Why Leadership Is at the Crux of Closing the Gender Pay Gap

The gender pay gap is no big secret. Here's why leaders should care, how they can recognize their own biases and what they can do to even the playing field.

learn more about Heidi Jannenga

By Heidi Jannenga

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Despite the many strides and contributions women have made as members of the U.S. workforce, they still receive a fraction of the pay their male counterparts do for performing the exact same jobs.

Related: 3 Simple and Essential Money Lessons for Women Entrepreneurs

Equal-pay activist Lilly Ledbetter once said in an interview with the Tory Burch Foundation, "When you speak about equal pay in this country, so many people on one side will tell you that it is a myth. It's not a myth, it's math."

Speaking of math: In 2017, the Pew Research Center published its analysis of median hourly earnings, which revealed that women were making 82 percent of what men earned. By these calculations, women would have to work 47 extra days each year to bring home the same paycheck as their Y-chromosome colleagues.

This disparity permeates virtually every industry -- even those dominated by women. In fact, my company recently conducted an industry-wide survey of rehab therapy professionals -- 69 percent of whom are women -- and our results confirmed this conjecture. And that's despite women now holding more rehab therapy leadership positions than ever before (our survey showed that women now out-represent men in all top-tier roles except the C-level). And yet, the salary bell curve still clearly favors male physical therapists.

In many ways, it seems like our economy should have already evolved well past the gender pay gap. After all, we (hopefully) know that gender doesn't determine talent, skill or aptitude. Yet, our financials haven't caught up to our ideals. And that's a problem -- a problem that has long-standing, detrimental consequences for our society and the competitive landscape.

But, as business leaders, I believe we have the power to enact meaningful change -- to eradicate the gender pay gap once and for all. However, we all must work together.

Related: How to Drive Concrete Change in a World Where Unequal Pay Is Still the Norm

Equal pay is good for business.

First off, let's put aside the purely ethical factors of equal pay for equal work and talk about the ROI of hiring gender-diverse teams and promoting women to leadership roles.

A quick review of the research uncovers a tremendous amount of data supporting the business benefits of providing equal professional opportunities for women. For example, according to researchers from the University of Sydney, a team's cognitive diversity -- or "the extent to which the group reflects differences in knowledge, including beliefs, preferences and perspectives" -- exponentially boosts an organization's competitive advantage. Indeed, greater diversity on a team inherently creates greater diversity in ideas, which supports innovation and creative problem-solving. It's natural to want to hire and do business with like-minded individuals, but when you partner with and hire people who bring different perspectives, beliefs and experiences to the table, there are tremendous growth opportunities and culture benefits to be had. We've experienced this first-hand within my own company.

And diversity cultivates more than innovation. In fact, women are proving to be the tour de force behind many of the most successful companies:

  • Companies with the largest number of female board members outperformed those with the fewest, reporting a 16 percent higher return on sales (ROS) and a 26 percent higher return on invested capital (ROIC), a Catalyst study revealed.
  • According to research by the Peterson Institute for International Economics examining almost 22,000 publicly traded companies in 91 countries, putting more women in top management positions resulted in a dramatic rise in corporate profitability.
  • Teams with fewer women report lower sales and profits than groups with a well-balanced mix of genders, a Harvard field study uncovered.

Related: 6 Steps We Can All Take to Narrow the Gender Pay Gap

Three tips for encouraging gender pay parity.

But while all these statistics are great, they don't necessarily translate to equal pay for equal work -- at least not yet. To experience the change we want to see, we must first get real about some of the biases we unknowingly hold when it comes to women in the workplace -- and how these biases shape our interactions.

Business leaders -- regardless of gender -- will need to analyze not only the salary data from their organizations, but also the professional development opportunities open to all employees (male and female) and how they're approaching job offers and salaries.

Furthermore, leaders need to explore their own personal prejudices, as these likely contribute to the pay gap. And yes, women in positions of influence, I'm also talking to you. As demonstrated by the fact that the salary gap is alive and well in female-led fields like mine, it's clear that influencers on both sides of the gender divide have some work to do.

If there are gender-based discrepancies in pay, training opportunities, and promotions, it's high time to ask yourself why. And if that's not something you want your company to stand for, then you better prepare to make some changes.

Here are three tips to get you started:

1. Let the data drive decisions: Whether you're making a decision regarding a performance review, promotion or salary change, base it on objective information. This may include financial data, performance data and peer-to-peer feedback, among other data points.

2. Create a comprehensive gender-equality plan: McKinsey & Company reports that 75 percent of CEOs place gender equality among their top 10 priorities. So why aren't the numbers moving more? Ask the leadership team at your organization to craft a "parity roadmap" that explores company metrics on salary and promotions, includes employee feedback and incorporates diversity insights from industry leaders. Then, chart your organization's pain points and create a plan of action.

3. Build inclusiveness from the ground up: Whether it's encouraging participation in internal or external mentorship groups or promoting a merit-based company culture that emphasizes openness and trust, it's crucial that employees at every level receive the same professional development opportunities from day one.

Related: Women Won't Achieve Equal Representation in Business Unless Men Help Change the Status Quo

Creating change for all requires action from all.

You might be wondering how -- if women-led industries like rehab therapy haven't closed the gender pay gap -- we'll ever achieve salary equality across the board. It starts with all of us making small, grassroots efforts within our organizations, communities and homes (especially if we have young ones). I encourage leaders -- both men and women -- at my organization, within my profession and across other industries to explore their own inherent biases and actively work to overcome them.

It's also worth noting that -- according to our aforementioned survey -- female students expect to make less money in their first job after graduation than male students expect to make. This trend aligns with salary expectations across the U.S. workforce, and it demonstrates the need for conversations about gender biases to start early, well before the next generation is ready to enter the workforce. As leaders -- and as teachers and role models -- we must become aware of the language we're using and the behaviors we're demonstrating to our young people to ensure we're not unintentionally propagating harmful biases.

It's up to us to not only own our value, but also teach our children, mentees and employees to own their value, too -- regardless of their gender. It's an internal shift that will create the external wave we need to break free of the gender pay gap once and for all.

Heidi Jannenga

Co-Founder and President of WebPT

Dr. Heidi Jannenga PT, DPT, ATC/L, is the co-founder and president of WebPT, a leading rehab therapy EMR platform for enhancing patient care and fueling business growth. She regularly speaks at technology, entrepreneurship and leadership events, and national PT industry conferences.

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