Gender Pay Equity: How HR Can Accelerate the Path. Sponsored by

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1 Gender Pay Equity: How HR Can Accelerate the Path Sponsored by

2 Gender pay equity: How HR can accelerate the path Dave Weisbeck Chief Strategy Officer Visier December 2016

3 Agenda Introduction Why Gender Equity Matters to the Business The Manager Divide: A Key New Finding How HR Can Accelerate the Path to Gender Equity Q&A

4 Fueling the Datafication of HR: Visier is how the best brands are saying goodbye to guesswork, and hello to insights

5 Visier Workforce Intelligence TALENT ACQUISITION ANALYTICS WORKFORCE ANALYTICS WORKFORCE PLANNING

6 Great companies consistently make the best decisions about what to do, how to do it, and why.

7 Exceptional companies know the best people decisions drive the best business outcomes Customers Profits Revenue Banks with greater employee retention achieve higher customer satisfaction. Retail outlets with highly engaged employees are more profitable. Companies with a more diverse workforce outperform others.

8 Why gender equity matters to the business

9 The benefits of gender diversity Business teams with an equal gender mix perform better than maledominated teams in terms of sales and profits. Harvard Kennedy School Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians. McKinsey The Impact of Gender Diversity on the Performance of Business Teams, Harvard Kennedy School, 2013 Why Diversity Matters, McKinsey, 2015

10 The topic most commonly related to Gender Equity? Pay Equity

11 JS1 The gender wage gap: A slow correction Women s earnings as a percent of Men s

12 Slide 11 JS1 Josie Sutcliffe, 11/4/2016

13 Since 1963: Equal Pay for Equal Work US Equal Pay Act Prohibits wage discrimination between men and women in same establishment who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions Pay differentials are permitted if based on seniority, merit, quantity/quality of production, or factor other than sex It is employer's burden to prove pay differential is valid

14 Pay discrimination: Risk to employers 19,724 charges under the Equal Pay Act since 1997 About 1,000 charges per year Companies face reputational and financial risk if charged

15 New in 2017/18: Pay Equity Reporting Changes Every year, employers with 100 or more employees need to fill in EEO 1 form New pay data would help enforce federal pay discrimination laws

16 HR has a key role to play to reduce risk How will you: Ensure you aren t blind sided by the results the first time you fill in the new report? Continuously monitor pay equity to see where the greatest risks are? Discover whether pay disparities exist for valid reasons? Get insights for how to address the risks?

17 If a company pays men and women equally for equal work, has it achieved gender equity?

18 Despite decades of tracking and research, publicly available benchmark data on gender equity is limited 1. BLS Reports, Women in the labor force: a databook, December 2015.

19 What is Visier Insights? Anonymized, standardized subset of aggregated Visier customer data

20 Equal pay for equal work alone will not close the wage gap

21 How do salaries for men and women differ by age?

22 When does the Gender Wage Gap occur? Average male salary by age Age 32 is the inflection point Average female salary by age

23 Why does this widening of the Gender Wage Gap occur? Is it generational? NO The wage gape narrows for older workers if generational, it should widen further

24 If it were generational, we would expect to see bias in promotions by age Visier Insights showed the overall average promotion rate in 2015 was 12.6 a rate that had no significant difference for men and women, across ages

25 So, we focused our lens on one type of promotion and found: A higher percent of men held manager positions than women Percent of men who are managers Percent of women who are managers

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27 The Manager Divide: A Key New Finding

28 Why does this matter? With managers* earning on average 2x the wages of non managers, the Manager Divide an underrepresentation of women in manager positions directly drives the gender wage gap. *Manager = Someone responsible for overseeing or directing the work of a group (or groups) of individuals

29 Closing the Manager Divide would reduce the gender wage gap Average male salary Average female salary if same % were managers and had equal pay Average female salary Average female salary if same % were managers

30 Note: The Manager Divide compares the percent of women who are managers and the percent of men who are managers The amount of men or women in the workforce, therefore, does not impact the calculation

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32 Why does the Manager Divide occur? The Manager Divide happens at the same time women are dropping out of the workforce

33 Why does the Manager Divide occur? Which overlaps with the childcare years

34 The Motherhood Penalty

35 Sweden: A Case Study in the Impact of Parental Leave on Pay 1970s Sweden changed maternity leave to parental leave available to mothers and fathers Parent on leave would receive most of full salary for first year The result Female employment rates and birth dates became highest in developed world

36 Sweden: A Case Study in the Impact of Parental Leave on Pay However: Share of fathers, who typically held the higher salary, taking parental leave stalled at 6% Until 1995: Daddy leave : a monetized incentive for fathers to take parental leave Percent of fathers taking leave soared to 80%

37 The results Each additional month that the father stays on parental leave increased the mother s earnings by 6.7% Fathers, on the other hand, did not experience any earnings impact from mothers taking parental leave Swedish Institute of Labor Market Policy Evaluation, 2010

38 How HR Can Accelerate the Path to Gender Equity

39 HR can most directly impact Gender Equity: Look to increase the female ratio at every stage in your hiring process especially for manager / leadership roles

40 Analyze your benefits plans and promote changes Do you have maternity and paternity leave? Support meaningful paid parental leave that is equal for both women and men and socially acceptable for both to take

41 Increase measurement of equity in rollout of HR policies

42 Increase measurement of equity in rollout of HR policies

43 Use workforce intelligence to discover pay equity issues Adapt programs and policies to achieve pay equity Use data to support validity of apparent pay disparities Confirm valid reasons for pay differentials such as longer tenure, more education, or higher performance

44 Pay Equity is only one layer: Diversity is another

45 Society: Other Considerations Support meaningful paid parental leave that is equal for both women and men and socially acceptable for both to take Support programs that increase the availability of good quality affordable childcare for all parents Ensure it is socially acceptable for both mothers and fathers to make use of flexible working time arrangements to care for children Develop and support long term programs aimed at removing the gender bias and social taboos associated with career choices

46 Download the report at Download your copy Subscribe to the Workforce Intelligence Blog

47 Thank you Dave Weisbeck

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