Women are crushing the gender pay gap

First, the bad news: In 2019, women earned $0.79 for every dollar earned by men, according to compensation website PayScale. Pay disparities are a greater issue among women of color, who earn $0.74 for every dollar earned by white men.

The good news is that this uncontrolled gender pay gap—the ratio of median earnings of all men compared to median earnings of all women—has decreased $0.05 since 2015.

However, PayScale's report, "The State of the Gender Pay Gap 2019," says that the findings not only indicate a disparity in pay for men and women, but also that there are barriers that keep women from holding as many high-level, high-paying jobs, or the "opportunity gap."

But some women entrepreneurs and business leaders are taking steps to make sure men and women have equal pay and equal opportunities within their companies.

Pay—the right way

Kristy Wallace, CEO of Ellevate, a network for professional women, has experienced pay inequity first-hand. "I have in my career had experiences where there was a pay gap with a peer," she says. From the beginning, Ellevate wanted to ensure equal and fair pay for men and women. To do so, the company dissected its organizational chart and reviewed the talent that would be needed.

They looked at the levels of the organizational chart, both at the time of the review and five years later. Then, they decided what "defined" those levels, or "bands," Wallace says. Factors such as years of experience, department responsibilities, managerial duties, and others were assigned to various levels within the organization.

Each job was given a pay range based on the value of the role to the organization, "if it's years of experience, department responsibilities, manager responsibilities. And then, within each band, we had pay ranges assigned to those bands. So, we really look to create a structure and a clear structure that we could use as a guide for all of those hiring decisions," Wallace says. Ellevate has roughly 30 employees, 90% of whom are women.

That's a much more equitable way of setting pay ranges than basing a new hire's salary on their previous salary, says Jennifer Brown, author of How to Be an Inclusive Leader and founder of diversity and inclusion consultancy Jennifer Brown Consulting in New York City. This approach has a two-fold advantage: By setting ranges, you eliminate the potential for past inflated or insufficient salaries to carry forward. And you also remove inadvertent disparities that happen because of the candidate's negotiating skills.

At Ellevate, employee benefits are also an area of focus. Wallace and her team regularly evaluate the benefits offered to employees and help ensure they're fair. Benefits—ranging from leave policies to perks—need to have clear and equitable parameters that comply with state and federal laws.

Hiring and development

Catherine Berman is the founder and CEO of Oakland, Calif.-based CNote, a platform that uses technology to facilitate investment in underserved areas of the U.S. From the start, Berman has had three rules of thumb for ensuring every aspect of the compensation process is fair, even before the prospect gets an offer:

1. Specific to compensation, be clear about the starting point and range.
2. Consider "hidden" strengths, such as grace under pressure and the ability to handle multiple deadlines.
3. Track compensation regularly so that disparities don't creep in.

This system has helped her support pay equity and ensures that advancement into more senior—and better-paying—roles is fair. The company has roughly 100 employees, of whom 60% are women, and 40% are men.

Brown says it's also important to ensure that professional development, mentoring, and other programs designed to advance workers' careers are fair. By helping ensure that women and men have the same opportunities for advancement, learn new skills, and have access to mentors equally, you can further guard against inequity as professionals move up the company ladder. It's best if companies document their policies in written form, such as in an employee handbook.

Also, organizations need to track employees' ratios being promoted, which can yield important insights about barriers to opportunity within the organization. "You need to be held accountable, whether it's by your board or your employees," Berman says. Revisit your policies regularly and make adjustments to promote equal pay and opportunities when you see them, she adds.