We still have to deal with it. Unequal pay, often referred to as gender pay gap.
What exactly does this mean?
Gender pay gap describes a difference in average earning between men and women within the workforce. It is typically expressed as a percentage representing how much less women earn compared to men.
The gender pay gap affects women´s earning potential and consequently their long-term financial stability.
The gender pay gap is not only a fact, but also present in our heads and the media with everybody talking about it. Few actions have been taken to address this. However, there are several other pay gaps, less talked about and probably less obvious.
There is a racial and ethnic pay gap, an age pay gap, a disability pay gap, sexual orientation and gender identity pay gap, education pay gap, geographic pay gap, occupational pay gap, union and non-union pay gap, sector pay gap.
Beyond these specific pay gaps income inequality refers also to the overall distribution of income within a society. High levels of income inequality indicate that a small portion of the population earns a disproportional share of the income.
The workforce participation rate is 72,2% in women and 92,5% in men. Women do a greater share of unpaid labour at home. In 2019, data from 33 countries representing 54% of the global working-age population found that men spent 19% of their time in unpaid work, while women spent 55%.
You may think that a higher education level equates to higher pay. This is not true for women regarding the gender pay gap.
In Germany, women with a bachelor's degree earn 78 cents for every dollar earned by their male counterparts with the same education level and job. The gender pay gap often widens with more education.
It affects retirement of women, due to women´s lower earnings and higher share of part-time work. Women receive less in Social Security benefits and lower pension benefits than men.
Korea has the largest gender pay gap in the world. In Europe in 2021 the highest gender pay gap was Estonia with 20,5% and the lowest Luxemburg with -0,2%, the European average is a bit below 15 %.
Estonia is followed by (around 20% gaps) Austria and Germany. After there are Hungary, Slovakia, Finland, France, Czechia (15%), Latvia, Denmark, Netherlands, Bulgaria, Lithuania, Portugal, Sweden, Croatia, Malta, Greece, Ireland, Cyprus, Spain, Belgium (5%), Poland, Slovenia, Romania, and Luxemburg with the lowest.
What are the reasons for and forms of pay gaps? There are several factors influencing:
- Occupational Segregation
Men and women often work in different industries and occupations, with some sectors paying less than others. This leads to disparities in earnings.
- Wage discrimination
Discrimination based on gender, whether overt or subtle, can result in women being paid less for the same work or for work of equal value.
- Motherhood penalty
Women who have children may experience a reduction in earnings due to factors like taking time off work, working part-time, or facing biases related to caregiving responsibilities.
- Lack of Representation
Gender imbalances in leadership positions and high-paying roles can contribute to the pay gap, as women may have fewer opportunities for career advancement.
- Negotiation Differences
Studies confirm that women negotiate salary and benefits less aggressively than men, which can affect their initial and subsequent earnings.
- Unpaid Care Work
Women take a disproportionate burden of unpaid care work, such as caregiving for family members. This can and often does limit their ability to participate in the labour force or pursue higher paying roles.
Unionized workers negotiate for better wages and benefits, leading to differences between union and non-union workers in similar roles.
- Geographic location
Regional variations in the cost of living and economic situations can lead to differences in wages. Urban areas offer higher pay than rural regions.
- Global Economic Trends
Global economic factors as economic recessions or shifts in labour markets can influence wage disparities.
- Legislation and Policy
Government policies and labour laws can either reduce or exacerbate pay gaps. Equal pay laws and anti-discrimination legislation play a role in addressing disparities.
A lot of these factors are culturally and historically influenced. Addressing pay gaps requires comprehensive efforts, including policy changes, workplace initiatives, education, and societal awareness. Recognizing the roots in societies, companies and on the policy, level is essential for implementing effective strategies to reduce and eventually eliminate these disparities.
What are these strategies or how can you reduce and avoid these disparities?
It is important that you know your worth. Research salary benchmarks for your industry, role, and location. There are websites that provide salary information. Learn about the range for your experience and qualification.
Also, negotiate your salary. Once you have a realistic idea regarding the salary, negotiate it. Be prepared when you are looking for a new job seriously. Practice negotiation skills and be confident in discussing your value to the organization.
Highlight your achievements. Keep a record of your accomplishments, skills, and contributions you make to the company. Explain why you deserve fair compensation.
Continuously invest in your professional development and skills. Stay current with industry trends and technologies to remain competitive in the job market.
Document and address discrimination. If you suspect discrimination or realize differences or unequal treatment consult with HR or legal counsel if necessary.
Support and advocate for pay equity, know the laws. Openly discussing salaries can uncover inequalities. However, such transparency is uncommon in Europe, where many avoid discussing exact salaries.
If you need help and support with this, choose a recruiting agency.
Recruiters play a significant role in addressing and reducing pay gaps within organizations. They know the industry and roles, laws, wages, and the facts of reality. An agency will help you negotiate and find a fair solution for you.
To support and implement pay equity recruiters consider the following aspects:
Apply blind recruitment practices. Bias is removed through blind recruiting during the initial stage of the hiring process.
Recruiters are transparent about salary ranges. They promote and advocate for pay equity policies. HR may conduct regular pay audits to identify wage disparities based on gender, race, or other factors.
Educate hiring managers in respect to pay gaps, how to discover and how to eliminate them. Train them in compensation practices and make them understand the potential consequences of bias in hiring decisions.
Recruiters can diversify talent pools and monitor salary negotiation to improve. They can support an inclusive culture.
Generally, recruiters can be instrumental in creating a fair and inclusive hiring environment that helps reduce pay gaps not only during the recruitment process but also throughout employees´ careers within the organization. Recruiters are vigilant, proactive, and committed to promoting pay equity, in their own interest, for their clients and candidates.
They are one part contributing to positive change in the workplace as for fairness and inclusion. (Source for statistics: www.ec.europa.eu)
Equality is constitutional.
It will be achieved when humans have the same rights, are granted the same respect and are paid equally for the same work.
Ready to work with a recruiter to address the pay gap in your organization? Contact us today.