August 17, 2020

I am continuing the discussion of metrics today, moving into the issue of gender, race and pay. The national data is clear—there is a gender pay gap, and a further pay gap when you combine gender and race.

The gender wage gap refers to the difference in earnings between women and men. For years, experts have calculated this gap in a variety of ways, coming to the same conclusion: Women consistently earn less than men, and the gap is wider for most women of color. Analyzing the most recent Census Bureau data (U.S. Bureau of Labor Statistics, “Women in the labor force: a Databook,” Washington: U.S. Department of Labor, 2018) women of all races earned, on average, just 82 cents for every dollar earned by men of all races. And for women of color, the gap is worse—Black women earn 62 cents and Hispanic women earn 54 cents for every dollar earned by men of all races.

These numbers are not insignificant—especially when studied over time. If you consider the work life for most individuals to be approximately 40 years—this means a difference in earnings of $557,000 for white women, $941,600 for Black women and $1,121,440 for Hispanic women.

As you can see, pay equity matters. Combating national trends can occur at the national and state level with pay equity legislation—and that is important. But it also takes time.

So, what do we as leaders do to change this reality in the environment that we control?

Just like tackling any complex issue, we need to know what we know and what we don’t know. We need to compile data, and then ask a lot of questions about those data. We need to understand what is happening within our organization. As part of The Fedcap Group’s Metrics That Matter initiative, we analyze employee demographic metrics on a quarterly basis. We look for patterns in hiring, salaries and promotions by race and gender, both across the organization as a whole and within our individual companies. Then we share the information.

Combating inequity in pay requires education and transparency within HR and among hiring managers.