This story is part of Fast Company’s Gender Pay Gap package “Short Changed.” In honor of Equal Pay Day, the symbolic day that women have to work for free to match men’s earnings, we exploring elements of pay inequality though the personal stories of the women across industries and career stage who experience it every day. Click Here to read the whole series.
Some people categorically dismiss the gender wage gap as fake news, but several companies recently discovered it did indeed exist–right within their own workforces.
Among the best-known cases of these is Salesforce. With an employee base of some 30,000 people in 2015, discovering and fixing the problem was a major investment. CEO Marc Benioff spent $3 million that year to correct the discrepancy. In 2017, Benioff would put in additional $3 million to correct compensation differences by gender, race, and ethnicity throughout the workforce.
Before Salesforce was making headlines for achieving pay parity, CEO Christopher Cabrera of Xactly, a cloud-based sales compensation and incentive software provider, surfaced a similar discrepancy in his staff of around 300 people.
Using aggregated and anonymously analyzed sales performance data across its customer base, Xactly was able to pinpoint pay discrepancies between men and women.
Pay levels for most of the roles in the company are determined by the individual’s years of experience. When jobs involve more complex responsibilities, Cabrera says education, experience, and professional background are factored in.
At that time, the results of the audit indicated that some female salespeople met their quotas 3% more often than their male counterparts but were being paid less, and a small number of reps–both male and female–were being paid unfairly.
It’s been four years since the original audit. How has the company (now with more than 600 employees) fared? The company is now privately held so they don’t release numbers. Here is what he told us in his own words (edited and condensed for clarity):
“When we spoke last time, the big thing that was happening for me personally was that my daughter was just graduating from college. So there was a lot of discussion around the gender pay gap (that she might face).
I’d like to think it would have been on my radar even if I didn’t have a daughter. I think that was maybe just the catalyst that made it more poignant to me.
If that’s what it takes, I don’t think that’s a bad thing, and I think it can help even the men that don’t have daughters to sort of wake up to it. I just think shining a bright light on it and showing the data, doing these kinds of exercises, those are the things that change people’s minds, whether they have daughters or not.
We pay the same regardless of whether it’s men or women. We pay for the job, which is basically our approach to all jobs, but we don’t show everybody all the [salary] numbers. I think pay transparency creates more issues than it solves. Let’s face it, not everyone’s paid equally job by job, and that’s defensible if it’s for the right reasons.
We never asked for salary histories when hiring so the legislation really didn’t affect us that much.
Within job levels, men and women should be paid the same, so it was just a matter of time before we said, ‘Gee, why don’t we dispel this myth, or prove that it’s true that women are paid differently than men.’
As soon as we did that and started having this massive data set tell us that it was true, the natural next step was, obviously, to look at that internally at our own business.
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So we embarked on a process internally to look at all of our pay. It was kind of interesting because we expected to analyze our sales team and find that we were paying equally. We found that we were not, and we were pretty shocked by that.
What I thought was interesting is it spoke to how sometimes this happens and it’s not intentional. It’s not that people are going around saying, “I’m going to pay women less than men,” but it does happen, and we had to fix it.
We had a couple of employees who we had to give raises to, and we actually had one person who was being overpaid relative to her peers, and so we ended up having to have a tough conversation and get her pay back in line.
The amounts, as I recall them, were $5,000 to $10,000 that we were underpaying a couple of women, and one woman who was getting paid $5,000 to $10,000 more than the male counterpart. Those are people that’d probably have a [total salary] of $100,000 or somewhere in that range. It’s maybe a 5% to 10% [discrepancy] not 20% [which is the average gender wage gap].
Every year since that first year we do the same study, and I’m happy to report that because we’re much more in tune to it internally we don’t haven’t had the issue come up again.
But we’ve been doing a lot of work with our data sets across our customers, and hundreds and hundreds of companies with hundreds of thousands of salespeople to see if it’s happening out there in the wild and, of course, it is.
We’re much more maniacal about making sure that we don’t kind of wander off, so we haven’t had to go back and make changes.
But we’ve also done things like [hire more diverse candidates]. The head of our enterprise sales is a woman. She’s awesome and powerful and she’s a great example for the younger women that we have in the organization, and so she helps lead the charge to make sure that women are getting promoted and women are getting paid the same, and that we’re being fair about how we do it.
I really think it stems from sort of the culture that’s set as far as how you train your hiring managers, how you train your recruiters and making people understand why this is important.”