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Ensure a Positive Candidate Experience When Hiring Contingent Talent Remotely

As digitization, coupled with the global pandemic, propels contingent hiring online and with more individuals relying on employer reviewer sites to evaluate businesses, delivering a positive[...]

March 10, 2021

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Pay Parity and Gender Equality Dramatically Improve the Economy

Pay parity is one of spring’s biggest diversity topics. And there’s a good reason. Every April, women’s earnings catch up to men’s from the last year. On average, women must work an extra 103 days to earn the same amount of money as their male colleagues. That’s why, in 1996, the National Committee on Pay Equity originated Equal Pay Day, an honorary observance of the ongoing wage gap between men and women. Since its inception, the symbolic holiday has raised public awareness of discrepancies in pay, based on gender, and helped generate visibility for the wider challenges that persist in diversity and inclusion efforts. However, all that changed this year. A U.S. court and a sitting president just shattered egalitarian policies that have been in place since 1963. Now, more than ever, is the time for staffing professionals to shine. Promoting gender equality plays a vital role in retaining top talent, boosting bottom line profits, attracting consumers to your brand, and embodying a conscientious, fully human work culture. It isn’t just good for business, however. As McKinsey Global Institute demonstrated, pay parity will dramatically improve the economy.

Setting the Clock Back on Decades of Gender Equality Progress

Spring may be the season when we set our clocks forward, yet civil protections seem to have been turned back a few decades. On April 27, the 9th U.S. Circuit Court of Appeals overturned a lower court’s ruling that said pay differences predicated exclusively on prior salaries were discriminatory under the Equal Pay Act. What does that mean in terms of pay parity? Employers can legally pay women less than men for the same work based on previous salary histories. As Inc. and the Associated Press explained:

That’s because women’s earlier salaries are likely to be lower than men’s because of gender bias, U.S. Magistrate Judge Michael Seng said in a 2015 decision.

A three-judge panel of the 9th Circuit cited a 1982 ruling by the court that said employers could use previous salary information as long as they applied it reasonably and had a business policy that justified it.

“This decision is a step in the wrong direction if we're trying to really ensure that women have work opportunities of equal pay,” said Deborah Rhode, who teaches gender equity law at Stanford Law School. “You can’t allow prior discriminatory salary setting to justify future ones or you perpetuate the discrimination.”

President John F. Kennedy signed the Equal Pay Act into law in 1963. The federal legislation prohibits employers from paying women less than men for equal work performed under similar working conditions. However, it creates exemptions when pay is based on other factors such as seniority, merit, quantity or quality of work. This is the loophole that has allowed some employers to offering lower wages to women professionals.

Pay parity suffered another blow earlier in April when President Trump revoked Obama’s Fair Pay and Safe Workplace executive order. As Mother Jones reported, “It required companies with federal contracts to heed 14 different labor and civil rights laws, including ones aimed at protecting parental leave, weeding out discrimination against women and minorities, and ensuring equal pay for women and fair processes surrounding workplace sexual harassment allegations.”

In a stroke of ill-timed irony, the president repealed this order during the same week on which Equal Pay Day falls, unraveling protections intended to foster equitable workplaces for women.

“We have an executive order that essentially forces women to pay to keep companies in business that discriminate against them—with their own tax dollars,” Noreen Farrell, the director of Equal Rights Advocates, told NBC. “It’s an outrage.”

Gender Inequality is Bad for Business

There are deeper concerns beyond wage inequalities. Census data show that the most predominant jobs for women involve lower-paying positions such as food servers, cashiers or secretaries. Meanwhile, men outnumber women in lucrative fields: programmers, lawyers, physicians and others. When women do break down the barriers and enter those ranks, they find substantially less pay for the same work. As a result, the World Economic Forum drew the dire conclusion that, in the absence of change, it would take the world 118 years to finally close the economic gender divide.

The Forum’s 2015 Gender Gap Report, the most recent published, also painted an unflattering portrait of the United States as a champion of pay parity. America ranked 28 on a list of 145 countries for pay parity. That was the lowest position it has ever occupied. Surpassing it were some surprising nations, such as Rwanda, Slovenia and the Philippines.

Whenever regulations are removed, threatened or voted down, the prevailing rationale is usually that “it’s good for business.” Yet as we’ve seen time and again, hobbling diversity and inclusion do not cultivate innovation, competitive advantages, growth or economic power.

In the tech space alone, as Erin Carson illustrated in her article on CNET, there’s a hefty price tag on diversity failures. On the same day that the 9th Circuit Court made its controversial ruling, the Kapor Center for Social Impact released a study showing how discrimination and sexism are costing the technology industry billions. The study surveyed more than 2,000 people who had quit tech jobs in the past three years. Researchers discovered that 78 percent of respondents admitted to experiencing some form of mistreatment or unfair behavior. Close to 40 percent of underrepresented talent cited discrimination as their primary reason for leaving.

“Replacing those employees is what lands tech with a $16 billion bill every year,” Carson pointed out. And the study’s authors concluded that “there is a high cost to bad culture, and this is a self-inflicted wound.”

Gender Parity’s Incredible Boon to Business and the Economy

Women make up more than half the talent pool. Beyond that, they’re responsible for over 80 percent of the buying decisions in this country. That’s an overwhelming amount of consumer power. By failing to promote women as equal leaders in the workplace, businesses effectively stifle their own profit potential. The data revealed by McKinsey showed that the issue is much more sweeping: “Every state and city in the United States has the opportunity to further gender parity, which could add $4.3 trillion to the country’s economy in 2025.”

In other words, over the next decade every city and state could add at least five percent to their Gross Domestic Product (GDP) by championing the economic opportunities of women. The report also found that half of U.S. states have the potential to add more than 10 percent, and the country’s 50 largest cities could increase GDP by six to 13 percent.

Echoing the research of the World Economic Forum, McKinsey acknowledged that realizing these goals by 2025 remains an unlikely scenario; too many barriers persist that hinder women from fully participating in the labor market. However, McKinsey proposed an attainable best-in-case model. If each U.S. state matched the state exhibiting the fastest rate of gender parity growth, we could add “$2.1 trillion of incremental GDP” by 2025. That’s 10 percent higher than running with the status quo.

To examine the impressive benefits on a smaller scale, a state like Illinois could generate an increase in its GDP of nearly $60 billion -- a jump of seven percent for simply narrowing the gender income gap.

Achieving Gender Parity

As staffing professionals, we have an obligation and the expertise to help the nation build a truly egalitarian workforce -- where skills, not gender, determine compensation.

  • We can help locate flexible roles and work cultures, where travel is minimized, schedules are fluid and options for remote work exist. Even with the aggressive push for innovation and output, more employers are developing family-friendly options. As experts in sourcing and recruiting, we can become ideal advocates for women professionals seeking the appropriate balance between personal and career responsibilities.
  • We can help to design accelerators and networking programs for leadership and managerial opportunities.
  • We can include financial and skills training for victims of abuse or women re-entering the workforce after prolonged absences.
  • By matching skills to needs, without bias, we can work to equalize the sectors where women are recruited. While they dominate growth areas such as education and health care, they remain underrepresented in higher paying roles like IT and manufacturing.
  • By adopting a more consultative approach to employers, we can help businesses create a team of diversity champions, across all employment levels of the enterprise, to advise on fair and inclusive processes for retention, recognition, skills coaching, effective management techniques, bias prevention education, performance and compensation reviews, and more.
  • We can set inclusiveness goals and hold managers accountable.
  • We should strive to develop and implement merit-based hiring strategies that emphasize ideal cultural fits -- not familiarity fits -- aligned to the organization’s overarching strategies and objectives. These strategies focus on filling key positions with the best people across diversity groups, eliminating perceptions that people are hired to fill quotas.
  • Successfully recruiting women must involve a serious focus on compensation, skills development and advancement opportunities.We can lobby governments to consider ways to make paid parental leave and improved child care a reality for men and women alike. Women perform more than twice as much unpaid work as men. And although men now want to increase their time at home, many feel they can’t without sacrificing the household income.
  • We can help facilitate cross-sector collaboration between governments, businesses and nonprofit organizations.

Equal Pay Creates a Larger, More Vibrant Economy

Top performing companies have long realized the benefits of diversity as a profit center, employment brand, business culture and innovation machine. Though women today have attained historic highs in terms of career progression and leadership opportunities, there are still significant pay gaps and prejudices. And the situation defies reason.

  • Full-time working women, despite their greater likelihood of completing a university education, earn 18 percent less than men.
  • Women are more likely than men to invest larger portions of their incomes in the education and health of their children, ensuring the development of stronger future talent.
  • Gender-balanced workplaces generate higher levels of efficiency savings, employee engagement, productivity, financial performance, and better meet the needs of diverse suppliers and customers.
  • Companies that actively promote women outperform their competitors, with overall profits 34 percent higher.

Leading the charge for gender parity doesn’t end with a healthier bottom line -- it ends with a more productive, fulfilling and economically powerful nation for this generation and the next. Last June, we discussed how staffing and recruiting professionals still find themselves called upon to “make the business case” for diversity. Economists have made it to an exhaustive extent. Business analysts have made it. The staffing industry, itself born from diversity, has made it for decades. There’s a vast difference between trying to understand inclusion methodologies and seeking justification for the practice.

Yet, we may be called upon to make that business case once again. And we can. We have a storied history of helping organizations identify and conquer their biases to hire exceptional professionals -- regardless of who they are or where they came from. Right now, we must continue to champion an inclusive workforce regardless of politics, policies or accommodations. To compete and grow, we as diversity heroes must push to help clients develop the most innovative, progressive, thoughtful and insightful business cultures possible. I truly believe this is critical chapter in the future of our talent – one we must help author.

Casey Enstrom
Casey Enstrom
Casey is one of the staffing industry’s household names, specializing in sales and operations leadership. He brings extensive knowledge of business development and sales strategies, predictive analytics, leadership, and human capital solutions. Prior to Crowdstaffing, Casey served as the Vice President of Technical Sales, North America, for a Fortune 1000 staffing firm.
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