It's Equal Pay Day today, the annual recognition of how much less women make then men for equivalent jobs. Essentially, it's a nod to the amount of time during the year women essentially work for nothing compared to what men make.
How you pay employees can be a big problem in any company. People often think they're underpaid, which leads to resentment and the potential for performance and retention issues. Such companies as JP Morgan Chase and Starbucks last year significantly raised their minimum pay.
But that's treating all employees the same, which would be fine if it were true. But women still get the short end of the stick, making 80 percent of what men make for equivalent jobs, according to common figures. Actually, it can be far worse, particularly for women who are well educated and in demanding jobs. The gap for physicians and surgeons is significant, with women making 62.2 percent of what men make. For personal financial advisors, it's 61.3 percent. And, in general, if a woman is also a minority, the lifetime wage gap can easily run $1 million.
It may be Equal Pay Day, a recognition of how much less women make than men, but the problem doesn't disappear, even in startups. Of course money is tight, but chances are good that at most women are paid less. (If startups didn't have the problem, they wouldn't develop it as they expanded over time.) There are three major reasons why any entrepreneur should examine any existing gender bias and address it. The short version -- it's going to pay off.
To look at your business as nothing but a way to make money is a mistake. Customers and employees often do care about how companies operate, and there's the issue of looking at yourself in the mirror. If you have to cover over your feelings in how you operate, it will be dispiriting, and trying to launch and sustain a venture is hard enough. Plus, treating people reasonably is the right thing to do.
It's good business
Pay equity provides great benefits. One is the greater ease of retaining help because female employees won't up and leave out of disgust, nor will males who are sympathetic to and supportive of gender parity. As word gets around, you'll find more qualified women -- great resources often treated badly by many of your competitors -- show interest in coming to work for you. There's the PR benefit of being a company that promotes gender pay equity because you stand out.
This is related to good business, but slightly different. There is much ill you can avoid by treating women reasonably and equally. Chances of facing discrimination lawsuits drop as does the potential for an investigation by regulators. So does the potential embarrassment of bad press on this front. You won't have female employees hiding anger and resentment and won't get into any uncomfortable "Why do you pay women less?" discussions, because you don't. Plus, checking pay equity and correcting it is much easier when your company is still young.