Getting to Global Pay Equity through Diversity, Inclusion, and Belonging

Mar 9, 2021 

According to an MIT study, half of people employed before the pandemic are now working remotely: COVID-19 just might have forever altered the way people work. Companies such as Twitter, Google, and Facebook continue to announce that they will allow employees to work remotely going forward. It would be simple to think that flexible career options are big equalizers for women. The World Economic Forum’s Global Gender Gap Report 2020, published in December 2019, highlighted the growing urgency for action, with gender parity still at least 99.5 years away. With COVID-19 threatening to set back decades of progress on gender equality, this work is more urgent than ever. This International Women's Day, we celebrate the theme #ChooseToChallenge, and explore the role of global payroll in leveling the playing field in a new, albeit more remote, working world

 

Diversity and Inclusion in a Hybrid World

It’s well-researched that the “likes attract” rule and “similarity principle” shapes informal networks. With male domination of higher-paid sectors, such as science, technology, engineering, and math (STEM) together with law and finance, and male dominance in more senior roles, women, as a result, may find it harder to reap the career benefits that come with being in easy contact with mostly male decision-makers. Will working from home accentuate underlying inequalities by reducing physical networking opportunities? There are also more women working part-time and taking time out for care responsibilities. In January 2021, 275,000 women left the American labor force, accounting for nearly 80 percent of all workers over the age of 20 who left the workforce, according to a National Women’s Law Center analysis.

According to the World Economic Forum, the gender pay gap still runs at 31.4 percent globally, despite slowly declining in some areas over recent years. The gender pay gap is a measurable indicator of inequality between women and men. Most governments have legislated to guarantee equality of treatment between men and women in remuneration. Yet, the gender pay gap persists and the World Economic Forum estimates it will take 202 years to close the pay gap, based on the trend observed over the past 12 years.  

The International Labor Organization estimates that reducing the gap in participation rates between men and women by 25 percent by the year 2025 could raise global GDP by 3.9 percent, or US$5.8 trillion. Organizations can best take action when they can see the data. Payroll teams through reporting and data can help highlight and raise awareness of the gaps, arming organizations with the information they need, such as: 

  • Mean gender pay gap in hourly pay
  • Median gender pay gap in hourly pay
  • Mean bonus gender pay gap
  • Median bonus gender pay gap
  • Proportion of males and females receiving a bonus payment
  • Proportion of males and females in each pay quartile

 

How International Payroll Teams Can Take Action

Many enterprises ask what they can do to make their workforce as diverse and inclusive as possible, and payroll practitioners have a wealth of data to help. In an episode of the 2020 Payday Podcast, two experts from the fields of HR and payroll, both of whom have rich expertise in related technologies, discussed diversity, inclusion, and belonging. Mollie Lombardi, researcher and analyst on HR and payroll matters, and Judith Lamb, CHRO at CloudPay, offered insights from both sides of the Atlantic

1. Finding the why in diversity. It’s become clear that diversity needs to be something that organizations pay much more than lip service to. To truly address imbalances in society, businesses need to realize that diversity doesn’t just benefit individuals, it benefits the entire organization. As Judith noted during the podcast: “It comes down to the why: how is the organization going to benefit from diversity and inclusion, and how is the individual going to benefit? Not because of a tick-box exercise because a government demands certain markers, but because the organization understands the benefit of why we would want to behave in a certain way.”

2. Enabling better balance for women. The difference in the amount of money that men and women earn can't be attributed to one distinct factor. However, women working part-time or taking time out for maternity leave and care responsibilities is a contributing factor. Here, Mollie reminded listeners that many businesses are exploring ways to support women:

“A friend of mine interviewed a woman who was a high-flying executive, who had moved quickly up the ranks in a Fortune 100 company, and she went on maternity leave. While she was out, she was thinking about what she’d want to do when she went back: her relationship with work, whether she could get the work/life balance she wanted. She went back to her boss with a proposal that said ‘here’s how I’d like to balance my portfolio and how I can contribute’. They came up with a great plan to go forward and I think it’s important to remember that we can stand up and say, men or women, that we can have these conversations.”

3. The importance of data. Both Mollie and Judith agreed that payroll data has a crucial part to play in supporting gender parity in the workplace – and achieving the many benefits it can bring. It can help even at the very basic level of awareness, said Judith: “We can’t rely on this being anecdotal: we need to make decisions within organizations based on as many facts as we can pull together. An organization might have thought a year or two ago that they didn’t have a gender pay gap, but the data is going to tell them that the chances are they probably do. So we need to act on more than just our instincts.”

 

How Payroll Analytics Can Unearth Gaps in Your Organization

Digging into the depth of payroll data can help organizations get a fuller understanding of any gender-related gaps. This is especially true when using tools like CloudPay Analytics, which uses standardized data, streamlined integration, and process-based KPIs to deliver greater payroll transparency. 

 

Key Takeaways

If payroll data is understood to be the source of truth regarding your organization’s gender equality status, how can this payroll data be used in practice? Ask yourself the following questions:

  • What is the gender balance of senior and junior roles?
  • What is your current conversion rate of promotions?
  • Could we employ more women in senior roles?
  • Can we employ more men in junior or part-time roles?
  • Could we offer other benefits such as flexible working?
  • How can we appeal to new employees in a gender-neutral way?
  • Is our bonus structure gender neutral?
  • Does the conversion rate taper off at a certain level of seniority?
  • Should we voluntarily disclose our gender pay gap?
  • Can gender-focused programs that reflect a solid commitment to inclusion address any imbalance?

By knowing exactly the scale of the issue, you’re best-placed to go about addressing it in the right way. And it’s clear that exploiting your detailed payroll data is an excellent place to start in your commitment to ensuring the new world of work promotes diversity, inclusion, belonging and that pay is equal.


CloudPay’s global payroll platform can support your meaningful diversity goals with rich data about your people and powerful analytical capabilities. Learn more about how it can help you change the face of your organization for the better here.