Thank you, Madam Chairperson and committee members, for the opportunity to provide input on such an important issue.
I'm Serena Fong, vice-president of government affairs. It is a distinct honour for me to be here representing Catalyst. Our goal as a non-profit organization is to help businesses around the world build workplaces where women and men of all backgrounds have equal opportunities to succeed.
I'll be focusing my remarks from the perspective of working with organizations to close the worldwide gender gaps in wages, leadership, and opportunity in the hopes of providing further context for your deliberations.
Our research, along with that of many others, shows that wage inequality starts early in most women's careers and worsens over time. In fact, Canadian high-potential women earned approximately $8,000 less than men in their first post-MBA job and were more likely than men to start at a lower-level position. Women are also offered fewer career-accelerating work experiences and international job postings. These missed opportunities significantly contribute to the gender wage gap. Clearly the pay gap is all too real, and unless we act now, it's not going anywhere.
There is some positive news about the gender wage gap. These days, unequal wages usually don't happen intentionally. Outright discrimination when it comes to wages in the workplace is not nearly as prevalent. Wage and other gender gaps exist due to systemic barriers and unconscious biases.
The majority of talent, recruitment, development, and management systems aren't designed to correct early inequities, nor will giving it time even the playing field for women and men. Only intentional actions by both the business community and the government will help close these gaps.
Pay transparency is one such action that can narrow the wage gap. It provides women with the information they need to better negotiate for fair and equal pay. Government mandates requiring companies to publicly disclose salaries and/or gaps between women and men's wages, such as the U.K. government's regulations and Australia's legislation requiring companies to report on the remuneration of their employees, are examples of ways to achieve pay transparency. Similarly, organizational policies disclosing exact wages, stock option data, salary bands, and pay levels have been found to be effective pay transparency methods.
Yet pay transparency alone won't close all the gaps or break down every barrier to workplace equality. Numerous studies show that when women negotiate for higher salaries, people react more negatively than they would to a man asking for more money. No-negotiation policies and a focus on paying for the work and not the potential can help combat these and other biases. For example, in the United States, the federal government's Office of Personnel Management, which is the government's HR department, recently issued a memo advising other agencies not to rely on salary history when determining compensation. Doing so could adversely affect a candidate who's returning to the workforce after an extended leave, or their existing salary may not be reflective of their qualifications or the market rate, perhaps due to systemic gender biases.
Organizations should conduct equal pay audits on an ongoing basis in order to identify and correct anomalies based on gender. Once the audit is done, they should bring in an external organization to verify the findings. Policies and actions like these benefit employers by providing companies with the tools and knowledge needed to set salary rates appropriately. They also aid job-seekers in determining whether they want to work for a particular organization and rightly take the onus off women, who are often blamed for earning less than men because they didn't negotiate.
Government policies mandating companies to report the types of actions they are taking to address the wage gap as well as explain why they may not have policies in place force companies to address the issue. They can also provide best practices for other organizations to implement. Furthermore, consequences for non-compliance should be robust and enforced in order to bring about actual change.
There are companies that are actively implementing some of these solutions. I'd like to share one example. Gap Inc. was the first Fortune 500 company in the United States to publicly disclose and validate that it pays women and men equally. The company's pay equality is a result of its long-standing commitment to inclusion. It emphasizes Gap Inc.’s intentional efforts to promote equality through its talent management processes with remarkable results.
In addition to reaching pay equality, between 2007 and 2015 women’s representation at the vice-president level increased globally from 44% to 49.7%. At the most senior leadership level—meaning those reporting to the CEO—women’s representation has gone from 33% to 77%, and out of the 10 women, four are women of colour. Notably, between 2010 and 2015 women’s representation on Gap Inc.’s board of directors increased from 10% to 36%.
These policies are ones that organizations can and should enact and that the government should encourage and adopt.
It’s also critical to gender equality to monitor and track progress toward goals and embed checks and balances within recruitment, retention, and advancement policies. Countries with a more holistic approach toward gender equality, including guaranteed non-gendered family leave, access to affordable child care, and legislated efforts to increase gender diversity in senior leadership, can be more successful in building inclusive workplaces that benefit women, men, and society.
Thank you for your attention. I look forward to your questions.