How Equal Wages Will Win the War for Talent

It feels as if we’ve been talking about closing the wage gap between the sexes for eons now. Women continue to battle for equal pay for equivalent position and performance, and are still met with lots of nodding heads but little seeming to be done. Well, not everyone is nodding their head without action: it seems that British Prime Minister David Cameron seems to want to do something about it.

The UK Telegraph recently reported that the PM has ordered larger companies (any business with over 250 staff) to divulge the wage disparities between their male and female employees. The Confederation of Business Industry is battling the case, citing that such reports would not actually shed a light on the subject, saying it would cause more confusion, requesting a voluntary approach.

Because we all know so many business leaders would volunteer such information on a regular basis, yes?

The article goes on to cite some of the arguments the Confederation cites for such disparities in pay, which can be attributed to “stereotypes,” which are said to deter women from seeking higher-paying careers as well as falling out of the higher pay grades or women stepping off the career ladder climb due to motherhood.

You can read more here. It’s an interesting piece, but it doesn’t really directly to the heart of the matter: paying for performance leads to more performance.

I’ve never quite understood a reluctance to pay for top talent. If capacity-driven success is what you desire, if you want accomplishments beyond your wildest understanding, then you must obtain and keep the best people in the industry suited to accomplish your goals. While there are many factors in the mix to accomplish this task, compensation is, quite simply, a large part of the equation.

Women comprise roughly over half of the labor force around the world, comprising 57% of the US Labor Market alone. In that labor market, they make 76.5% of what men make. The numbers around the world are about the same; it’s better in some places, worse in others. But the fact remains that over half the workforce is getting paid less than their counterparts. What does that say to hard-working employees who just happen to be female? That despite their best efforts that they’re worth less? It sets a precedent that causes one of two things to happen: unnecessary turnover or marginal performance.

In order to grow capacity for an organization, you need to have everyone working at full steam, completely focused on the task. Knowing that you’re being treated equally for performance ensures that everyone is squarely determined to complete the work at hand, and when they’re not, they talk. Rumors start, and that deters your talent from driving your business forward. Top performers compare notes and if they discover they’re not being treated fairly, they’ll most likely find another place where they think they have a better chance of getting paid what they deserve.

If companies were to divide the spoils more fairly, just think of what we could accomplish. Top talent deserves to be paid like top talent, regardless of stereotypes or having had a qualified life change on their benefits. If two people are top performers, pay them as such.

I wonder if this reporting will start the conversations that need to be had around paying for performance. It seems unnecessary that all the data is there, but resistance remains. If we could stop thinking of it as a historical gender based issue and focus on the common sense of the matter (that everyone deserves to be paid fairly and equally for a job well done,) then the gap could close and we could get on with the matter at hand: moving the global marketplace into one that only sees performance as the determining factor for compensation, not gender.

About the Author: Rita Trehan is the Founder and Principal of Rita Trehan, LLC, a change management and leadership advisory firm focused on corporate leadership, emerging technology, and cutting-edge organizational design. As a seasoned top executive that has successfully transformed organizations at the Fortune 200 and beyond, she has extensive experience working with CEOs and top corporate management on process and organizational improvement for maximum profitability. A soon-to-be published author, Rita regularly speaks at industry conferences around the world. You can contact Rita on twitter at @rita_trehan and connect with her via LinkedIn. Rita’s blog can be found at www.ritatrehan.com.