Notes

Why Earnings Equity is Critical to Diversity, Being Included and Belonging

We are now existing with the pandemic for nearly an entire 12 months. Lockdowns are no longer a novelty, and any assumptions we may have had about how the global pandemic would affect women have been resoundingly kicked to the gutter. When we were initially told to work remotely, my initial reaction was one of hope. If now both parents, and obviously then I am implying that households with two working adults, were not commuting, then surely this would recalibrate the house chores plus childcare responsibilities? That we might notice a shift as then each obtained those tasks upon themselves equally.

Well I was off-base.

The covid-19 era nowhere near becoming a adequate equalizer has pushed women not only out of the workforce but is also affecting them more significantly. As observed in payroll equity ’s document Women in the Workplace 2020, at year end of 2020, millions of mothers were considering leaving the workforce for good.

Elsewhere, a UK publication observed that mothers were 1.5 times more likely than fathers to have either lost their employment or resign since the lockdown began. Minorities and females of color are even more highly affected. The report observes that “compared with females overall, Latinas are more likely to be concerned about firings and furloughs. Additionally LGBTQ+ females are nearly twice as likely as employees overall to cite mental health as one of their biggest issues during the pandemic.”

One of the main issues for the dramatic employment loss numbers? McKinsey’s study found that women’s employment are 1.8 times more vulnerable to the crisis than men’s. One reason for this is that so many women are employed in verticals destroyed by covid-19. The hospitality sector employs more women than men.

It is not merely in the economic arena that females are suffering. Data from the UN reveals an increase in calls to domestic violence helplines across the planet.
Why pay equality is more critical than ever

Yet, there is another issue at work here. Frequently the primary reason the female is the person to give up her employment is purely economic. Who earns more earnings? When both parties are employed, it is common sense for the person with the higher earnings to remain in their employment and the other person to resign. Here is where the problem begins since, as we all are aware, the amount of pay inequality is astounding.

According to the most current information, in 2020, females earn merely $0.81 for every dollar a man was paid. The managed gender payroll gap, which ponders metrics like job title, years of experience, vertical, and location, found that women make $0.98 for every $1 a man earns. While inside this controlled data, the largest gap is between the pay of African American women and white males. As disclosed in the publication, black women are paid $0.97 for each dollar a white man with the same qualifications makes.

At first observation, this appears to show that the difference in earning power is relatively low when you compare like with like. Yet, it’s more nuanced than that, and that’s why it needs our attention. While men and women on the equal level may get similar compensation, the issue is that there is strong evidence that men get advanced at a quicker pace than women. The higher up the ladder the higher the salary, and there lies the challenge. That is why it’s not merely the salary that we should consider – by calculating presumptive raises given over a 40-year career, women will lose $900,000 on average over a career.

Research shows that when women have children it adversely affects their earning potential. The so-named “Motherhood Penalty” leads to employed mothers being seen as less devoted to their employment and needing a more flexible schedule. Statistics show that the pay gap is much higher for women with children.
How payroll analytics can enhance awareness about gaps at your business

While many issues contribute to pay inequities, one of the ways to address it is by identifying where the gaps are and then searching to bridge the void. Many companies are unaware that there exists is a difference. A part of the issue is lacking the data, a lack of knowledge about current pay scales. In a 2020 publication, we see that over half (56%) of those studied claimed their employers do not have an official process to address pay equity, whilst 70% don’t use payroll structures to manage payroll.

To battle this information gap, and as part of their offering for customers who operate in the UK, Immedis developed a standard report that plainly reveals the way a company pays its workers based on gender and age.

By measuring the issue, organizations could make informed decisions about how to change and get pay equity.
As well as the country by country analysis, Immedis also provide global comparisons for Gross and Net payroll.
Why it’s critical to study data

Aside from the fact that it is a lawful requirement in the U.K., there’s also the inherent bias we have for tangible evidence.
In closing, workers want proof. Without data and robust analyzing, it’s easy to assume that all is acceptable and that you are doing the right thing for your workers. From the information, organizations can get a better knowledge of how they are paying their employees and if there are any obvious differences, that can be addressed.



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