Speaker 1: M M. I have a question for you, Claire. If
Speaker 1: a company knows it has a pay gap and it
Speaker 1: wants to fix it, why not just pay women more.
Speaker 1: I mean, it makes sense to me, but it's not
Speaker 1: actually that easy. In the short term, it works, but
Speaker 1: as a permanent solution not really. Take Salesforce, for example,
Speaker 1: the big San Francisco software company. They tried it and
Speaker 1: they're still working on it. The process started in two
Speaker 1: thousand fifteen when they decided to do an audit to
Speaker 1: find out if they even had a pay gap that
Speaker 1: first year. They kept it pretty simple. They looked only
Speaker 1: at base salaries people with the same job type, broken
Speaker 1: down by gender. They found that six percent of Salesforce's
Speaker 1: employees were being underpaid for no apparent reason. It wasn't
Speaker 1: because they were working fewer hours or didn't have a
Speaker 1: lot of experience. They working pairing software developers to software developers,
Speaker 1: receptionists to receptionists. So did they then pay those people
Speaker 1: more money? Yep, Salesforce spent three million dollars that first
Speaker 1: year bumping people up. Granted, its revenue that year was
Speaker 1: six point seven billion, but still that's a lot of money.
Speaker 1: And not just women got races. There were some men
Speaker 1: who were being underpaid too, So then everything was fixed. Yep,
Speaker 1: the end. No, actually it was the exact opposite. When
Speaker 1: they did the audit again the following year, they added
Speaker 1: race to the equation, factored in bonuses in addition to
Speaker 1: base pay, and found another eleven percent of people who
Speaker 1: are underpaid. Fixing that cost the company another three million dollars.
Speaker 1: Here's Cindy Robbins, the head of HR at Salesforce. That
Speaker 1: second year was also a big learning for us because
Speaker 1: it was a year that we had just finished acquiring
Speaker 1: some of our biggest acquisitions, four team companies that we
Speaker 1: acquire the previous year. So when you acquire fourteen companies,
Speaker 1: you acquire also their pay practices. So they keep bumping
Speaker 1: up people's salaries. But are they doing anything to keep
Speaker 1: the paygap from coming back again and again? Yeah, they are.
Speaker 1: They figured out that those eleven percent of people, a
Speaker 1: lot of them were new to the company and had
Speaker 1: basically arrived at Salesforce already underpaid, and Salesforce had been
Speaker 1: naively basing their salaries off their old ones. Are recruiting
Speaker 1: organization is no longer asking the question what is your
Speaker 1: current compensation. Now it's what is a compensation you expect,
Speaker 1: which is making candidates pause and think about it, And
Speaker 1: we're not forcing them to answer it on the spot.
Speaker 1: They may need some time to do their own level
Speaker 1: of research and come back to us. Yeah, but asking
Speaker 1: someone what they think they should make still puts the
Speaker 1: burden on them to say what they deserve exactly. And
Speaker 1: if you're underpaid but don't know it, you might low
Speaker 1: all your own offer. So it's not a perfect solution. No,
Speaker 1: And when they did the analysis again this year, Salesforce
Speaker 1: found another six percent gap, costing another two point seven
Speaker 1: million dollars. Part of the problem is that there's so
Speaker 1: many factors that go into creating the pay gap, Plus
Speaker 1: Cindy keeps thinking of new factors to add to her analysis.
Speaker 1: I never thought to myself, oh, should I look at
Speaker 1: how we distribute merit? Oh should I look at how
Speaker 1: we distribute promotions at the beginning of the year, by gender,
Speaker 1: by pay practices. It sounds like Salesforce is trying and
Speaker 1: has made some strides, but it hasn't fixed the pay gap. No,
Speaker 1: and the company doesn't expect to fix it as then
Speaker 1: eliminate the entire issue. Anytime soon. The pay gap is
Speaker 1: just a numerical reflection of the way or society and
Speaker 1: economy are set up. No matter what size your company is,
Speaker 1: you're probably going to encounter at least some of the
Speaker 1: factors that lead to the pay gap. That's something Cindy
Speaker 1: says has been hard for people to understand. You know,
Speaker 1: do we still want to be fixing six percent of
Speaker 1: the population. No, But you know, it's an audit and
Speaker 1: data is being inputed, Assumptions sometimes are being made. I
Speaker 1: think you're always going to have to do the audit
Speaker 1: every single year, and that they're always there's always going
Speaker 1: to be some level of room for error, and that's
Speaker 1: the error you want to identify and you want to fix.
Speaker 1: But our systems perfect to ensure that we are paying
Speaker 1: everyone equally, not yet, and that's what we're working on.
Speaker 1: When you look at the world, you know what the
Speaker 1: population like, Where is our place like? Where is our value?
Speaker 1: Women deserve equal for equal work and nation one, the
Speaker 1: median salary for men is greater than women in nine
Speaker 1: point six percent of major occupations women do they want.
Speaker 1: We want to end gender inequality, and to do this
Speaker 1: we need everyone involved. It's a concept called information a symmetry.
Speaker 1: If you don't know what the going rate is for
Speaker 1: your salary, it's easier for the company to rip you off.
Speaker 1: Girl Power equalization between the sexy. I ask no favor
Speaker 1: for my sex. All I ask of our reden is
Speaker 1: that they take their feet or fur lex. Welcome back
Speaker 1: to the paycheck. I'm Rebecca Greenfield. Salesforces struggle brings up
Speaker 1: an important point about fixing the pay gap. One company
Speaker 1: paying women more money is like taking advil for a
Speaker 1: broken bone. The pain is going to come back until
Speaker 1: the bone heals. That's why Salesforce has to do it's
Speaker 1: pay audits year after year. It doesn't exist in a vacuum,
Speaker 1: and it also only addresses one facet of the pay gap,
Speaker 1: not the issue of the highest paying jobs generally being
Speaker 1: held by men. But there are solutions to the pay
Speaker 1: gap that attempt to heal the bone. Take how Salesforce
Speaker 1: no longer asks new hires what they made at their
Speaker 1: previous jobs. Women tend to start out at lower salaries
Speaker 1: than men, so basing salaries on what people were paid
Speaker 1: before only perpetuates that inequality. They're about a dozen places,
Speaker 1: including Massachusetts, California, and New York City, where asking about
Speaker 1: a job applicants previous salary is illegal. But the solution
Speaker 1: isn't perfect. Like I talked about with Player, women can
Speaker 1: still end up making less than men for other reasons.
Speaker 1: They might low ball their offers, they might be perceived
Speaker 1: as too aggressive during a negotiation. They might still not
Speaker 1: ask for enough money. But there's more than one way
Speaker 1: to treat paid disparities at a deeper level, like total
Speaker 1: salary transparency. If everyone knew how much everyone else was making,
Speaker 1: then it would be tough for employers to get away
Speaker 1: with paying certain people less for no reason. And if
Speaker 1: you know what you could be making, you're more likely
Speaker 1: to ask for what you deserve. Total pay transparency is
Speaker 1: kind of extreme. People generally don't like talking about money,
Speaker 1: and right now employers take advantage of that. It allows
Speaker 1: them to keep a chunk of salaries below market rate,
Speaker 1: and that saves the money. One person who refuses to
Speaker 1: buy into that social taboo is Jen Schiffer. She's a
Speaker 1: software engineer in New York, and she talks about her
Speaker 1: salary about as freely as other New Yorkers talk about
Speaker 1: real estate prices. But I've always been super like transparent
Speaker 1: with people who asked me to be with my salary,
Speaker 1: which kind of got me in trouble of my last
Speaker 1: job without like Trump, troubles of fake idea. But I
Speaker 1: did have coworkers who are upset at how much I
Speaker 1: was talking about and trying to talk about. Luckily, Jen
Speaker 1: now works at fog Creek, a small software company that
Speaker 1: last to your instituted a policy known as radical pay transparency,
Speaker 1: everyone within a company knowing what everyone else is making
Speaker 1: more or less. I decided to investigate, you know, for
Speaker 1: me at a personal level, it was about treating workers right.
Speaker 1: That's a Neil dash the CEO of fog Creek. He
Speaker 1: took over the company in December. He came with a
Speaker 1: mission to make fog Creek and tech in general more
Speaker 1: fair to people, regardless of gender or race. You know,
Speaker 1: I grew up in a household with you know, my
Speaker 1: mom being in the union her whole life, and and
Speaker 1: you know, understanding the importance of respecting workers. I don't
Speaker 1: think it's any secreted women and other underrepresented groups in
Speaker 1: tech that end up trying to negotiate their way to
Speaker 1: face fair salaries may or may not get there and
Speaker 1: really sort of ending up behind right when they start,
Speaker 1: and that permanently impacts the trajectory of your whole things
Speaker 1: over your lifetime. The company only has about three dozen employees,
Speaker 1: but still that's no guarantee people were being paid fairly. Transparency,
Speaker 1: in theory, would not only reveal any pain equalities that
Speaker 1: had cropped up in the twenty years fog Creek existed
Speaker 1: before and Neil got there, it would also help ensure
Speaker 1: that things stayed equal over the long term by holding
Speaker 1: the company accountable. Here's Jessica Moy, the head of culture,
Speaker 1: which is like hr at fog Creek. I was a
Speaker 1: little nervous that going from you know, not transparency to
Speaker 1: transparency it was going to kind of like create adverse
Speaker 1: reactions for certain people because I just didn't know. I mean,
Speaker 1: people reactively differently to sharing financial information and people's level
Speaker 1: of comfortability. It's very different. Like I said, people don't
Speaker 1: like talking about money, people who make too much money
Speaker 1: don't want to feel guilty about it, and people not
Speaker 1: making enough don't want to feel like dupes. That's why
Speaker 1: fog Creek decided to take transparency slow, and Neil sent
Speaker 1: out a survey asking people what kind of salary information
Speaker 1: they'd be okay with sharing. He found out not everyone
Speaker 1: was as enthusiastic about pay transparency as he was. There
Speaker 1: were some people that were just sort of like, I
Speaker 1: don't know how I feel about this. I've never encountered
Speaker 1: this question before. I don't know what the implications are
Speaker 1: about talking about my pay and and and in some
Speaker 1: cases really going deep into it with some of our
Speaker 1: team members, and they were like, you know, my family
Speaker 1: has never talked about pay, and I'm you know, I'm
Speaker 1: worried about like open salary transparency because like my brother
Speaker 1: and I don't know what each other makes, and like
Speaker 1: I don't want that to be awkward at Thanksgiving. Even
Speaker 1: gen Scheffer, who talked a big game about salary transparency,
Speaker 1: had some anxiety. I'm like, are there other engineers here
Speaker 1: comparing themselves to me? And if they find out I'm
Speaker 1: making like more than them, will they feel slight? And
Speaker 1: if I'm making less than them, will they feel like
Speaker 1: that's fair? Like I I don't know, Like I don't know.
Speaker 1: I'm the I'm the only woman on my team, and
Speaker 1: so there's not many women engineers at the company. I
Speaker 1: am always very insecure about whether guys I work with
Speaker 1: or alongside, would think that I am as valuable as
Speaker 1: a company says I am. Still not a single person
Speaker 1: said they preferred the status quo. The company wanted more
Speaker 1: pay transparency. The next step before telling anybody anything about
Speaker 1: what their colleagues were making was to do an internal
Speaker 1: audit of compensation at fog Creek, and we found that
Speaker 1: we had inequities. I mean, I think any any company
Speaker 1: that's been around for more than five minutes is going
Speaker 1: to if they're being honest. And Neil used the data
Speaker 1: to help and figure out what constituted fair pay. In
Speaker 1: the first place. He looked at what people on each
Speaker 1: team we're making, and then he compared that information for
Speaker 1: similar positions that he found on sites like pay scale.
Speaker 1: Using all of that, he decided on a range that
Speaker 1: made sense for each job title. I was curious to
Speaker 1: know if, as expected, women had ended up making less
Speaker 1: than men. Yeah. I think the majority of people that
Speaker 1: were at the high end of the range or men
Speaker 1: for sure, But I think the people that weren't the
Speaker 1: low end of the range two were also men. So like,
Speaker 1: it's probably reflecting more the fact that we don't have
Speaker 1: as good a gender balance as you should to men
Speaker 1: are over indexed on both the high end low end
Speaker 1: of the spectrum. He raised the salaries of two people
Speaker 1: he found out weren't making enough money even before making
Speaker 1: all the pay data public, But there were also some
Speaker 1: people he found who were making too much money. Those
Speaker 1: people got to stay where they were rather than go
Speaker 1: for truly radical pay transparency. Bog Creek decided to share
Speaker 1: just those salary ranges with no names attached, just job titles,
Speaker 1: and Neil wouldn't tell me what those were exactly, But
Speaker 1: finally last September he was ready to share them with
Speaker 1: the rest of the company. At one of their monthly
Speaker 1: town hall meetings, he gathered everyone together. Some people were
Speaker 1: actually in the office but others were remote, and he
Speaker 1: put all the data up on the screen and there
Speaker 1: wasn't a mutiny, but not everyone was happy. You know,
Speaker 1: some stuff we screwed up, Like we have some departments
Speaker 1: as a small company that are one person, so we
Speaker 1: listed a salary range for the role of the only
Speaker 1: person in that department and they're like, okay, well, my
Speaker 1: salary is basically out there like everybody else is in
Speaker 1: a team, and it's a range. But they're like, if
Speaker 1: if this is the only person in this role, everybody
Speaker 1: knows exactly what I make to within a five thousand
Speaker 1: dollar band. Jessica moy was one of the people who
Speaker 1: didn't have anonymity. I'm the only person in my position,
Speaker 1: so it's pretty clear, like my this is Jessica's Valerie band,
Speaker 1: and everyone knows that's my job. And I never had
Speaker 1: any issue with that, So for me, it wasn't like
Speaker 1: a thing to process. I was like, this is what
Speaker 1: I make. Even though Jessica didn't mind that everyone knew
Speaker 1: her salary, you can see why some people might. Jun
Speaker 1: Scheffer was also in a range of her own, but
Speaker 1: she had a different problem him. I think it was like,
Speaker 1: some of these ranges are pretty wide, but I would
Speaker 1: feel more comfortable of bringing in other underrepresented people into
Speaker 1: the company once I know it's like completely fair and
Speaker 1: Neil knows he has more work to do. To Jen's point,
Speaker 1: after the town hall, fog Creek decided to put salary
Speaker 1: ranges on all of its job postings so that people
Speaker 1: know they're getting hired on a level playing field. You
Speaker 1: can't build trust just by saying trust me and not
Speaker 1: showing anybody the work, especially in in tech, whereas so
Speaker 1: many people have come from other companies that weren't treating
Speaker 1: them right there weren't weren't you know, being fair to them, UM,
Speaker 1: and so transparency is just the foundation upon which you
Speaker 1: build a relationship between an employer and a worker that
Speaker 1: is trusting. And you know, we try to do that
Speaker 1: and everything we do. Given how much anil believes in
Speaker 1: pay transparency, I asked him how transparent he planned to
Speaker 1: be with his own salary. It was absurd because I said,
Speaker 1: this is the range that I make the bottom of it.
Speaker 1: So I like, UM, made a structure for any future CEO.
Speaker 1: I guess, but I was. I just sort of disclosed
Speaker 1: my personal salary because I was like, I don't I
Speaker 1: want to model the thing I want people to feel
Speaker 1: comfortable doing. Up to now, we've just been trying to
Speaker 1: solve the pay gap by looking at the numbers. But
Speaker 1: there are all kinds of things that happen at the
Speaker 1: office and at different points in women's careers that make
Speaker 1: a big difference over time in the amount of money
Speaker 1: they make. And the biggest thing of all is motherhood.
Speaker 1: Nothing trash is your earning potential, like having a kid.
Speaker 1: Men and women start their careers making about the same
Speaker 1: amount of money, But the pay gap really starts to
Speaker 1: show up when men and women hit their late twenties.
Speaker 1: That is, when employers think women are about to have kids.
Speaker 1: One study found that the bulk of the pay gap
Speaker 1: happens between ages twenty six and thirty three for college
Speaker 1: educated women. And this isn't just because women cut back
Speaker 1: their hours to pick up slack at home. Mothers make
Speaker 1: proportionately less than men based on ours worked, research has found.
Speaker 1: So what if we could do something about that, make
Speaker 1: sure women could have kids and keep earning as much
Speaker 1: money as their male colleagues. Adobe, the San Jose based
Speaker 1: company that makes design software and also the flash plug
Speaker 1: in you used to watch videos on the internet, last
Speaker 1: year announced that they closed their gender pay gap one
Speaker 1: percent in the US. That's for men and women doing
Speaker 1: the same jobs, But that still doesn't mean the working
Speaker 1: environment was perfectly equal, especially for women and men who
Speaker 1: have kids. My colleague Ellen Hewitt explains, Caitlin Azzie works
Speaker 1: at Adobe as a recruiter, but right now she's on
Speaker 1: maternity leave. So Dylan was born on New Year's Eve,
Speaker 1: so she squeaked in there. We got the tax right
Speaker 1: off and everything. So and she was ten pounds six ounces,
Speaker 1: huge baby. Yeah, we have big babies in our family.
Speaker 1: Both men and women at Adobe get sixteen weeks of
Speaker 1: paid paternal or maternal leave, regardless of whether they're the
Speaker 1: primary caregiver. Birth Mothers get an additional ten weeks of
Speaker 1: medical leave. That's compared to less than six weeks at
Speaker 1: the average private company in the US that offers paid
Speaker 1: leave for a new child, so already they're doing pretty well.
Speaker 1: On top of that, the company gives employees the option
Speaker 1: to take a more flexible work schedule, like when they
Speaker 1: come back from leave. They call it Adobe Flex Time.
Speaker 1: This is Ellen Ellen. I met with Caitlin along with
Speaker 1: Rosemary Arianta Keiper, who oversees the flex Time program. Here's Caitlin.
Speaker 1: I'm learning with me in a new mom It's like
Speaker 1: you can plan for the you know, every single thing,
Speaker 1: but nothing really goes to plan. So just having it
Speaker 1: be you know, maybe I need to work from home
Speaker 1: a couple of times a month, or you know, three
Speaker 1: times in this one week, or just having that to
Speaker 1: me is really really I can see be very helpful
Speaker 1: when I return back to work, coming back to work
Speaker 1: after having a child can be really hard, no matter
Speaker 1: how much time you got from eternity leave, you're just
Speaker 1: starting to figure out what being a mom is like,
Speaker 1: or how to juggle caring for the kids you already
Speaker 1: have plus the infant you just brought home. Without the
Speaker 1: flexibility to ease back into full time work, some women
Speaker 1: might decide to downshift to part time, which drastically limits
Speaker 1: their earning potential. That usually involves a job switch, and
Speaker 1: if going back to your old job with a new
Speaker 1: baby is difficult, finding a new job is much much harder,
Speaker 1: especially when you factor in the cost of daycare. In
Speaker 1: the US, lots of women decide that it's just too
Speaker 1: much and stay home for good. When Caitlin comes back
Speaker 1: to work this month, she plans to take a day
Speaker 1: each week to work from home so she can spend
Speaker 1: the afternoons with her daughter. Adobe has offered the flex
Speaker 1: time option for years, but it was only in the
Speaker 1: last year that they started promote doing it internally and
Speaker 1: training managers how to talk to their employees about it.
Speaker 1: For Caitlin, that was a hugely important change. She was
Speaker 1: already nearing her due date by the time she found
Speaker 1: out the option existed. I think, um, before they rolled
Speaker 1: out this program and the framework was more standardized, I
Speaker 1: don't necessarily think people first knew that this was an option.
Speaker 1: I think it gives people, at least me, a little
Speaker 1: bit more of empowerment to think about what I need first.
Speaker 1: Before they rolled it out, I just assumed I'd come
Speaker 1: back full time and you know, you would be a
Speaker 1: hard couple of weeks and then you just get thrown
Speaker 1: back in and that's that. And um, that was sort
Speaker 1: of my assumption. And so I just don't think people
Speaker 1: want to ask for for more unless they, you know,
Speaker 1: unless it's something that they can say, hey, it's a
Speaker 1: point to a policy or point to something that's more normalized,
Speaker 1: because I think there is a you know, there is
Speaker 1: always pressure to be here if you can and things
Speaker 1: like that. Rosemary knows that pressure well. As the vice
Speaker 1: president of Global Rewards for a OBI. She knew that
Speaker 1: even though the option for a flexible schedule was out there,
Speaker 1: a lot of people who might benefit from it weren't
Speaker 1: taking it. Yeah, I think there was the sentiment of
Speaker 1: not realizing that they could take it. It does seem
Speaker 1: to give permission and lend itself to the ability to
Speaker 1: be able to say, look, this is documented somewhere, it's
Speaker 1: kind of a formal policy. They're promoted. So it does
Speaker 1: seem to give more permission to individuals to feel like
Speaker 1: they can ask for it. You know, oftentimes the type
Speaker 1: of relationship you have with a manager and kind of
Speaker 1: the value system or or what they believe is important
Speaker 1: dictates oftentimes how much they're willing to provide flexibility. And
Speaker 1: what we realized was in some organizations it happened seamlessly,
Speaker 1: it wasn't an issue, and in others, um managers weren't
Speaker 1: as willing um to do it because they felt like
Speaker 1: they had demands or or weren't sure how they could
Speaker 1: um manage the program equitably across the organization. Since making
Speaker 1: Adobe flex time more of a formal policy less September,
Speaker 1: Adobe has seen a ten increase in the number of
Speaker 1: people choosing it. Rosemary says that the more normal a
Speaker 1: flexible work schedule seems, the less likely it is that
Speaker 1: people who take advantage of it will be implicitly penalized
Speaker 1: for doing so. Because here's what's worrisome right now. Even
Speaker 1: though both parental leave and flex time are offered to
Speaker 1: men and women, men are still taking way less time off.
Speaker 1: What we're seeing is is most men, on average are
Speaker 1: taking closer to one month. And the feedback that we've
Speaker 1: got is is is because you know I've got we
Speaker 1: don't both need to be at home. Is essentially the
Speaker 1: response that we've gotten, even though they both have the
Speaker 1: ability to be at home. The point of encouraging men
Speaker 1: to use programs like parental leave and flex time isn't
Speaker 1: just so that women have some help at home, although
Speaker 1: it's that too. The point is so that women and
Speaker 1: men share the burden of childcare more equally, including the
Speaker 1: workplace penalties that come with it. When you miss a
Speaker 1: may your career opportunity because you're at home taking care
Speaker 1: of the kids. That can be frustrating. But right now,
Speaker 1: women still do twice as much of the childcare in
Speaker 1: the US. That means that those missed opportunities are falling
Speaker 1: disproportionately on them. I'd love to see more men start
Speaker 1: taking the time off right and taking advantage of these programs,
Speaker 1: because I think that act in itself will also kind
Speaker 1: of level the paying field. Two parents each with the
Speaker 1: flexibility to balance work and home life. It does sound
Speaker 1: pretty idyllic, It's also good for women's earnings. A study
Speaker 1: in Sweden found that for each month of paternity leave
Speaker 1: the father takes, the mother's income rises by an average
Speaker 1: of seven percent. But in the US, at least, we're
Speaker 1: a long way from that kind of thing being normal.
Speaker 1: Only of private sector workers get any paid for rental
Speaker 1: leave at all. Changing the way we deal with women
Speaker 1: and men and work isn't something that happens all at once.
Speaker 1: Paid discrimination has been illegal since the sixties, but that
Speaker 1: hasn't stopped companies from paying women less over the years.
Speaker 1: That's because sexism is a way bigger problem than the
Speaker 1: pay gap. No one company is going to solve sexism
Speaker 1: for everyone, but Rosemary is right. The more places where
Speaker 1: gender equality is the norm, the harder it is for
Speaker 1: everyone else to keep treating men and women differently. Next
Speaker 1: week on The Paycheck, we're going to talk about how
Speaker 1: individual women are trying to solve the pay gap for themselves.
Speaker 1: Some are even resorting to motivational chanting. You are not
Speaker 1: going to want to miss it. Thanks for listening to
Speaker 1: another episode of The Paycheck. If you like the show,
Speaker 1: please head on over to Apple Podcasts or wherever you
Speaker 1: listen to rate, review, and subscribe. This show was reported
Speaker 1: by Ellen Hewitt Claire Subteth and hosted and reported by
Speaker 1: me Rebecca Greenfield. It was edited by Jillian Goodman and
Speaker 1: produced by Liz Smith. We also had help from Francesca Levie,
Speaker 1: Janet Paskin, and Magne Henrickson. Our original music is by
Speaker 1: Leo Sidron, carry Vanderyott did the illustrations on our show page,
Speaker 1: which you can find at bloomberg dot com Slash the Paycheck.
Speaker 1: Francesca Levie is Bloomberg's head of Podcasts