Closing the Wage Gap is the Most Important Thing You Can Do For Recruitment — Here’s How to Do It

Man and woman at work


Profile Picture

With U.S. unemployment at a historic low, 77 percent of CEOs see the limited availability of skilled candidates as the biggest barrier to their business, according to research by PwC. In order to recruit and retain top talent in this “talent crisis,” salary and hiring practices must exceed the expectations of the best and brightest. One of those expectations? Equal pay. 

In 2017, women in the United States were paid 20 percent less than men on average, according to the Census Bureau. But the pay gap is even worse for women of color. Black women are paid 38 percent less, while Latina women are paid 47 percent less. This pay gap grows wider in higher-paying roles.

While it is sexist to pay women differently than men, it is also bad for business. According to a recent survey conducted by, almost a third of workers will not apply to a company with a known gender pay discrepancy. Only 16 percent of Americans think companies are doing enough to close the gender pay gap, and 60 percent attribute the gap to sexism or unconscious bias within an organization. 

In addition to thwarting recruitment efforts, a pay gap can also take a toll on employee retention. When employees believe they’re underpaid, they are more likely to search for other employment opportunities. Forbes reports that “a new hire might cost $4,129 and as many as 42 days in lost or compromised productivity.” Meanwhile, when employees are fairly compensated, they are more likely to display a higher level of commitment to their roles, more willing to exert extra effort, and they tend to perform better. 

Ensuring and leveraging equal pay within your organization doesn’t have to be difficult. Here are five ways organizations can make sure they’re paying their employees fairly. 

1. Conduct a pay audit.

The first step to paying your employees equally is understanding if inequality exists. According to McKinsey & Company’s 2018 Women in the Workplace report, only 26 percent of U.S. companies track differences in salary between women of color and other groups in comparable roles. That’s why examples of wide-scale salary audits are helpful guides to structuring a pay audit. One sterling example? The pay audit at Salesforce

Prompted by requests from key female executives, Salesforce CEO Marc Benioff stood up publicly and announced that Salesforce would put its reputation on the line by conducting an audit to determine if there was a pay gap at Salesforce. Even more extraordinary: when the findings showed that a pay gap did, indeed, exist, he didn’t miss a beat in putting a plan — with $3 million in funding — in place to resolve it. 

Cindy Robbins, EVP, Global Employee Success at Salesforce, was one of the major players in the Salesforce pay audit. In a discussion with Fairygodboss, she shared three tips for undertaking a similarly successful audit: developing a rigorous and objective process, being gender neutral and ensuring buy-in from the CEO. 

Like Salesforce, organizations looking to conduct a pay audit and increase employee buy-in should announce their audit and the metrics they are using to measure potential pay gaps. Then, they should publish the results and publicly establish a plan to address present gaps. 

To ensure pay gaps do not exist in the future, explicitly define how your organization decides on compensation for different roles. A Fairygodboss resource cites six ways to clarify your compensation structures, including designing and publishing a system or “rubric” for starting salaries and raises. That leads us to No. 2… 

2. Ensure an equal hiring process and starting salary.

Audit your hiring process to determine who you are hiring, why you are hiring them and how you compensate them off the bat. Compare beginning salaries of women and women of color against those within your organization, but also against industry standards. This is especially important in higher-paying or more specialized industries, where the pay gap tends to be wider. 

Robert Half, a leading global staffing firm, has published comprehensive salary guides for a variety of professional industries — from legal to creative and marketing. Each guide provides a salary table for a variety of roles in the industry. These tables break down average starting salary by experience and other factors, while also providing the tools to adjust salaries in your industry for geographic location. The industry guides also break down hiring trends, provide snapshots of benefits packages, and provide sample interview questions and on-boarding checklists. 

The Fairygodboss salary database is another free resource to cross-compare salaries within your organization to industry standards. This crowdsourced database provides otherwise hard-to-reach information from closed-book companies and organizations. 

To ensure equality in hiring and starting salaries, set a plan to address present gaps and publicize this plan with your employees. Ensure hiring managers are trained to understand the impact of gender bias and other unconscious bases on their decision-making, and put in place clear and consistent hiring criteria to reduce bias in the pre-interview and interview process. 

3. Provide equal opportunities for promotions.

McKinsey & Company found that women ask for promotions and raises just as often as men. However, they are still promoted more slowly — and they’re still paid less. This is likely the result of the fact that only 21 percent of U.S. companies set gender targets for promotions, and only 4 percent require unconscious bias training for employees involved in reviews.

Organizations seeking to reduce internal pay gaps must address gendered gaps in promotions. Fairygodboss research has found that men are more likely to promote men, which causes a problem in equal promotions when there are more men in senior positions than women. Audit reviews and promotion decisions regularly, and put in place a clear and consistent review system to reduce bias. Moreover, ensure women are receiving the same amount of feedback, high-profile assignments, and opportunities for mentorship and sponsorship as their male counterparts. This will allow them to receive the positive attention — and the championing voice — that is required for promotions and raises. 

4. Encourage women in your organization to negotiate.

According to McKinsey & Company, women who negotiate are more likely than men to receive feedback that they are “intimidating,” “too aggressive,” or “bossy.” Foster an environment where women negotiating is not only normal, but encouraged. Motivate managers to transparently discuss compensation expectations during performance reviews or when providing a job offer. Publish your promotion process, and make negotiations for every employee an established step in this process. 

Closing the wage gap is important to American talent — and it’s the right thing to do. There’s no better reason to get started today. 


Fairygodboss is proud to partner with Robert Half and Salesforce.