Archive for “April, 2017”

Are you a manager? Pay inequality is your fault.

A new study shows that men and women will one day receive equal pay for equal work! Unfortunately, it’s estimated that day will arrive in 2059 – 42 years from now, which might as well be never.

Today is Equal Pay Day, the date that symbolizes how long women have to work to make what their male counterparts do in the previous 12 months. To put this another way, for every dollar a man makes in North America, a women makes about eighty-five cents.

This is not a new topic (in fact, we’ve been talking about it for an astonishing 75 years), and there are lots of government initiatives that seek to close the pay gap all over the world. But I refuse to wait another 42 years for this issue to be addressed. Clearly, whatever we have been doing, we are doing wrong.

Pay inequality is not something that can be fixed by legislation alone. Pay inequality must be addressed by managers, working within the budgets and control they already have. And there’s no way on earth it should take until 2059.

Doubt this? Let me tell you the story of how, when I ran the global digital marketing team at SAP, I eliminated pay inequality among my direct reports in less than two years. As is true for many large companies, during annual review season (usually winter/early spring) managers are given a budget for salary increases, typically 3-5%, depending on your industry and the health of your company. Within this budget, you must provide both merit and increases to match inflation (ranging between 1.7-2.5%, depending on locale). Of my leadership team, almost half were female, and I wanted to see how salaries compared to those of the men. Not surprisingly, there was inequality between people with similar responsibilities and experience, though not as grave as a full 15% shortfall (salaries are also adjusted based on geography – a loaf of bread in Silicon Valley does not cost the same as it does in Walldorf, Germany). Nevertheless, we had unexplained differences in the amount men were paid vs. women.

So I did something radical. As a manager, I took responsibility for correcting my teams’ pay gap. I showed my analysis to HR. I explained that over the next two years, I was going to address this problem by using my existing payroll budget. I gave everyone the minimum inflation increase, modest merit increases where warranted, and the rest of the budget I plowed into bringing womens’ salaries up to that of their male counterparts. I did this within the budget I had. I made it a priority. And no one had a problem with it.

Can we please stop waiting for some magical day when government or business will somehow come up with the tens of billions of dollars required to do this at scale? No one is ever going to write that cheque. Instead, if you are a people manager who actually cares about this, you should do the same simple analysis, figure out where you need to be, what you have to work with, and fix pay inequality on your own team. If leaders take personal responsibility and action over the next few years (even the next decade is an improvement) there’s no way we’re going to have to wait until 2059 for women to be paid fairly for the work they do.

If you’re a manager, pay inequality is your responsibility. Now, go fix it.