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NFPCC Original Article: The Full Picture with Gender Pay Equity

Is gender pay equity gap as big of an issue in 2018 as it has been in previous years? We are all told that gender pay equity is measured on the same scale, but in reality the gap virtually disappears when analyzing the same level, company, and function. Most articles cite “The Simple Truth about the Gender Pay Gap” graph (shown below), but this graph has been used since 2016 and frankly is not looking at the full picture. We are well into 2018, and we have seen a lot of changes in the United States as it relates to gender pay, and the data is starting to change as well. Companies are starting to look at the full picture, and they are finding the root cause of the issue.

In a study done by Korn Ferry, researchers analyzed information from Korn Ferry’s PayNet database – the world’s largest pay database – to create the Korn Ferry Gender Pay Index. The Index is an analysis of gender and pay for more than 1.3 million employees in 777 companies in the U.S. Using this robust resource, Korn Ferry found the much-publicized pay gap between men and women in the United States is real, but it is predominately caused by fewer women than men in higher-paying roles. To further the point, the Korn Ferry research found when comparing pay between genders overall in the U.S., men are paid considerably more (17.6 percent) than women, which coincides with other research on the subject. However, the Korn Ferry Gender Pay Index found that, when evaluating the same job level, such as director, the gap fell to 7 percent. When considering the same level at the same company, the gap further reduced to 2.6 percent. When male and female employees at the same level and the same company worked in the same function, the average gap amounted to 0.9 percent. This does not overshadow that a good number of companies still have a lot to fix with their pay between women and men; but true apples-to-apples comparisons are starting to be made, and the full picture is showing a much more equal pay than we thought.

Given the increased interest in pay equity, prudent companies will conduct pay equity studies to manage the risk of litigation but more importantly, to create a competitive advantage in their industry. As more and more legislation is written on pay transparency, companies that exceed their peers in pay equity will be seen as more desirable employers.

NFP Compensation Consulting can help ensure your business is competitive by developing a plan to monitor pay practices 

The Process Includes:

  1. Annual review of pay in terms of gender and ethnicity to identify departments, jobs or individuals that appear to have a discrepancy toward a protected class.
  2. Where discrepancies are found, research the employee records to determine if an appropriate reason for the discrepancy exists.
  3. Create a process to correct inappropriate discrepancies. For example, set aside a portion of the merit pool to accommodate equity adjustments.
  4. Review your population to confirm the company is adequately represented when compared to the geographic labor market. If you find your representation is low, set hiring goals to reduce the gap.
  5. Develop a curriculum to train supervisors on how to monitor pay ensuring that equality is top of mind. Establish accountability from supervisors and hiring managers to reach your diversity and equality goals.

Partner with NFP Compensation Consulting and gain that competitive edge to set your business apart. A plan designed to close the gender pay gap and establish fair and equitable compensation practices will position your organization to not only attract the best talent but also boost productivity and performance.


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