same milestone. This initial gap creates a ripple effect up the corporate ladder, resulting in men holding 62% of leadership roles while women occupy just 29% of C-suite positions.

Career Gaps and the Motherhood Penalty  

Motherhood continues to widen the wage gap. In 2023, mothers earned 31% less than fathers, a persistent disparity known as the “motherhood penalty.” In contrast, men experience what is called the “fatherhood bonus,” with increased earnings and career opportunities. 

Women are more likely to take career breaks for caregiving, impacting their long-term earnings and hindering their promotion chances. Workplaces continue to penalize career gaps, making it more difficult for women to return to high-paying roles and take on leadership roles. Studies show that college-educated mothers also earn significantly less than nonmothers after the age of 40.

Unconscious Bias Fuels Pay Disparities Within Occupations  

Even in the same roles, women often earn less than men due to biases in salary negotiations, performance evaluations, and promotion decisions. Gender stereotypes link leadership qualities such as ambition, confidence, and assertiveness to men, impacting women’s career progression.  

Ageism only worsens these challenges. Women over 40 are often viewed as having “too much family responsibility,” and young women face a “credibility deficit” and are more likely to be mistaken for interns or junior staff.  

Trends to Watch in 2025

Now, modern challenges are adding new obstacles to equity for businesses. Leaders must recognize the evolving dynamics to continue progress toward inclusion.

AI Replacing Women-Held Roles: As AI adoption accelerates, 21% more women than men are susceptible to automation replacing their roles. Many of the positions most vulnerable to automation — such as administrative, customer service, and data entry roles — are disproportionately held by women. Businesses must consider how to strategically implement AI to enhance roles and empower employees rather than replace them.

Global Pay Transparency: At the current pace, closing the global wage gap could take around 130 years. However, pay transparency is emerging as a key strategy, alongside anti-discrimination laws, to accelerate progress. SHRM’s February 2025 Current Events Pulse revealed that nearly half (49%) of HR professionals agree that their organization is transparent with employees about how pay decisions are made. Still, over 4 in 10 (43%) said their organization did not share pay band or pay range information with employees.  

In the EU, the European Union's Pay Transparency Directive requires member states to enforce salary transparency measures by June 2026. In the U.S., pay equity legislation varies by state, but salary transparency is gaining momentum. Multiple states across the U.S., including California, Hawaii, and Washington, D.C., have enacted pay transparency laws, with Illinois following suit in January 2025.  

Pros and Cons of Remote Work: Flexible work options appear to offer significant advantages for women in the workforce — but often come with hidden challenges. Remote and hybrid workers frequently miss out on networking opportunities and face reduced visibility, hindering their chances for promotion and salary growth. Location-based pay disparities also disproportionately affect women and caregivers, who are more likely to work remotely.  

However, emerging pay transparency laws are pushing organizations to ensure equitable compensation for remote employees. If done right, hybrid work models can help close gaps by providing greater flexibility, reducing career breaks, and improving leadership retention. Flexible work arrangements also boost job satisfaction and reduce turnover — particularly for women, who are 26% more likely than men to consider leaving a job due to lack of flexibility.

Organizational Interventions and Best Practices

The wage gap won’t close on its own. Organizations must take intentional steps that extend beyond legal compliance to achieve meaningful progress. “Building an equitable workplace isn’t just the right thing to do — it’s a strategic imperative,” said Oates-Forney, reflecting on the importance of purposeful change.  
 
“Prioritizing equity and pay transparency reduces potential legal risks and positions businesses to stay competitive in a rapidly evolving marketplace,” she said. “Moreover, when businesses commit to equity, they not only create an environment that attracts and retains exceptional talent but also foster a culture driving employee satisfaction and boosting productivity. Doing so unlocks the full potential of their people, fueling innovation, creativity, and sustainable growth.”

Here are tailored steps for CHROs, HR leaders, and HR professionals to promote pay equity within their organizations:

HR Executives

• Implement clear, publicly available pay scales to foster fairness, prevent disparities, and stay ahead of evolving pay transparency laws. According to SHRM’s February 2025 Current Events Pulse, 61% of HR professionals reported that their organization conducted pay equity audits to identify pay differences between employees performing similar work that could not be explained by job factors.  

• Conduct regular pay audits, including of bonuses and stock options, to identify and address wage gaps between men and women in similar roles. AI-powered tools can simplify and expedite this process by analyzing payroll data, uncovering patterns of bias, and recommending salary adjustments. While AI can help mitigate human bias, ongoing oversight is essential to ensure fair and accurate compensation decisions.

• Design hybrid and remote work policies that promote flexibility without limiting career growth. Ensure these programs support equity and transparency, preventing barriers that keep women from advancing into leadership roles.

HR Leaders

• Provide unconscious bias training to ensure fair hiring, promotions, and evaluations. Address how biases, such as gendered assumptions about leadership abilities, can impact decision-making to mitigate issues before they arise.

• Promote equitable career advancement by championing programs that ensure career trajectories are not hindered by caregiving. Career re-entry programs, such as “returnships,” support women in transitioning back into high-paying and senior-level roles. Tailor job training, coaching, and onboarding programs to help women smoothly transition back into the workforce.

• Support flexible work options, such as remote or hybrid work and flexible hours, to help women and caregivers balance responsibilities and stay in the workforce.

HR Professionals  

• Be transparent about salary ranges and pay policies. Providing employees with clear information helps build trust and reduce uncertainty about compensation fairness.  

• Structuring a fair interview process is essential. Ensure candidates are assessed based on objective criteria to reduce the influence of personal biases.

• Standardize performance evaluations and use clear, measurable criteria for promotions and raises to minimize bias. Train managers to recognize and mitigate bias to promote equity across your organization.

Accelerating the Path to Pay Equity

Achieving pay equity requires more than just awareness — it demands intentional action from businesses and society. By addressing systemic barriers and emerging challenges, embracing transparency, and investing in equitable career opportunities, organizations can do their part to close the gender wage gap and create a more inclusive, fair workforce for future generations. 

Learn more about pay equity and explore strategies, insights, and resources to drive meaningful change in your organization.