Despite progress in closing the gender pay gap, U.S. women still earn about 15% less than men on average, and at the current pace, full pay equity won’t occur until 2048, according to an Aug. 8 report from The Josh Bersin Co., a human capital advisory firm.
Even in managerial positions, women earn 10% less than their male counterparts for the same roles, and the disparity persists even at the executive level. This points to a crucial aspect of the pay equity issue — the gap isn’t solely due to some organizations hiring more women for traditionally “female” and historically lower-paid jobs, according to the report.
“Only 5% of companies currently excel at pay equity, with most still working to meet legal and compliance standards,” Josh Bersin, global industry analyst and CEO of The Josh Bersin Co., said in a statement. “This gap presents a significant opportunity to foster a more equitable environment, drive innovation, and achieve superior business results.”
In an analysis of 113 U.S. organizations’ pay policies, the gap appears to be narrowing, though slowly. Since 2017, the pay gap has dropped 3 percentage points from 18% to 15%. However, no progress has occurred since 2020, when the gap remained at 15%.
At the manager level, the gap is closing somewhat faster, dropping 4 percentage points from 14% to 10% during the past six years. It’ll take about 15 years to close the pay gap among managers, the report said.
Several factors could lead to pay equity sooner, the analysis found. For instance, the European Union’s forthcoming 2026 Pay Transparency legislation will require EU companies — and those that conduct significant business in the bloc — to record and share salary information, as well as take corrective action if their gender pay gap exceeds 5%. The law includes provisions to compensate victims of pay discrimination and imposes fines on employers who violate the new changes.
In addition, companies are realizing the bottom-line benefits of pay equity, the report found. Companies that have resolved gender pay equity issues have reported improvements in market performance, customer satisfaction, employee experience, innovation and retention. For instance, pay equity appears to be 13 times more important for employee retention and satisfaction than pay level alone, The Josh Bersin Co. reported.
Although more companies say they’re striving for pay equity and transparency, about 34% still don’t have a pay equity strategy in place, according to a beqom survey. More than half of compensation decision-makers said they doubt their company meets global standards, and 45% said their approach to pay equity hurts their ability to attract talent.
More than 70% of HR pros say women face discrimination in the labor market, according to a report from the Society for Human Resource Management. However, people managers often don’t receive formal training on pay equity or business-related pay decisions, the organization said.
Factoring all genders into pay equity discussions is also important, experts told HR Dive. Generally, these discussions focus on the gender pay gap between men and women but fail to consider those who identify as nonbinary or to address intersectionality. However, companies can take steps to be inclusive by collecting gender information through transparent and intentional ways at onboarding, as well as gathering anonymous data through engagement surveys.
