In late December 2017, longtime E! News host Catt Sadler left the network because of what she described as an enormous pay gap between herself and her male counterpart, Jason Kennedy. On January 7th, BBC’s China editor Carrie Gracie — widely regarded as one of the best in her industry — resigned after she discovered that male staffers were earning 50 percent more than their female counterparts.
In both cases, the organizations claimed that the pay gaps between male and female employees were justified, but refused to provide additional rationale or data points to support their case. In this article, I’ll make the argument that these organizations have made serious communication blunders and missed out on a crucial opportunity to transform their organization and restore trust with their employees. I’ll also discuss why it is a business imperative for organizations to be proactive and get in front of the gender pay gap issue.It is a business imperative for organizations to be proactive and get in front of the gender pay gap issue.Click To Tweet
This month, the BBC’s China editor, Carrie Gracie, a 30-year veteran of the network, abruptly left her post and accused the network of perpetuating a gender pay gap. She wrote an open letter on her blog:
With great regret, I have left my post as China editor to speak out publicly on a crisis of trust at the BBC. On pay, the BBC is not living up to its stated values of trust, honesty and accountability. Salary disclosures the BBC was forced to make six months ago revealed not only unacceptably high pay for top presenters and managers but also an indefensible pay gap between men and women doing equal work. These revelations damaged the trust of BBC staff. For the first time, women saw hard evidence of what they’d long suspected, that they are not being valued equally.
Since 2010, the U.K. has had the Equality Act, which states that men and women doing equal work must receive equal pay. By April 2018, all UK firms with 250 or more employees are required by law to calculate and report any disparity in wage between male and female workers.
Because it was forced to do so, the BBC admitted that it was underpaying its women staff members in July 2017. When Gracie learned that the two male international editors earned at least 50 percent more than the two women in the same post, she raised a formal grievance with her bosses.
Gracie told her bosses that the only acceptable solution would be for all international editors to be paid the same amount. Instead, BBC offered her a big raise of 55,000 euro “which still remained short of equality.”
The BBC told Gracie that there were differences between roles which justified the pay gap, but it has refused to explain these differences.
In her open letter to the BBC audience, Gracie wrote that since turning down the unequal pay raise, she “has been subjected to a dismayingly incompetent and undermining grievance process which still has no outcome.”
Furthermore, the BBC senior leadership tried to keep other staff members from coalescing with Gracie. Reports on Twitter suggested that if any BBC staff publicly supported Carrie Gracie on social media or expressed an opinion about the BBC pay situation, they will no longer report or present on the topic of BBC pay. BBC leaders stated that the reason behind this measure was to maintain an editorial policy of impartiality. One Radio 4 host, Winifred Robinson, was taken off air for her tweet in support of Gracie.
Catt Saddler, E! News
As for Saddler, she explained in a post on her website last month that she was leaving E! After an executive at the network alerted her to the pay disparity. When she began contract negotiations last year, Sadler learned about the staggering wage gap: “[Jason] was making close to double my salary for the past several years.”
She continued, “How can I operate with integrity and stay on at the E if they’re not willing to pay me the same as him? Or at least come close? How can I accept an offer that shows they do not value my contribution and paralleled dedication all these years?”
In response, E! News published a statement defending the pay gap.
“Catt Sadler and Jason Kennedy had different roles and therefore different salaries,” Frances Berwick (the network chief) told press during a Television Critics Association panel. “Catt was focused on daytime. Jason Kennedy is on primetime evening news, plus red carpet. Our employees’ salaries are based on their roles and their expertise, regardless of gender.”
In an interview with The Hollywood Reporter published on January 10, Sadler disagreed with the network’s statement, saying it wasn’t about being underpaid but “about the gross disparity between two similarly situated equals at the network.”
“My experience, frustration and disparity was based on Jason Kennedy and myself being apples to apples,” she said. “We came to the network at the same time and did similar jobs… The only story I can tell is my truth and the truth speaks for itself.”
By leveraging such stonewalling tactics, the BBC and E! News have shattered the trust that had existed between the organizations and their employees. They’ve sent out the message that they don’t value transparency, accountability and honesty.
For companies that do have a gender pay gap, what’s a better path?
When it comes to addressing pay equity issues, Salesforce provides a stark contrast to the BBC and E! News.
Salesforce in 2015 decided to audit its employee pay to determine if gender pay gaps still existed among its employees. They discovered that gaps did exist and spent nearly $3 million in 2016 to eliminate statistical differences in pay.
In 2017, they increased the scope of their audit, evaluating salaries and bonuses globally, and looked at differences in pay by gender (globally) and race in the U.S. In 2017, 11 percent of its employees received adjustments and Salesforce spent around $3 million to address any unexplained differences in pay. The company also set up an equality award to recognize organizations who are making waves in promoting equality in the workplace.
By committing to advancing equality and evaluating its workforce on an ongoing basis to ensure equal pay, Salesforce has managed to create an enviable employer brand that helps to attract and retain the best talent. This has paid off in sustained high revenue growth. Third quarter 2017 revenue was $2.68 billion, an increase of 25 percent year over year.
Salesforce has been on Fortune’s 100 Best Companies to Work For list for nine years in a row and was ranked No. 8 on the list in 2017. An employee survey revealed that 96 percent of its employees are proud to tell others they work at Salesforce, and 92 percent of employees agree that people care about each other there.
At this point, research has shown that when companies commit to fostering diversity, they become more profitable. McKinsey has been examining diversity in the workplace since 2015. In a study of more than 350 large public companies, it found that those in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. And companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have above-median financial returns.
Although your organization may not be ready to disclose everyone’s salaries and give adjustments right away, there are some other steps you can take to foster an environment of openness and trust.
1. Determine how you can become more transparent with employees about pay
As much as you may want to defend your pay practices, employees won’t believe you if you can’t back it up with data. These days, employees have multiple salary data sources they can leverage to find out what they are worth. The best way to alleviate their concerns about fair pay is to use market data to make pay decisions and let your employees know your rationale.
PayScale surveyed more than 500,000 employees for its Employee Engagement research. We were surprised to discover that employee satisfaction is driven most by feeling that the approach to pay is fair and transparent at the organization, not how much someone is actually paid. In fact, we found that how people are paid relatively to the market matters little in terms of employee satisfaction. However, how employees feel about the organization’s pay philosophy and process has 5.4 times as much impact as their actual pay.How employees feel about the organization’s pay philosophy and process has 5.4 times as much impact as their actual pay.Click To Tweet
We also found that paying fairly matters a lot. Seventy-five percent of respondents who think they are paid at or above the market said they were satisfied with their job, compared to only 59 percent of workers who felt they are paid below the market rate.
In practice, this means that you’ll want to figure out what level of pay transparency is appropriate for your organization. If you’ve only shared with employees their own pay in the past, it may be helpful to start sharing the range for their job and how that was determined so they know how they can advance and earn more.
Or, if you already have a compensation plan and have been sharing the employees’ pay ranges with them, you might consider how you can start to connect the dots between your cultural values and compensation decisions. For example, if you celebrate that you’re a fast-paced organization, tell employees that you examine pay frequently.
2. Set requirements for female representation
Marc Benioff, Salesforce’s CEO, also requires that 30 percent of the attendees of every company meeting be women.
By setting a numerical target for gender (or racial) diversity, you can show employees and candidates that you are taking diversity seriously. At this point, at least 70+ companies have set gender diversity targets.
3. Institute fair parental leave policies
According to research, the gender pay gap tends to widen most sharply when people are in their late-20s to mid-30s. This is when many women have children. The big reason that having children hurts women’s pay relative to men’s is that the division of labor at home is still unequal, even when both spouses work full-time. Some women work less once they have children, but many don’t. Yet, employers pay those who work full-time less, too, perhaps because they assume they will be less committed.
To achieve greater pay quality, your organization can consider policies that benefit both genders. For example, companies could put less priority on long hours and face-to-face time, as well as provide paid parental leave and subsidized child care.
Tell Us What You Think
What is your company doing to close the gender pay gap? Let us know in the comments below.
Featured image: Lachlan Donald/Unsplash