Why Payroll Equity is Critical to a Diverse Work Place, Inclusion and BelongingPosted by Lee Everett on February 19th, 2021 We are now existing with the pandemic for nearly an entire 12 months. Locking down is no longer a unique occurrence, and the assumptions we may have had regarding why the global pandemic would affect women have been soundly pushed to the gutter. When we were first told to work remotely, my first reaction was one of hope. If now both caregivers, and obviously then I am referring to households with two employed adults, were not leaving, then probably this will reorient the house work and childcare tasks? That we might see a change as then each obtained those tasks upon themselves equally. Was I wrong. The pandemic far from becoming a great equalizer has pushed women not merely out of the workplace but is additionally impacting them more significantly. As noted in the World Economic Forum’s report Women in the Workplace 2020, at year-end of 2020, millions of women were pondering retiring from the employment permanently. Elsewhere, a British report observed that females are 1.5 times more likely than men to have either lost their job or resign since the pandemic began. Minorities and females of color are even more negatively impacted. The publication observed that “compared with women in the workforce, Latinas are more likely to be concerned about layoffs and furloughs. Additionally LGBTQ+ women are almost 200% as likely as colleagues overall to cite mental wellness as one of their biggest challenges during the pandemic.” One of the primary reasons for the harsh employment loss numbers? McKinsey’s analysis observed that women’s employment are 1.8 times more at risk to the crisis than men’s. One reason for this is that many females are employed in industries decimated by the pandemic. The hospitality industry employs more women than men. It is not merely in the economic arena that females are suffering. Data from the UN shows an upsurge in calls to domestic violence phone banks across the globe. Why payroll parity is more critical than ever Yet, there is an additional issue at play here. Often the main reason the woman is the one to relinquish her employment is entirely economic. Who makes more money? When both parties are employed, it makes sense for the person with the higher income to stay in their job and the other person to resign. Here’s where the issue starts because, as we all know, the amount of pay inequality is overwhelming. Observing the most recent data, in 2020, females make merely --content--.81 for each dollar a man earned. The controlled gender payroll gap, that considers metrics like job title, length of experience, industry, and geography, uncovered that women make --content--.98 for every a man earns. While within this controlled data, the largest gap is between the earnings of black females and Caucasian men. As noted in the publication, African American females make --content--.97 for each dollar a white man with equal qualifications makes. At initial observation, this appears to suggest that the difference in earning power is relatively low when you compare like with like. Yet, it’s more nuanced than that, and that’s why it requires our attention. While men and women at the equal experience may get similar pay, the issue is that there is strong evidence that men get advanced at a faster pace than women. The further up the ladder the higher the compensation, and herein lies the challenge. This is why it’s not merely the salary that we should think about – by determining presumptive raises awarded across a 40-year career, women will lose 0,000 on average over a career. Research shows that when females have kids it adversely impacts their payroll potential. The so-named “Motherhood Penalty” leads to employed mothers being thought of as less committed to their employer and requiring a more accommodating schedule. Statistics show that the pay gap is substantially higher for women with kids. How payroll analytics could raise awareness about gaps in your organization While numerous factors add to pay inequities, one of the ways to address it is by identifying where the gaps are and then trying to close the gap. Many employers are not aware that there exists is a difference. Part of the problem is a lack of information, a lack of understanding around existing pay scales. In a 2020 report, we know that more than half (56%) of those studied said their employers do not have a formal process to fight pay equity , whilst 70% don’t use salary structures to manage pay. To redress this data gap, and as part of their work for customers who are located in the UK, Immedis developed a robust report that plainly reveals the way a company pays its employees based on gender and age. From measuring the issue, companies could make informed actions about how to change and achieve pay equity. As well as the country by country analysis, Immedis also provide international data for Gross and Net pay. Why it is critical to study data Aside from the fact that it’s a lawful requirement in the U.K., there’s also the existing bias existing for tangible proof. In short, people want proof. Without data and robust analyzing, it is easy to take for granted that all is fine and that you are doing right for your employees. From the information, companies can gain a better understanding about how they are paying their employees and if there are any obvious differences, that can be addressed.Like it? Share it! More by this author |