Preventing the Female Talent Drain: What Leaders Should Do to Achieve Pay Parity

by Pranav Ramesh
January 14, 2021
How leaders can ensure equal pay for employees


The US workforce is facing a serious problem with a mass exodus of its female employees. This poses a major setback for businesses across the nation as women make up about half of our human resources. The sudden drain of talent will not only reverse the progress female employees have made over the last decade but will also deprive employers of some of their most promising employees and cause businesses across the nation to lose out financially.

McKinsey and company point out that organizations perform better under diverse and inclusive leadership by promoting a sense of belonging in the employees. Companies that support gender diversity are more likely to get higher annual returns than their peers due to improved employee engagement, which facilitates innovation and efficient problem-solving. Additionally, unbiased HR policies and gender-neutral team cultures have proven to retain talent by boosting employee morale and satisfaction.

In 2020, the United Nations observed September 18th as the International Equal Pay Day for the very first time. But in the same month, it was noted that hundreds of thousands of women either dropped out of the workforce or were laid off in the aftermath of the COVID-19 crisis.

According to Stefania Albanesi, an economics professor at the University of Pittsburgh, though the nation’s unemployment rate dropped to 7.9% in September—an improvement compared to the 15% in April—a significant share of this drop was due to people exiting the job markets altogether, as opposed to economic growth.

Of the employees who dropped out, the majority of them were women. About 800,000 women aged 20 and above quit their jobs (including 58,000 African American women and 324,000 Latinas) as opposed to the 216,000 men who did the same.

Why would women willingly opt-out of their jobs amidst the largest economic crisis of the century? The answer is unfortunately simple; the pay is not worth it. Women have been earning less than men ever since they joined the workforce, with the current global gender pay gap estimated at 23%.

Throughout 2020, we came across numerous studies that point out how women are overworked and underpaid as they try to juggle households and full-time jobs. Many working mothers are considering downshifting or resigning because they are not supported or compensated enough for the effort they put in.

Businesses need to address this head-on. Here’s what leaders need to know and do to correct the persistent gender gap that is robbing businesses of talent, growth, and employee engagement:

The Existing Gender Pay Gap: The Figures to Take Note Of

Women who work full-time in the US only earn about 82 cents to every dollar earned by a male co-worker. Globally, women make only 77 cents to every dollar paid to a man. For women of color, working mothers, single mothers, and immigrant women, the gap is even bigger.

Though women are on par, and in many cases, surpass men in higher education, the gender pay gap affects them throughout their lives:

  • Since they are paid less, they have a harder time repaying student loans.
  • Due to lower lifetime earnings, women receive less in pensions and social security.
  • Their retirement income will only be 70% of what their male counterparts will have.

Given these stark disparities, if we calculate a woman’s income over a 40-year tenure, keeping in mind the presumptive raises, they lose about $900,000 on average in a lifetime.

The Effect of COVID-19: The Escalated Pay Gap

To further exacerbate these discrepancies, the pandemic has pushed millions towards extreme financial hardship. 96 million people could experience poverty in 2021 alone, which would mean, the number of girls and women surviving on $1.90 per day will escalate to 435 million.

Here’s how the effect of the pandemic has escalated the gender pay gap:

  • Burnout: Though some companies have taken steps to support their employees while working from home by providing tools and systems, and extending counseling services, very few firms have taken specific steps to curb employee burnout. Working from home is truly a challenge for parents and caregivers as they have to meet their employers’ expectations and fulfill their personal duties too, which can be done only by working longer hours or cutting corners on the personal front.
  • Compromise: Remote work poses a problem for working mothers in particular. Despite decades of effort to discard gender roles, women continue to be the primary caregivers in most households. This means, on top of working full-time or doing overtime, women have to juggle housework and childcare too. According to the Women in Workplace 2020 survey by McKinsey and Company, one in three working mothers have considered leaving their jobs or downshifting their duties to be more involved with their families.
    • Prejudice: On a different tangent, women in senior levels are expected to invest as much as the male leaders, maybe even more, despite wearing multiple hats at home and at work. Unfortunately, despite putting in the extra effort and balancing multiple roles, women continually remain underpaid and overworked.

The Root Cause: Why Women Are Paid Less

Let’s trace the root cause that leads to a lack of pay parity. While taking maternity leave and opting for underpaid flexible hours for childcare are contributing factors, they are not the predominant cause, unlike centuries of obvious and underlying prejudice within the society and the workforce.

While these societal biases are not perfectly measurable, they certainly contribute to the gender pay gap in various ways:

      • Misconceptions that women are less capable
      • Common assumptions about how a woman might compromise her career after childbirth or that married women need not earn more as their partners are already earning
      • Stereotypes about women in leadership roles like “bossy” or “difficult to work with”
      • The increased criticism women leaders face forces them to work twice as hard as their peers in order to feel accepted

The childbearing penalty or the Motherhood penalty is another ironic factor that lays the base for the gender pay gap. A survey conducted by Cornell University came to the conclusion that working mothers face a substantial wage penalty for the sole reason that they have added responsibilities, whereas working fathers are often rewarded for the same. Employers tend to assume that mothers will be less committed to their jobs as their “top priority” in caregiving.

Another survey done in 2014 backs up the existence of a motherhood penalty with the conclusion that only 23% of women were allowed to work from home compared to 36% of men during the pre-COVID era. Employers tend to assume that women want the flexibility to care for their children, no matter what the actual reason is. Also, “high-profile” male employees are deemed to be more fit for flexible hours so they can climb further up the career ladder.

Though remote working is an option for everyone at the moment, unless more men start getting involved in childcare and housework, the stigma and the responsibilities of childcare will continue to hold women back.

The Global Progress: 99 More Years to Go

Though we have not witnessed progress by leaps and bounds since the time the Equal Pay Act was signed over 50 years ago, there have been some positive shifts across the world. Nordic countries have been the frontrunners of bridging the gender gap for more than a decade now. While Iceland leads by bridging 88% of the gender gap, its neighbors Sweden, Finland, and Norway are nearly on par as well. The US is currently at 53 in the ranking.

Though the global gender gap, measured across four subindexes—education, health, politics, and work —has narrowed slightly to 68.8% since the last edition of the Global Gender Gap Index, there continues to be a 31.4% average gender disparity across the globe.

Given the current pace of progression, experts are of the opinion that it will take another 99.5 years for the gender gap to disappear completely.

The Boston Gender Pay Booster: Change is Closer than you Think

Boston has been a frontrunner in trying to bridge the gender pay gap by empowering its female employees. Since 2016, the city has teamed up with the American Association of University Women (AAUW) to provide free salary negotiation workshops for all working women.

So far, more than 7000 women have been trained to determine their value, choose their target salary and perks, and perfect their negotiation strategy to land their dream job. This is indeed quite a promising project and can be expanded across the nation in the foreseeable future.

Building a Fair Workforce: What Business Leaders Can Do

If the business leaders decide to take matters into their own hands, we will not have to wait another century to achieve full pay parity between male and female employees. The most effective way leaders can make a difference is by making sure that more women are on their boards. According to McKinsey and Company:

      • Only 85 women are promoted to manager for every 100 men. This gap is greater for African American and Latino women—only 58 and 71 women are promoted respectively for every 100 men.
      • Though the representation of women in senior-vice-president roles has risen from 23% to 28% and the C-suite representation has surged from 17% to 21% in the US, women largely remain underrepresented when it comes to leadership.

Simona Rollinson, the CTO of ISACA is of the opinion that change needs to start with boards. “The more women are on boards, the more women in senior leadership roles, and the more likely we are going to be able to make sure that women stay in the workforce”, she says.

Female leaders will be more capable of identifying and addressing the hurdles faced by other women in their team, rather than forcing them to compromise better pay or career opportunities.

Here are a few other steps leaders can adopt to ensure gender pay parity in their organization:

      • Promote Equal Pay for Equal Work: Ensure that every employee with the same skillset and qualifications is compensated equally for the same role, regardless of their gender, race, or personal responsibilities. Here how to execute this:
      • Showcase pay transparency by publishing gender pay gap data publicly.
      • Follow a blind recruitment policy and stick to gender-neutral job descriptions.
      • Educate employees about self-assessment tools that will help them determine if they are underpaid.
      • Certify the firm as an Equal-pay organization.
      • Adopt minimum wage policies that include equal pay clauses.
      • Educate employees and managers on the importance of gender equality.
      • Conduct regular workplace monitoring to address discrimination and prejudice.
      • Re-evaluate guidelines and policies for salaries and evaluation.
      • Allow Employees to Share Salary Information: Though publishing one’s salary isn’t illegal as per the Department of Labor, it is often frowned upon by bosses. Allowing employees to share salary details with each other and on the internet will keep them cognizant about where they stand among their peers.
      • Share the Load: As long as women continue to play a bigger role in housework and childcare, they will also continue to take a backseat in their careers. The only way to resolve this is by partners actually splitting the workload and responsibilities. The change should start not just from boards, but also from home.
      • Base the Pay on Skills, not The Resume: One of the main reasons why women end up with a lower wage is because they pause their careers for childbirth and childcare. Once they are ready to get back in the game, the break they took causes a gap in their resume, leading them to settle for underpaid jobs. Never let this factor cloud your judgment when hiring female candidates.
      • Promote Diversity and Inclusion: Stop planning and start doing. The President of Ariel Investments, Melody Hobson says that the attempt for diversity is still in limbo. Leaders need to take that leap of faith and execute the policies right away. They can always be revisited and tweaked based on the team’s requirements. Here’s how companies can benefit from establishing a diverse and inclusive team as well as leadership:
      • McKinsey and Company state that companies perform better when they have diverse leaderships.
      • Companies that are in the top 25% for gender diversity are 15% more likely to be more profitable than their peers as diversity is key to quick decision-making, better assessment of client requirements, and effective problem-solving.
      • According to Forbes, about 61% of female candidates make a conscious choice to join organizations that support gender diversity and inclusivity.
      • 93% of female employees who work in companies with gender parity also report the highest job satisfaction and employee engagement, which in turn leads to improved productivity and better commitment to the organization.
      • According to Catalyst, companies that support gender equality and sound HR policies tend to have better employee retention.
      • Diversity and inclusion are also closely connected to innovation. Companies report a 59.1% increase in creativity and innovation when the employees feel included and trusted.


When coming up with an action plan for gender pay parity, leaders should keep in mind that there is no one-size-fits-all solution. Nor can a single change flatten the curve. But even the smallest initiatives can start the progress and improve retention of female employees in your organization—imagine the difference this could make on company culture, morale, engagement, and profitability if every leader embraced this idea.

The gender pay gap will continue to exist in our systems until leaders decide to take a deliberate stance against it. It will be a rewarding change for all businesses —the changes you make today are going to transform your teams, your leaders, your bottom line, and the lives of millions of women in the future.

Together, let’s strive, not just for an equal workforce, but for an equal world too.

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About the Company:

Peterson Technology Partners (PTP) has partnered with some of the biggest Fortune brands to offer excellence of service and best-in-class team building for the last 25 years. 

PTP’s diverse and global team of recruiting, consulting, and project development experts specialize in a variety of IT competencies which include:  

  • Cybersecurity  
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Peterson Technology Partners is an equal opportunities employer. As an industry leader in IT consulting and recruitment, specializing in diversity hiring, we aim to help our clients build equitable workplaces.

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