Salary History: Gender Pay Gap’s Holy Grail

Guest contribution by Katie Donovan

The saying “culture eats strategy over breakfast”, attributed to management guru Peter Drucker, has a place in the women’s pay gap issue. It seems as though much of the talk around eliminating the gender pay gap is aimed at changing culture. Examples from the recent Boston Closing the Wage Gap include recommendations of getting young girls to major in STEM and helping recruiters and hiring managers overcome biases. The Shriver Report: A Woman’s Nation Pushes Back from the Brink looks at women’s financial status encompasses but is not limited to the gender pay gap. This report does include similar types of recommendations such as putting college education ahead of having children to help the overall financial strength of women. These recommendations are admirable but slow. It’s been 50 years since the Equal Pay Act was signed and The Institute for Women’s Policy Research projects the pay gap will close in 2058 at the rate we have been making progress.

Instead of changing culture, is it possible to find solutions that will work regardless of the culture? To me, this is the Holy Grail. The existence of such a Holy Grail would reduce the 44 more years of inequality greatly. I propose there are. The primary Holy Grail is the use of salary history as a grading system and as a benchmark.

Headhunters have admitted in private to me that they never submit a candidate if their current pay is too low compared to the pay of the job they are filling. Let’s put this in perspective. I know of a woman who works in STEM with a doctorate and 10+ year of experience. A few years back she discovered she was making $30,000 less than her male colleague with the same title and less experience. This difference was inline with the industry gender wage gap. Assume, both this women and her male colleague apply to a job. Headhunters using pay as one of the grading criteria would never judge the person with $30,000 less on par with the higher paid colleague. The highly educated, experienced women in a well paid STEM job would never get out of the pile of resumes and get the chance to interview for her next job in STEM.

And it’s not just headhunters. Hiring managers think salary is a litmus test of how good a candidate is as well. A Harvard-educated female VP was being interviewed on the phone. As she was about to hang up the group of people in a conference room on the other end of the phone began to critique her candidacy. She muted the phone and listened. Who was she to give up this great opportunity if they did not hang up the conference room phone? Education stellar. Experience strong. Accomplishments good. Pay low. They kept coming back to her pay being 25% lower than expected. They must be missing a flaw. The pay gap in this industry was 30% so she was actually above expectations not that the gender pay gap came up in the discussions. Ultimately, the company passed on her because they determined her pay was telling them a different story than education, experience, accomplishments, and the interviews. Pay as criteria outweighed everything else.

In the two previous examples, salary history limited upward mobility in one’s career. Salary history also limits one’s future pay regardless of what level job you have or get. The decision to accept pay that is low once will forever impact future pay no matter what you do to better your income. Aileen Rizzo knows this only too well. Ms. Rizzo is a math consultant in Fresno County Office of Education and discovered that a new male colleague’s salary was $12,000 more than hers. This was not $12,000 more than her starting salary but more than her current salary after four years of additional experience and earning a second master’s degree. Her employer told Aileen that the difference was because starting pay was based on previous pay and thus non-discriminatory.

Yet, with women typically earning just 77 cents on the dollar to men should not the use of salary history to determine pay be considered discriminatory? I say YES. I say the time has come to remove salary history from the job application just as we have removed questions of religion, marital status, and age in the past to put all candidates on equal footing. What do you say?

Katie Donovan is a Salary Negotiation Expert at Equal Pay Negotiations LLC

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