4 Ways to Close the Gender Pay Gap in Your Business

4 Ways to Close the Gender Pay Gap in Your Business

The gender pay gap is a hot topic in businesses today.

Failing to achieve pay equity can be the difference between a candidate applying or not. It can even damage your staff retention rates too.

According to the gender pay gap figures released in April 2019, eight in 10 UK firms pay men more than women.

So, despite there being a lot of talk surrounding the gender pay gap issue – it seems like a lot of businesses are failing to implement an effective strategy.

However, the coffee brand Starbucks isn’t one of them.

Over the past 10 years, they’ve been taking proactive measures to ensure the gender pay gap issue is resolved once and for all.

To give you an idea of what it takes to achieve pay equity within your business, here are a few things Starbucks introduced.

Create a set starting salary

Back in 2008, Starbucks started to use a salary calculator to take a candidate’s experience, skills and education into account before establishing a set salary bracket for the type of role they were applying for.

By doing this, they were able to take the gender question out of the equation before any candidate even pressed apply.

The only way a salary can be negotiated at Starbucks is by running the notion by the review committee.

A set banded salary gives your business boundaries and won’t let anyone stray too far away from pay equity.

Recruiters and HR professionals won’t be open for major negotiations, as you’ll have a process in place.

Always be upfront with candidates

Advertising the set salary bracket on the job advert will provide further clarity too.

So, a candidate won’t feel like they can persuade the interviewer into giving them more money. 

Naturally, every professional will endeavour to land the highest salary in the band.

But with the salary calculator taking skills, education and experience into account, there’s no arguing with the proposed amount.

At least if you offer a candidate a lower hourly or annual salary, your business will have some wriggle room to provide raises further down the line.

Being upfront or transparent with a candidate should also involve telling them exactly how you’ve landed at the end salary total.

This way, your candidates will know where they stand and can use the acquired information to improve themselves.

Forget about the past

One of the most common mistakes which leads to the ongoing gender pay gap is when employees ask a candidate for details on their previous salary and benefits.

While keeping overhead costs to a minimum is essential in every business, it shouldn’t play a key role in determining a candidate’s salary.

Why?

Well, the underlining problem is that women, on average, been paid less in their previous roles.

So, if you ask them about their salary, there’s a high probability that you’re going to offer them less than you are willing to offer.

You’re subconsciously contributing to the cycle of pay inequity.

Example:

You’re hiring two sales managers.

Bob and Lucy have the same amount of experience, skills and education. You decide to hire them both and are willing to pay £30,000 per year.

In his previous job, Bob revealed that he earned £28,000, so you naturally give him the £2,000 bump.

In her previous job, Lucy revealed that she earned £23,000. Now, instead of offering £30,000, you use this information to give her a £4,000 increase for a total annual salary of £27,000.  

While Lucy’s salary increase might be happy at first, she won’t be if she finds out she’s on less than Bob further down the line. You’ve missed a key opportunity to close the gender pay gap.

Use promotions to close the gender pay gap

Rectifying the gender pay gap also involves current staff too.

The best way to successfully do this is to use any pending promotions to boost a female employee’s wages.

This won’t cause any issues within the dynamic of the business as the total will be aligned with your salary bands and other male employees doing the same job with similar experience.

Starbucks usually offer their staff a 10% pay rise for promotions.

However, by having this flexible option in place, they could increase this for any existing female employees who weren’t aligned within the bands.

Any female candidate taking a work transfer opportunity is another chance to apply this principle as well.

On the other hand, annual reviews aren’t a good time to do them if you’re hoping to maintain a positive and healthy work culture.

Pay rises from annual reviews often get leaked.

So, if you’re handing out big ones based on their sex alone, it won’t go down well if a male has worked 10x harder and achieved more results than an unproductive female.

Offering pay rises to achieve pay equity based on a promotion is celebrating a female’s achievements within the business.

Nobody can argue at a bigger annual salary if they’ve worked their backside off to get it.

It’s about finding a balance to keep everyone happy.

Start closing the gender pay gap today

If your business is serious about closing the gender pay gap, you need to start shaking things up now.

Unless your business is a global industry giant like Starbucks, you’ll see positive changes within months.

This will not only boost staff retention and help quash this pressing matter, but it’ll make your company look more attractive to candidates.

Be a fair employer and close the gender pay gap.

Enjoyed reading this? Then you should check out our previous blog: ‘5 Ways to Improve Gender Diversity When Recruiting’.

Or to receive more helpful tips like this, subscribe to our recruitment blog today.

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