The Retail Industry’s Gender Pay Gap Problem
When it comes to the success of your company, your people are your most important asset. Creating a culture of trust and transparency within an organization, especially when it comes to pay equity, is crucial. While the issue of pay inequity spans all industries, it's an issue that’s especially evident in the retail industry, which has one of the largest pay gaps.
While retail employees overwhelmingly care about pay equity and heavily support pay equity efforts, they're less positive about the actions taken by their own employers to solve the pay gap. A recent survey reported less than half of retail workers believe their manager takes closing the gender pay gap seriously. What can employers do to omit gender pay gaps from their workforce and satisfy employees? Here are three key steps retail industry leaders can take today:
1. Meet employee demands for pay gap transparency or risk losing top talent.
Employees desire an equal workplace where they're treated fairly based on their capabilities, performance and skillset, not their race, age or gender. What’s more, employees want to work for a brand or company that acknowledges pay gaps and discloses discrepancies instead of hiding behind them. In fact, nearly three in four women say they would be more willing to work for a company that discloses its gender pay gap figures each year, highlighting the importance of being transparent.
While organizations may believe they're taking the necessary steps to close the gender pay gap, retail employees don't see it this way. More than one in five retail workers say they're not aware of any steps or actions their employer is taking to close or prevent gender pay gaps. Retailers must do more to communicate clearly and frequently with employees and the public about their efforts in closing pay gaps.
2. Act now to avoid consequences in turnover and recruiting.
In a recent survey, 49 percent of women said the presence of a gender pay gap is a deal breaker for whether they would be interested in working at a company. Add in nearly the lowest U.S. unemployment rate in nearly 50 years, and these employees can easily be picky when it comes to where they work.
For current employees, retailers that fail to act could be hit with major costs in terms of employee turnover. In fact, employee turnover can cost organizations up to 213 percent of the lost employee’s salary. When we consider that 40 percent of women report they would quit their job over pay inequality, retailers may be facing unnecessary — and easily avoidable — costs.
3. Leverage technology to help close the pay gap.
Retail is ranked as the most diverse industry, which makes removing bias in compensation decisions especially critical. And when it comes to removing human bias, artificial intelligence (AI)-powered technology may be the answer because it allows retailers to avoid viewpoints that stem from inherent biases. Technology can also promote pay equality by integrating internal compensation data with industry benchmarks, measuring what matters like experience, education and performance, while omitting factors like gender, age and race.
AI-powered compensation solutions are key to meeting employee demands in a competitive hiring environment as well as for retaining top talent. Employers can feel confident they're enacting unbiased compensation decisions, and employees can feel assured their employers are rewarding them fairly and making pay equity a priority.
Tanya Jansen is the co-founder of beqom, a global provider of compensation management software, delivered using a cloud computing platform.
