The gender pay gap is no small matter for small businesses

The gender pay gap isn’t a new issue by any means. The number varies, but the significant gap between salaries continues to exist in many occupations.

It would seem that the gender pay issue would be something only larger corporations get accused of. Larger corporations appear to have a lot of layers and the experience to hide pay disparities. But large corporations aren’t necessarily the biggest violator when it comes to pay disparity.

As it turns out, small businesses are where there tends to be more of a struggle for women to get the same pay as their male counterparts.

How did this happen?

The good news is that it typically isn’t intentional. Most small business owners aren’t trying to short-change women. They are merely trying to run their business using the practices they know. Even if those practices are, unknowingly, perpetuating the problem.

Lack of transparency

While pay transparency is a significant factor in the pay gap as a whole, it is especially prevalent in small businesses. A recent study found that only 13 percent of small businesses are transparent regarding pay. When employees know what their co-workers are making, employers are more likely to make things equal. Pay inequality in a transparent environment creates a situation where employers have to defend what employees are earning.

Unaware of practices that perpetuate the gap

It used to be a fairly standard question. “How much did you make at your last job?” It was a way to give employers an idea of where to start salary negotiations. But as hiring practices are watched more closely to try to close the pay gap, this common question has come under scrutiny.

If an employee is coming from a position where there was a pay disparity, starting at their last salary only helps perpetuate that disparity.

Making a positive change

The best things employers can do to decrease the pay gap is to be more transparent with employee pay. That also means being prepared to defend any disparity between men’s and women’s salaries. Employers can also look to third-party and regional data to start pay negotiations for employees, rather than with an employee’s last salary.

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