Unequal Career Advancement Fuels Gender Pay Gap

The primary driver of gender pay inequality is the "opportunity gap"—the barriers that keep women in lower-level, lower-paid, individual-contributor positions compared to those held by their male executive and management counterparts, new data reveals.

"The ongoing conversation about gender pay is really a call to action for employers to provide equal access to the best-paying positions in their organizations," said Lydia Frank, vice president of PayScale, a compensation software and research firm.

From January 2017 to February 2019, nearly 1.8 million people took PayScale's salary survey, which provided data for the firm's report, State of the Gender Pay Gap in 2019.

Gender Pay Disparities—It's Complicated

In 2019, women earn 79 cents for every dollar men earn, PayScale found. This is the uncontrolled pay gap—the difference between the median salary of all men and the median salary of all women in the workforce. The finding reflects a 1 percent improvement from 2018.

By contrast, the controlled pay gap, which measures the differences in pay for men and women with similar jobs and qualifications, shows women earn 98 cents for every dollar earned by a male peer, unchanged over recent years.

(Click on graphics to view in a separate window.)

Workers who took a break from the workforce for 12 months or longer experienced a "wage penalty" of 7.3 percent lower pay over the course of their career, compared to the wages earned by workers in similar positions who did not take a break, the report notes: "Women take more breaks and longer breaks than men, primarily for taking care of children and aging family members, and bear the brunt of this time-off penalty."

In other findings:

• The gender gap widens with age. Women ages 20 to 29 experience the smallest uncontrolled gender pay gaps, and women ages 45 and older experience the most inequity. Over their working lives, women increasingly lag behind men in being promoted into higher-paying, senior management or executive jobs, researchers noted.
  

• Highly educated women experience a larger pay gap. Women with MBAs take home 74 cents for every dollar men with MBAs do. So while they are equally credentialed in this regard, men and women with MBAs end up with different job titles and at different job levels, or they work in different industries, the research found.
  
  

In many cases, "the path to pay discrepancies begins with the life choices made by men and women as they enter their formative career-development years,” said Alonzo Martinez, associate counsel for compliance at HireRight, a provider of background screening services. "Generally, women take on the responsibility to stay at home and care for children, and therefore are saddled with lower-pay opportunities when they choose to re-enter the workforce, simply because employers do not translate life experience as a parent to work experience as a prospective employee."

Negative Attitudes Persist

New data from global staffing firm Randstad US further delves into how gender-based discrimination is tied to women taking new-child leave and time off for family needs. The firm's January 2019 survey of 1,227 working adults found that:

• 45 percent of female respondents said they've experienced more obstacles to career growth than their male colleagues, and 29 percent of male respondents believed they face more obstacles than women.
  

• 36 percent of the men felt that women should not necessarily earn equal pay if their employers allow women to take more time off than men for family leave.

The survey results also suggest that a surprising number of people harbor negative feelings about new mothers and those with young children, seeing them as less dedicated to their jobs, distracted at work or needing too much time off, according to the report.

"If employers are bringing diverse talent in the door but they're not advancing, that's not inclusion. You're just checking boxes," said Audra Jenkins, chief diversity and inclusion officer at Randstad North America. "Diversity and inclusion ensures that all employees have access to development and advancement opportunities that can lead to increased compensation."

[SHRM members-only toolkit: Managing Pay Equity]

Career Obstacles

"The corporate career pipeline for women remains stubbornly leaky [with] women disappearing from the career and leadership trajectory at every stage of their professional lives," wrote the authors of a 2018 report from Waltham, Mass.-based Bentley University Gloria Cordes Larson Center for Women and Business (CWB).

Often, "these problems reflect an outmoded culture—workplaces that require a 24/7 mentality, offer inadequate flex options or have leaders that don't set the right tone," said Trish Foster, CWB senior director and lead author of The Pipeline Predicament: Fixing the Talent Pipeline.

The report, which compiled data from recent studies, including joint research by consultancy McKinsey & Co. and the nonprofit LeanIn.org, points to these barriers:

• Women in midcareer often face unconscious bias against mothers and challenges to work/life balance.
  

• Compared to men, women lack adequate access to career-building relationships, such as with sponsors, mentors, role models and networks.

To combat these hurdles, employers can:

• Address unconscious bias through formal training programs.
  

• Establish clear, understandable, actionable metrics around recruitment, retention, advancement and pay.
  

• Consider workplace flexibility to support work/life balance and caregivers.

"Studies demonstrate a commitment to improved gender representation in most companies, especially at the top," Foster said, but "a critical key to success is closing the gap between intent and implementation."

"Human bias is still one of the largest contributors within organizations" to unequal advancement opportunities, said Tanya Jansen, co-founder of beqom, a compensation management technology and services firm. Top management's commitment to equality is a necessary first step. In addition, Jansen recommended using software to help eliminate both intentional and unintentional bias "when managers evaluate employees' performance, so that employees are promoted based solely on their credentials and performance."

"Simply paying individuals what they are worth based on their merit and skill" will ultimately shrink the wage gap, Martinez advised. "Employers need to move beyond looking at prior pay as being indicative of talent. Workers of equal capacity should be compensated fairly and equitably, regardless of gender."

Related SHRM Articles:

Study: Gender Pay-Gap Narrows but Still Exists, SHRM Online, April 2019

House Approves Paycheck Fairness Act, SHRM Online, March 2019

Employers Less Transparent About Pay, Aspire to Be More Open, SHRM Online, March 2019

To Improve Gender Equality, Help Men Take Parental Leave, SHRM Online, January 2019

Family Obligations Widen Gender-Pay Gap, Research Suggests, SHRM Online, December 2018