Solving The Gender Pay Gap Through A Decentralized Talent Economy

January 17, 2020

While many admirable measures have been taken to bridge the gender pay gap around the world, “equal pay for equal work” will take time to become a reality. According to the World Economic Forum Global Gender Gap Report 2020, gender parity in economic opportunity and participation is only 57.8%. Put another way, it will take 257 years before the gender pay gap is closed.

As economies across the world undergo an era of polarized flux: With protectionist and expansionist policies implemented with equal force, what can corporations do to make the talent economy a fairer, more inclusive place?


An obvious solution is the decentralization of the talent economy, and this is already in practice. We find that the global gig economy, i.e. the community of skilled workers who opt to work as part-time or fulltime freelancers, has a 53% female representation, according to one source. In the UK, which reported 1.1 million gig economy workers in 2017, 31.1% were women. A healthier figure than its corporate equivalent: In 2019, only 6.6% of Fortune 500 companies had female CEOs.


Decentralizing The Talent Economy

There’s a reason for these numbers in the decentralized talent economy: Freelance work eliminates elementary hiring challenges that women are disproportionately affected by: Unconscious bias during screening interviews, where women receive the higher end of questions related to personal lives, marriage and family plans and even managing work-life balance. These questions in turn, feed into discriminatory compensation. The responses are used to justify paying women less for the same work as their male counterparts.


Decentralizing the talent economy breaks the many to one reporting ratio in the workplace. A freelancer is not dependent on one source of income. At any point he or she has more than one client or manager to vouch for performance and enable growth. Women aren’t required to tolerate discriminatory pay as the opportunity cost of related work perks such as the provision of a daycare center, or stable growth. Again, these are concerns that their male counterparts are considerably less encumbered by. It is also a worthwhile consideration for the other side: Employers who keep and groom male employee merely because men are unlikely to leave due to “personal reasons”, they’re in for an unpleasant surprise: Men switch jobs more frequently than women, and for reasons far more damaging to their employers


Freelance work doesn’t necessarily mean temporary work. It means reorganizing employment contracts to measure performance differently. For example, instead of assigning one project with one fixed deadline to one individual, it can mean distributing project modules into many employees, with assigned milestones and deadlines. The advantage of this non-sequential workflow is that productivity is independent and simultaneous, with less lag time. It also allows for the best, most specialized skills to come forward per team, as employees will generally volunteer for a module they are already adept at.


Another use case is: instead of having employees come and work at the office for 45 hours a week, for a quantified set of outcomes, hiring contracts can include clauses where the output may be the same, but where the number of onsite hours may be reduced to meetings and/or some additional hours depending on the nature of work. This has been proven to increase the productivity of women and men. For women responsible for the bulk of domestic responsibility, daycare and soccer practice, the savings in commute time, energy and cost can become a motivator factor in their performance. This will mean redefining performance by replacing meetings and workflow with milestones. Since people are paid not for hours but for milestones achieved, the incentive to get more work done in less time is win-win for employer and employee. This is an important measure in bridging the gender gap in pay as it gives disadvantaged groups more autonomy in choosing their work roles, more opportunity to explore and build their skillset, while simultaneously adding transparency to performance of all individuals.


Normalizing Remote Work

Is overtime a good measure of employee commitment? Not necessarily. One may in fact, argue the other way: Spending more workhours than necessary to complete an assigned task is a sign of inefficiency. For organizations such as startups—who are always trying to rationalize and contain costs, the cost difference between an efficient and inefficient employee makes a discernable difference to the balance sheet.


Unfortunately, the larger and more structured the organization, the harder it is to overcome the ‘overtime’ bias. Employees who leave on time are perceived as unserious, cold, unsociable, ‘not team players’ and so on. Even when the truth is that they spent all their work hours actually working. Again, working mothers tend to come into the fray more often, as they must rush out on time to start a second shift at home, this time of unpaid work.


By contrast, employees who pull out chunks from their workday for smoking breaks, snacking office gossip and onsite recreation are seen as friendly and approachable.  They benefit the most from grapevine politics and are best positioned to influence it. As opposed to the people who use the same time to work.  


If this is how workplace attitudes are defined to people who are remote after their work hours, how can we change them in favor of fulltime workdays away from the office?


The challenge here is to measure productivity against visibility. Decision makers can start by defining—in business terms—the importance of an employee’s physical visibility in the office. What kind of contribution does it make: Monetary? Cultural? Team building? How can it be measured?


Conversely, what is the cost of the same employee working remotely? Account for factors like data security and portability, the cost of overheads and office amenities, site security and so on.  While studies suggest that remote workers are economically advantageous for businesses, there isn’t enough data to suggest they are on the receiving line for promotions or high-growth positions.


The gender pay gap would narrow down considerably if all genders were awarded for actual productivity instead of perceived productivity.


From Clock-ins To Flexible Shifts

While knowledge workers have the advantage of physical autonomy, the same is not true for the global manufacturing workforce. Whether it’s in factories or warehouses, these people still need to be physically present in order to do their jobs.


Labor laws have been generally quite progressive in this regard: From HSE requirements, to limiting the number of hours worked, productivity isn’t as debatable in manufacturing as it is in services. But there’s a catch: What proportion of the global manufacturing workforce consists of women, or individuals of undisclosed gender? Closing the gender gap isn’t limited to improving hiring of underrepresented groups or paying them. It also extends to creating opportunities where they can compete fairly.


And this is where some labor laws act as double-edged swords. Shift schedules are designed to reflect the convenience of an all-male workforce. Mechanisms and resources to discourage harassment and gender-based safety incidents are inadequate.


In some economies, the law requires a minimum female representation figure before a woman can be allowed to work in those shifts, with added Catch-22 conditions such as the compulsory presence of female supervisors and so on. 


Secondments

Much has been already said about the difficulties—and economic disadvantage—women face when they return to the workforce, (after a career break). And the justification for this is often made via the missing talent pipeline, lack of succession planning etc. Global organizations that offer alternatives- like secondments—have a much more positive experience, and better success stories here. Secondments traditionally serve two purposes. They:


  1. Prepare high potential employees for bigger roles.
  2. Smoothen the temporary skill gap that occurs when an employee abruptly leaves the organization or leaves without a clear succession line.

So far, the popular practice has been to use secondments to fill in for a missing employee, who may be someone on maternity leave.


But what if it’s the other way around? What if a new parent was offered a secondment role when he/she wanted to rejoin the workforce? Even given that such roles don’t make any permanent commitments to the assignees, this can work out well for several reasons:



  1. – Bring the employee up to speed on latest practices, and potentially reskillfor a new role

  2. – Given the temporary nature of the role, the transition from full-time parenting to full-time work can be smoother, without the added pressure of bonuses or benefits affected by it

  3. – Provide timely international exposure. If the secondment requires relocation to unfamiliar markets, the candidate will simultaneously absorb life skills needed for adaptation, before growing domestic pressures, like children’s education etc come in the way. In many ways, this might be the best time for the employee to make long-term decisions that align his/her career with the employer’s goals and direction.


One should reiterate that these opportunities should be as sensitive to the challenges of paternity leave as they are to working mothers returning to the workforce.


Onsite Facilitation

Even in developing economies, regulation is veering progressively towards workplace inclusivity. In fact, in some countries, the absence of onsite daycare centers is a punishable offence. But onsite facilitation needs more. It’s not just about creating a safe space for employees’ children, but about facilitating mobile workers—the dominant cohort of the decentralized economy. How flexible are the payment plans that insurance companies offer freelancers and/or temporary workers? Is there enough research to identify what the real obstacles are between them and more frequent, lucrative opportunities?


This of course, is a strategic goal, but one which will likely overcome the gender gap in a lasting, purposeful way.


References:

https://www.weforum.org/reports/gender-gap-2020-report-100-years-pay-equality
https://fortune.com/2019/05/16/fortune-500-female-ceos/
https://www.fastcompany.com/3043455/why-are-more-women-than-men-freelancing

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