There’s one thing large employers can start doing immediately to help reduce the gender pay gap: ban hiring managers from asking job candidates what they currently earn.
The theory goes that such questions set expectations around what the job candidate will be paid instead of focusing on what the job is worth — and if female candidates are already earning less than male candidates (which is statistically likely) then it will merely perpetuate the pay gap.
The theory has already had plenty of attention in the United States, where a number of states have made it illegal to ask such questions in job interviews. Amazon has been applying blanket bans on asking about salary across the country and Google VP Lasio Bock shared as far back as 2016 that asking about someone’s current salary instead of what a job is worth can lead to “anchoring bias”.
Now the link between asking about someone’s pay history and gender bias is beginning to catch on in Australia, with at least one major employer publicly promising to end questions about salary in job applications and interviewing.
Shortly before Equal Pay Day last month, brewer Lion announced it had formally quit asking about the current salary of job candidates during its online application process, as well as during job interviews — in a statement to Women’s Agenda it noted that the more formal ban had come after months of ending this practice informally.
They believe it will not only help the firm keep its pay gap closed (which they managed to close for like-for-like roles in 2016), but also create a much fairer system of ensuring pay is determined according to market data.
It’s a good move. But publicly making it known and encouraging other employers to follow their lead is even better, especially given the work and money Lion has already put into closing its own gender pay gap.
As CEO Stuart Irvine told the Australian Financial Review on the issue, “If there’s a female applicant and a male applicant and in the interview they’re both successful and we say we’ll pay you 10% more than you’re currently on – you’re just perpetuating the gap into the organisation.”
Lion spent $6 million closing the 3.2 per cent gender pay gap it uncovered with the help of Mercer analysis back in 2016. Irvine said at the time the analysis was done as a “health check up” and they never expected to find any issues. It quickly went ahead and increased pay for 950 women and 700 men, and has kept the gap closer ever since, conducting a pay analysis every six months.
Lion also has a target of reaching 50:50 gender balance across the organisation by the year 2026. It says it’s focusing on three key areas to get there: culture, talent acquisition and policies and practices.
Equal pay came up over and over again when Women’s Agenda surveyed more than 800 women on what they really want from an employer. Some suggested pay transparency would help, while others noted the need to base salaries on the position rather than what an individual already earns.
Banning questions about pay history looks like an immediate opportunity for employers to simply and cheaply address their own gender pay gaps, and avoid them occurring in the first place.