Slack, Match Lead Firms Pledging to Find and Close Gender Pay Gaps

(Bloomberg) -- Are women paid the same as men in your office? How about people of color compared with white people? If you work in the U.S., there’s a good chance you don’t know—and neither, to be honest, does your employer.

The only companies legally required to analyze their payroll to assess whether or how they may be contributing to racial or gender inequalities in pay are government contractors.  A few others do it anyway, whether out of some altruistic belief in fairness or in response to public pressure, but the vast majority of U.S. companies don’t bother.

To properly assess the sprawling salary data of thousands of employees gets expensive. Large businesses will usually hire an outside consultancy to do it for them, and even then, pay gap reports can take months to produce.

“Companies spend hundreds of thousands of dollars to get a 150-page report plopped on their desk that took six months to produce. That’s nuts,” says Maria Colacurcio, CEO of theSeattle analytics company Syndio. “This is something that could be automated so quickly.”

Last year, Syndio released a software program that would allow companies to analyze their pay data in a matter of minutes. It charges somewhere between $25,000 to $50,000 for an annual subscription to its software, depending on the size of the company using it. But all the software does is crunch the numbers and report the gap. It can’t actually force a company to do anything about it.

This week, Syndio went a step further. In collaboration with the National Women’s Law Center, the tech company released a set of pay equity standards and encouraged its clients to to pledge to follow them. So far 20 companies including Slack, which recently announced its plan to list shares on the New York Stock Exchange, personal finance site NerdWallet and dating company Match Group have agreed to do so. 

To comply, a company will have to ensure new hires’ starting salaries are consistent. It’ll have to measure both big, aggregate figures like median salary as well as smaller, job-to-job comparisons, across all departments. And it’ll have to list any groups or individuals, such as a highly paid CEO, that they exclude from their figures, along with an explanation.

This last requirement is one of the most important, Colacurcio says. She knows from previous jobs—she has worked for Starbucks and Microsoft—that companies often engineer their statistics by excluding their highest paid employees. “At companies I’ve been at, brand name companies, they will say, well, so-and-so is Senior Vice President of Brown Leaf Tracking in America—I just made that title up—and there is no female counterpart so we’re going to exclude that role. And they end up excluding 40 percent of their corporate headquarters.”

Another way companies manipulate pay gap numbers is by defining jobs so specifically they become difficult to compare. “You have to compare apples to apples,” says Emily Martin, vice president for education and workplace justice at the NWLC. “You can’t say Red Delicious shouldn’t be compared to Golden Delicious. They’re apples.”

Syndio also asks companies to assess pay gaps across different divisions. Colacurcio said a client, an advertising firm, discovered a serious pay discrepancy in its IT department but couldn’t determine its cause. The analysis ultimately revealed that newly hired men were starting at salaries significantly higher than existing female employees.

“You can say OK, it’s a hotter job market right now or whatever, but if you’re not compensating the people who have tenure and have been with you for years, you need to resolve that,” says Colacurcio.

One thing she hasn’t figured out how to do, though, is address the so-called motherhood penalty, in which women see their careers stall after they have kids. Colacurcio says the few years she took off to raise her six kids set her career back significantly.

Currently, Syndio’s software doesn’t account for time off like that but she hopes it will in the future. “People who take time off to be with young kids are still gaining skills,” she said. “You’re gaining emotional intelligence, how to mentor, so many things.”

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