GENDER WAGE INEQUALITY: 4 WAYS WOMEN CAN BREAK THE CYCLE

Reading time: 4 min

The wage gap is a commonly cited issue in many countries, and it can create huge barriers in the workplace. However, many people dispute whether it even really exists! In many countries, it’s illegal for companies to pay men more than women for the same jobs, and yet gender pay discrimination is still very much a reality in the modern world. It’s thought that in 2024, it had dropped to around 7% in the UK. Wikipedia estimates that in the US, women earn around 80% of what men earn. In China, the gender pay gap stood at around 26% in 2023, and in India, senior women were earning only around Rs 85 for every Rs 100 that a man in the equivalent position would earn. In Australia in 2024, the gender pay gap sat at 11.9%. These stats highlight clearly what a lot of people know already: the gender pay gap exists and we need to step up our game.

While many organizations have taken steps to reduce the gap and boost the earning potential for women, there are many factors that make this more challenging. For example, women are thought to negotiate less than men, and even when they do negotiate, may ask for less . This puts them at a significant disadvantage in many cases, and can have a long-term impact on their earning potential. Since salaries are often raised according to percentages, starting off low can consistently pull your salary down over the years. Over the course of a career, this could add up to hundreds of thousands of dollars. Of course, negotiation is far from the only factor in the gender pay gap, and it’s very much a gender-based issue.

It’s not just women who suffer, either; many LGBTQIA+ individuals may be victimized by the gender pay gap. Not many studies have looked at this area, but for example, according to a study, trans women are thought to be paid around 60 cents for every $1 the average American might earn. In such cases, individuals may be suffering both as women and as members of the LGBTQIA+ community. Race can be a key factor too, with racial discrimination potentially lowering the earning potential of women across the world. Gender pay inequalities are therefore key for everyone to consider.

What, therefore, can be done to bump up workplace equality and ensure that we award equal pay for equal work? The move needs to come from organizations predominantly, but it’s important to acknowledge that this is a tricky and complicated area. Let’s explore practical steps organizations can take to eliminate unequal pay for equal work.

Tip 1: Review salaries regularly

The first concrete move that organizations can make is to perform regular reviews of salary bands. Pay audits are a great way to spot discrepancies. That’s true not just for gender wage inequality, but for racial inequalities too. By examining where salaries are set, organizations will get swift access to actionable areas.

Indeed, because it’s illegal in many countries for men to be paid more than women, this kind of audit can be in an organization’s own interests. It will demonstrate their commitment to upholding the law and treating all genders equitably. It might even make them a more desirable organization to work for, but only if they’re willing to publicize their findings and correct any problems. A 2022 study found that only 23% of America’s biggest companies will disclose when they conduct gender pay equity analyses.

It’s not enough to review salaries, of course. Organizations must use their findings to eliminate any unequal pay for equal work that they discover. They need good systems for assessing what employees do and the ability to rectify gaps quickly and effectively.

Tip 2: Encourage negotiation

Many organizations play hardball when it comes to salary negotiations, trying to get employees for the lowest possible salaries. This is a false economy because it leads to people leaving those jobs more quickly. Turnover is expensive for businesses, so paying fair market wages can be a way to reduce it and save money. Furthermore, you’ll only get the best candidates if you’re prepared to pay them what they’re worth!

That means you should be open about salaries in advance and encourage job-seekers to negotiate, especially if they’re female or female-presenting. Many women differ from men in terms of what they think is a reasonable ask, and this means they’ll usually ask for less. By being open about salary bands and actively encouraging women to negotiate, organizations can reduce the gender pay gap at the time of hiring, and this will improve their overall pay equity.

Tip 3: Encourage men to take parental leave

This tip might sound surprising, but it’s a demonstration of just how important gender pay equality is for all workers, not just women. By encouraging men to take parental leave, organizations are indirectly supporting women in the workforce, because they’ll be reducing their caregiving burdens and allowing them to focus on their careers. Doing this represents a psychological shift away from seeing childcare as women’s work, and creates equality on a fundamental level that could spell real change in important areas.

Furthermore, if this becomes widespread, it may reduce hiring biases. Many organizations are reluctant to hire mothers because they worry that their focus and commitment will be split. Increasing men’s role within the home and as an equal parent could make it easier to eliminate this bias. Additionally, this benefits men by allowing them to spend more time with their families, and helps to bring more equity to the space in general. This could underpin equity efforts in many ways.

Tip 4: Offer more advancement

The gender pay gap is focused on pay inequities within the same level, but assessing it becomes much more difficult when we bring different levels of seniority into the equation. Most people are well aware that fewer women appear in leadership roles for a range of reasons. A significant one is that companies simply don’t advance them as readily as they do men! A McKinsey study indicates that in 2018, for every 100 men promoted to their first managerial role, only 79 women received the same promotion. By 2024, this number had increased slightly to 81 women, underscoring ongoing gender disparities in workplace advancement.

This is not feeding into the problem of unequal pay for equal work argument, but looks at the issue on a bigger scale, unequal work opportunities based on gender discrimination. This is hugely problematic because it reduces a woman’s earning potential across her career; promotions are one of the most effective and immediate ways to increase your earning power. By choosing not to promote women, consciously or subconsciously, organizations are limiting their earning abilities in both the short and long term.

By following these four effective strategies for tackling gender wage inequality within your workplace, you can make a difference and be part of shrinking the gender pay gap. In doing so, you won’t just be benefiting women, but everybody, so the impacts are potentially huge.

Time to get hands-on!

A pay equity audit is a practical exercise to address gender-based wage disparities. Organizations begin by collecting and analyzing data on employee compensation across demographics to identify pay gaps for similar roles. They then evaluate systemic factors like hiring practices, starting salary disparities, and promotion pathways. Workshops can be held to educate employees on the gender pay gap, negotiation strategies, and pay transparency policies. Based on findings, organizations develop action plans to adjust salaries, standardize pay bands, and implement equitable bonus structures. Regular pay equity audits and transparent communication with employees ensure sustained progress, fostering a culture of fairness and equality.