Don’t blame women for the gender pay gap!

In the April 12, 2016 Ask The Headhunter Newsletter, the truth about equal pay rears its head.

When women get paid less for doing the same jobs men do, the real reason is obvious to any forthright business person, though it seems to elude the media, the experts, and even some women themselves: Employers pay women less because they can get away with it.

gender-pay-gapThe same pundits tell women that they should change their behavior if they want to be paid fairly for doing the same work as men. But the experts, researchers, advocates and apologists are all wrong. There is no prescription for underpaid women to get paid more, because it isn’t women’s behavior that’s the problem.

There is only one thing a woman should have to do to get paid as much as a man: her job.

When doing the job doesn’t pay, women of all ages should be aware that younger women today have the solution. According to a recent report from the International Consortium for Executive Development Research (ICEDR), some women have figured it out. Millennial women don’t need to change their negotiating, child-rearing, educational or any other behavior to impress errant employers. They know to quit and move on. This is going to change life at work as we know it.

The myths about women causing their own pay problem

Let’s look at what women are supposedly doing to abuse themselves financially.

We can refer to umpteen surveys and studies about gender pay disparity — and to some that suggest there is no disparity. But a recent Time magazine analysis summarizes the data from the U.S. Census and other sources: “Women earn less than men at every age range: 15% less at ages 22 to 25 and a staggering 38% less at ages 51 to 64.

This has become favorite fodder for the media — and for armchair economists and gender researchers and pundits looking to bang out a blog column. But I think most of the explanations about pay disparity, and the prescriptions for how to get equal pay for equal work, are bunk.

Depending on what you read, women get paid less because they:

  • Have kids.
  • Interrupt their careers for their families. (See: A stupid interview question to ask a woman.)
  • Don’t have the right education (e.g., STEM), so they can’t get good jobs.
  • Are nurturing, so they don’t negotiate hard enough for equal pay.
  • Don’t like to argue.
  • Lack confidence.
  • Let their men get away without doing household chores — so those men (if they’re managers) don’t know they should pay women fairly.

These explanations about lower pay are speculation and myth, but the message is always the same: If women would just change some or all of those behaviors, they can shrink the pay gap.

I say bunk. Women don’t cause the pay gap. Employers do. So employers should change their behavior.

The fact

I’ve been a headhunter for a long time. I’ve seen more job offers and observed more salary negotiations than you’ll see in a lifetime. I’ve observed more employers decide what salaries or wages to pay than I can count. And I am convinced the media and the experts are full of baloney about the pay gap between men and women. They are so caught up in producing eye-popping news that they’re doing women a disservice — and confusing speculation with facts.

Here are the facts:

  • Employers pay women less to do the same work as they pay men.

Well, there’s just one fact, and that’s it.

Women don’t make themselves job offers, do their own payroll, or sign their own paychecks. The gender pay disparity is all — all — on employers, because we start with a simple assumption: A job is worth $X to do it right, no matter who does it. It’s all about getting the work done. And the employer decides whom to hire and how much to pay.

Here’s the hard part for economists and experts to understand: Employers decide to pay women less, simply because they can get away with it. The law of parsimony instantly leads us to the obvious motive: Paying less saves companies money. Everything else is speculative claptrap.

A review of the bunk

Let’s look at some of the gratuitous “analysis” about why women are paid less than men. Look closely: It all delivers one absurd message: Women are the problem, so women should change their behavior.

Glassdoor, the oft-reviled “employer review” website, reports that overt discrimination may be part of the cause of gender pay discrepancies (Demystifying the Gender Pay Gap: Evidence from Glassdoor Salary Data). But, claims Glassdoor’s economist, Dr. Andrew Chamberlain, “occupation and industry sorting of men and women into systematically different jobs is the main cause.”

“Sorting?” Armchair apologist Chamberlain is saying women apply for jobs that pay less and men apply for jobs that pay more. While this may sometimes be true, what he fails to note is that when a man and a woman do the same job in the same industry, one is paid less because the employer pays her less. The absurd prescription for women: This will change if only women will change their behavior!

Then there’s the HuffPo, in which Wharton researcher Bobbi Thomason says that to fix the gender pay gap, “We need to have men getting involved at home with childcare and other domestic responsibilities.”

Gimme a break. Women, when you get men to wash dishes, you’ll change how boss men pay female employees. The prescription: It’s all up to you. Change your behavior at home.

The Exponent, reporting on Purdue University’s Equal Pay Day event on April 12, says that the wage gap is “largely based on the fact that, generally, women don’t negotiate their salary once they get into their career field.” Those women. Dopes. They’re doing the wrong thing — that’s why they get paid less! Change your behavior!

Kris Tupas, treasurer of the American Association of University Women chapter at Purdue, explains that employers pay women less “because our culture teaches women to be polite and accept what they’re given.” Again the prescription is for women: Change your behavior!

Linda Babcock, a professor at Carnegie-Mellon, wrote a book that explains women’s fundamental problem: Women Don’t Ask. Says Babcock’s book blurb:

“It turns out that whether they want higher salaries or more help at home, women often find it hard to ask. Sometimes they don’t know that change is possible — they don’t know that they can ask. Sometimes they fear that asking may damage a relationship. And sometimes they don’t ask because they’ve learned that society can react badly to women asserting their own needs and desires.”

Women get paid less because they don’t know they can ask! Gimme another break! And what’s Babcock’s prescription? Women — you have to ask to be paid fairly! Change your behavior!

Fox News’s Star Hughes-Gorup tells women how they can fix the pay gap: “Get educated.” If you want to make as much as the guy in the next cubicle who’s doing the same job, hey, get more schooling after the fact to impress your employer.

Next, says Hughes-Gorup, “Embrace asking for help.” Yep — if you learn how to ask properly, you can “start the conversation” about money. In time, you’ll be worth more. She sums it up: “I believe true progress will be made when we acknowledge that the real issue deterring women from talking about money is not confidence, but self-imposed limitations in our thinking.”

The prescription: Women: If you stop limiting your thinking, you’ll get paid more. So, get with it! Change your behavior and your thinking!

Disclosure: I can’t believe anyone buys any of this crap, much less that anyone else publishes it uncritically.

Millennial women have the solution

Why do all those articles prescribe that women must change their behavior to get paid more, when it’s employers who are making the decision to pay them less? Should women appease employers, or respond to unfair pay some other way?

Surveys over the years show that the top reasons people quit their jobs include (1) dissatisfaction with the boss, and (2) work-life balance. (E.g., Inc. magazine’s 5 Reasons Employees Leave Their Jobs.) Money is not the main reason.

But something has changed — especially for Millennial women. Lauren Noël, co-author of a report from the International Consortium for Executive Development Research (ICEDR), says, “Our research shows that the top reasons why [Millennial] women leave are not due to family issues. The top reasons are due to pay and career advancement.”

The report itself quotes women under thirty saying that the number one reason they quit is, “I have found a job that pays more elsewhere.”

What’s interesting is that the HR executives Noël surveyed don’t get it — HR thinks “that the top reason why women leave is family reasons.” Is it any wonder employers attribute lower pay to the “choices” women supposedly make?

The Millennial answer to lower pay

Millennial women are the generation that has figured out they’re not the problem. Unlike their older peers, they’ve figured out that when they’re not getting paid what they want, the answer is to quit and go work for an employer who will pay them more.

As a headhunter, I know first-hand that quitting is the surest way to take control when you’re underpaid and your employer will not countenance paying you fairly. I also realize that not all women — or men, for that matter — can afford to quit a job that is paying them unfairly. But that doesn’t change the answer that will most enduringly change how employers behave.

Kudos to women who take the initiative, and who don’t blame themselves or alter their own behavior when an employer’s behavior is the problem. I wonder how many employers have taken notice? Do they realize the generation of female workers that’s coming up the ranks isn’t going to tolerate financial abuse — they’re just going to walk?

payDo we need a law?

I’m not a fan of creating laws to dictate what people should be paid. But I’m not averse to regulations about transparency and disclosure. With some simple disclosure regulations, I think more women can start getting paid as much as men do for the same jobs.

Companies want our resumes; let’s have theirs, too — a standard “salary resume” provided to all job applicants, comparing pay for women and men at a company. Employers would be free to pay men twice what they pay women, if they want. And upon checking the salary disclosure, job seekers would be free to walk away and join a competitor who pays fairly for work done by anyone.

Let’s get over it: Women who do the same work as men aren’t the problem. Employers who pay unfairly are, and let’s face what’s obvious: They do it because they can get away with it. (For a story about an employer with integrity, see Smart Hiring: How a savvy manager finds great hires.)

If we’re going to analyze behavior, let’s analyze employers’ underhanded behaviors — not women’s personalities, cognitive styles, or biological characteristics. I’ll say it again — There is only one thing a woman should have to do to get paid as much as a man: her job.

we-pay-menEmployers who don’t pay fairly will stop getting away with it when they’re required to tattoo their salary statistics on their foreheads — so job applicants can run to their competitors. Or, more likely — since new laws aren’t likely — employers will change their errant behavior when a new generation of women just up and quits. That would be quite a news story.

Maybe then the media and the experts will stop blaming women for the gender pay gap — and start challenging employers to raise their standards.

(Considering quitting? See Parting Company: How to leave your job.)

What’s the solution? Do we need a walk-out? Do we need regulations? Do we need a corporate stock and pillory? Does anybody think there’s no gender pay gap?

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You’re The Headhunter!

In the December 1, 2015 Ask The Headhunter Newsletter, you are in control!

Step right up…

Every week, I answer your questions in the Ask The Headhunter e-mail newsletter, and then we adjourn here, where we discuss and hash out the issues and options behind the Q&A. I like to tell people that the advice, comments and insights you share on the blog are just as much a part of Ask The Headhunter as anything I write.

got-adviceThis week I want to try something different. Rather than me answering questions, I’d like to invite you to be The Headhunter — I’d like you to deliver the advice!

Please read the three short questions below, submitted by other readers, and put yourself in my shoes. What advice would you give these folks? What issues and options would you suggest these troubled readers focus on to solve their problems?

Then I’ll put myself in your shoes and add my comments, and we can all chew on it together. Maybe this will turn into a new feature — and we’ll be able to cover many more Q&As each week! (You should see the backlog in my e-mail folder!)

I’ve seeded each Q&A with some relevant resources to help you get started, but I’m counting on you to provide the real advice!

When you post your advice below, please indicate which question you’re responding to — A, B or C. Feel free to answer more than one! Please include links to any favorite Ask The Headhunter resources you think are relevant!


Question A

I sent my resume and cover letter in response to a job ad. The company says they’re interested, yet of course I have to fill out an online application. Does anyone really think I know the day I graduated school or left a job 20 years ago? Or my starting and ending salary? Worse yet — they want my GPA and my SAT score?

I put one trillion for the SAT score since it had to have a number. Of course, they also wanted a specific salary — not even a range. I left out my Social Security Number and I don’t care if it loses me the job — I am not throwing that information all over the Internet to every company that’s hiring for a job!

Is there any way around this when you can’t proceed without providing all this insane amount of detail?

What’s your reply?

You’re The Headhunter this week. Please post your advice to Question A!

Some References: Those pesky job application forms, Wanted: HR exec with the guts to not ask for your SSN.

 


Question B

My daughter was offered a job. Had to be drug tested. On the weekend she received an e-mail instructing her to report to orientation. She gave notice at her old job. Then she called with a question about where to report, and was told they didn’t mean to send her the notice of orientation because she flunked the drug test. Now she is going to be out of her old job without a new one. What can she do? She quit, thinking everything was okay.

What’s your reply?

Be The Headhunter this week. Please post your advice to Question B!

Reference: Pop Quiz: Can an employer take back a job offer?

 


Question C

I passed a phone interview and now I’m invited to “meet the team” at an upcoming technical conference. They haven’t offered to pay the registration fee and I, being unemployed, can’t afford it. I believe they are well-meaning but insensitive. I don’t want to embarrass myself by telling them my problem. How best to finesse this?

What’s your reply?

You’re The Headhunter this week. Please add your reply to Question C!

Reference: Why employers should pay to interview you.

 


This week, you’re The Headhunter! I hope you’ll take over and respond to the three questions above. (This is not a test! You’re hired to come back next week whether you participate or not! No SSN or salary history required!)

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2 Rules About Working for Start-Ups

In the July 21, 2015 Ask The Headhunter Newsletter, a reader is in a pickle — er, start-up — without a salary, and without protection on the upside or the downside.

Question

Your advice in the newsletters is brilliant. However, I haven’t seen you say much about start-ups. I’m in my 50s and enjoy the chaos of a new company. I have been doing it for nine months, and I love it. I am not getting paid, or receiving any benefits. The company has been getting exposure, and a few small projects, but no investment backing. That means no money. The CEO continues to tell the development team, the editors, and writers that “we are so close.”

bait-and-switchShe also mentioned they are moving to Silicon Valley, but will be using distributed-teams software to push more projects out.

The problem is that my budget and time are expanding. I am worried that my “job” will be lost by their move. I have only a handful of e-mails outlining the stock certificates, with promises of full-time employment when investors come through. However, I have nothing legal or tangible to suggest they are serious.

I’m ready to quit, but need some guidance. How do I approach her about my concerns without questioning her integrity? Should I suggest several options that have some legal teeth that protect me? So far I have all the risk while she continues to pump out projects. Thanks!

Nick’s Reply

There are two good reasons to work at a start-up:

Why work for a start-up?

One, you’re an owner with ironclad shares that cannot be diluted without your approval. If the company takes off, you’ll get your reward. If it doesn’t, you at least had a deal that protected your upside.

Two, you’re an employee being paid a fair (if not good) salary, and you’re expected to work hard over and above anything resembling “reasonable” — because you have some shares and stock options as a reward if the business takes off. Your salary protects your downside.

If you’re working at a start-up under other circumstances, I’m sorry to tell you that you’re probably a chump — unless you’re independently wealthy and love that kind of work.

I’ve got two rules for working at start-up companies.

Rule #1: Don’t get screwed

star-wars

I love start-ups. Been there, done that, had great experiences… except the time I got screwed because I had nothing in writing. When the founder decided to bring in other investors, my 250,000 shares were instantly diluted down to virtually nothing. (See Start-Up Stock: What’s it “sort of” worth?) The first rule when joining a start-up is don’t get screwed. Invest in legal and accounting advice to protect your up- and downside.

Let’s discuss how to handle your boss. You’re being naively nervous about offending a founder that you’re giving free work to. It’s time to make it legal.

I’d sit her down without any apologies and without hesitation in your voice.

How to Say It
“I’m excited about what we’re doing and I love the work. However, this is a business proposition — I’m working for free for equity and the promise of a full-time job. I think it’s time we put this in writing for our mutual protection.”

If she indicates any problem with that, then I think you’re being taken for a ride, and that you’ll be summarily dumped by the side of the road. She should be apologizing to you and extending every courtesy — you’ve been working for free with no written assurance of any reward!

You might want to talk with other “employees” to see how they feel — and to find out whether they have contracts. You all need them. You may want to speak with her as a group. But in my opinion this has already gone too far. You’d be pretty upset if she took advantage of all of you at this point — so don’t fret about having this discussion.

Rule #2: Don’t get screwed

Before you do that, I’d talk with an attorney. (See Employment Contracts: Everyone needs promise protection.) Equity deals and contracts with start-ups are complicated and fraught with risk. If it’s not worth the legal fee, then how can the promise of this job be worth anything? Please take this seriously.

The other issue is that if and when investors come in, your boss will have very little to say about your equity share. Investors don’t like seeing their shares diluted. You could wind up with very little, if anything, if you don’t have a solid contract now — and the right kind of shares.

I don’t mean to scare you, but I’ve seen this again and again. Even a well-intentioned founder can wind up hurting the team that poured its blood and sweat into the business. Working with no contract is totally imprudent and un-businesslike. I’d get to it asap. Did I caution you not to get screwed?

Don’t forget about IP (Intellectual Property) rights. Have you signed an NDA or NCA? Have you signed over any IP rights to anything you’ve developed? Your boss could be screwed, too, without these. It’s another reason you need a good employment lawyer.

Get compensated

My philosophy is, get value for value. Your work is valuable. Ask for salary, and ask for equity. I don’t think suggesting “several options that have some legal teeth” will help you unless you talk to a lawyer first. This is easy: Just tell her it’s time for a written, signed agreement — and stock certificates. Something tells me that’s when she’ll tell you you’re not part of the move — though I hope I’m wrong.

Before you quit, give your boss a chance to protect your investment in this business by compensating you fairly for the risk you’re taking. Get compensated. That’s not a rule; that’s good business. Do your best to prepare yourself in advance. These Ask The Headhunter PDF books will help you with your “boss”:

Fearless Job Hunting, Book 6: The Interview – Be The Profitable Hire. This works even when discussing salary with your current employer!

Fearless Job Hunting, Book 7: Win The Salary Games (long before you negotiate an offer), especially “The Pool-Man Strategy: How to ask for more money,” pp. 13-15. Sometimes it helps to ask casually!

Fearless Job Hunting, Book 8: Play Hardball With Employers, especially “Due Diligence: Don’t take a job without it,” pp. 23-25. This is a must when considering a job at a start-up, though this section applies to established companies, too.

Fearless Job Hunting, Book 9: Be The Master of Job Offers, especially “Non-Compete: Did I really agree to that?”, pp. 5-7.

There’s a lot more to start-ups, of course. (See Ben Slick’s excellent article, Evaluate a Start-Up Job Opportunity Like a Venture Capitalist.) If something I’ve said is helpful, I’m glad. I’d love to know what you decide to do and what comes of this. Thanks for your kind words about Ask The Headhunter!

For those considering the excitement of working at a start-up, if it’s what you really want to do, don’t be dissuaded by risk. As this reader points out, it can be an exciting experience. Just follow my two simple rules, and make sure you protect yourself on both the upside and the downside. I hope you get rich, but don’t end up losing your shirt.

(If you’re thinking about making the leap to starting your own start-up, learn more about Trading Your Job For Venture Funding.)

Have you ever worked for a start-up? How did it turn out? Did you protect yourself? (Did you get rich?) How would you advise this reader?

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Should I give equity to entice a new hire?

In the March 13, 2012 Ask The Headhunter Newsletter, the owner of a start-up business asks whether it’s smart to give equity to a new hire:

After years of frustration with the way many professional services firms treat their clients, I decided to launch my own business. I have had modest success in my first six months and I am considering adding an employee. The individual that I am interested in has expressed concern about the added risk of working for a small company. He wants me to give him an equity stake to offset the risk, but I don’t want to give away too much too early, considering the competitive nature of the marketplace and my own business vision. What would you recommend?

Here’s the short version of my advice:

(For the entire column, you need to subscribe to the free newsletter. Don’t miss another edition!)

My Advice

There are two kinds of people in your start-up world, other than clients: employees and investors. You can’t fill a job with an investor. You must fill it with an employee.

Now, I’m a big believer in sharing profits with good employees. And I think it’s a great idea to make employees owners to a reasonable extent, commensurate with their commitment to the business. That’s what profit-sharing plans are about.

But employees must earn their way into ownership of the business. It’s simply not good management practice to give away ownership of your company before you know what you’re getting in return. If this individual were bringing you new clients or some kind of intellectual property to enhance the value of your company, then and only then would I consider giving him equity from the outset.

If you hire an employee whose contributions become a true investment and a key part of your business, then at some point sharing some equity may be a key to your long-term success.

You can test this candidate’s motivations. Try this:

How to Say It
…(Sorry, this part is only in the newsletter… Don’t miss next week’s edition. Sign up now. It’s free!)…

…This person is clearly looking for security and potential riches without making a solid investment.

I’d find another candidate, or someone who wants to invest in your business as a partner. Take a look around: Even jobs with big, stable companies are risky. There is no such thing as job security.

In the future, I would look for candidates who want to add value to your business and to make you more successful — not ones that want you to protect them from risk. Talk about jobs and salary to potential employees. Talk about investment and risk to investors. But don’t confuse the two.

Does your company offer equity to new hires? Have you ever accepted equity to join a start-up? How did it work out? I’d like to hear what you have to say about the risks of start-ups — and the joys of taking risks!

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