Closing The Gap

Female Quotient CEO Shelley Zalis says there are two things companies can do to help close the pay gap

Courtesy of The Female Quotient

Companies are under mounting pressure from politicians, regulators and activists to report and narrow gender pay gaps. Business leaders have responded by emphasizing their equity initiatives — from hiring and promoting more women at every level, to less-quantifiable efforts, such as shifting workplace culture.

But the firms that vow to narrow pay disparities aren't being held truly accountable, according to Shelley Zalis, founder of The Female Quotient, a company that works to advance workplace equality.

"Part of why we have this issue is there's no accountability," she said. "Inequality has been going on for so many years and adjustments need to be made."

In an interview with CNBC Make It, Zalis broke down two key ways she thinks companies can tackle workplace inequality:

No more salary secrecy

If companies continue to discourage employees from talking openly about pay and measure current compensation based on an employee's past salary, then firms will never close the wage gap, Zalis said.

"Salaries shouldn't be a secret," Zalis said, citing a Glassdoor study that shows 61 percent of women want employers to reveal salary, while only 38 percent of men want employers to disclose. "The study tells the whole story. It shouldn't be the employee's issue to resolve, but the corporation's responsibility."

It's illegal for private companies to prohibit employees from talking openly about compensation. But there are still obstacles that discourage employees from talking about pay. Companies can implicitly discourage or even punish employees from discussing money.

Research shows that employees are not only more productive when they talk openly about pay, but that wage transparency makes it much easier to target and combat pay discrimination. Disclosing compensation also makes it more difficult for companies to hide structural inequities that help the wage gap to persist.

"How great would it be if men supported women, and if everyone revealed their salaries? If salaries were visible, it would be a leadership issue a Fortune 500 company would be accountable for," Zalis said.

Some states have passed laws outlawing wage secrecy, and a few states have even banned employers from asking job candidates to disclose salary history, a question that often puts women and minorities at a disadvantage. In 2014, President Barack Obama signed an executive order that prohibited contractors from "retaliating" against employees who talk openly about pay.

These laws alone won't solve pay inequity, but it's a solid starting point for holding companies accountable for pay disparities, Zalis said.

Men should take parental leave

Care-giving responsibilities often fall disproportionately to women, which keeps them from moving up the ranks in their career and allows the pay gap to persist, Zalis said.

Women in middle management positions are more likely than men to leave the workforce to raise their children and care for family members, which means fewer women will fill leadership roles. While women and men start out in equal numbers in the workforce, only 6.4 percent of CEOs at fortune 500 companies are women.

Research suggests that when companies offer optional paternity leave, men will likely opt out for fear of career repercussions. One survey shows that while 66 percent of women take all their paid maternity leave, only 36 percent of men use their paternity leave.

Zalis suggested that companies should have mandatory paid leave policies for both men and women, to eliminate the stigma fathers may associate with taking time off.

"We need to work on re-writing the rules. There's a mother penalty," Zalis said, "but by creating a mandatory parental leave for both men and women, where parents take the same amount of time off — that would take that bias off the table."

When men take leave, women are able to return to work sooner and move more quickly into higher paying leadership roles, Zalis said. Research also shows that when women take longer maternity leaves, the rate of returning to work drops nearly 50 percent.

Zalis said that company leaders should make sure that the firm's parental leave policy is inclusive for everyone in the workforce. She cited Unilever, which was named one of the "Best Companies for Dads" by Working Mother magazine for offering "generous and inclusive" paid parental leave for men and women.

"At Unilever, if men don't take [paternity leave], the CEO calls them and asks why they didn't take it," she said. "What he's saying is that he wants nurturing, empathetic care-giving leaders, and doesn't not want people to take time with their families."

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Study: Pay gap expansion coincides with childbirth
Courtesy of The Female Quotient
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