Starbucks shares pay equity strategy at Executive Summit
July 23-24 Dallas, Texas
When Starbucks Coffee Company announced this spring that they had achieved 100% pay equity among partners of all genders and races performing similar work across the United States, they went Venti and topped their achievement with another bold move. They shared how they did it so others could follow suit.
Plan to be in the room to learn the details with colleagues in the Food Industry during the 2018 Executive Summit LEAD THE WAY: Strategies and Insights to Advance Gender Equity July 23-24 in Dallas, Texas.
In addition to Starbucks executives sharing best practices on pay equity, Food Industry senior leaders will discuss how to drive a culture of inclusion, develop flexible work environments and build CEO commitment to drive gender equity.
Unique this year, director-level contributors and above will join senior leaders in company teams to translate session learnings into concrete action steps.
Getting to 100%
Equal Pay Day is observed each April to mark just how long into the following year women must work to earn what their male counterparts earned in the previous year alone.
Most estimates consistently place the differential between women’s and men’s paychecks at about 80 cents to the dollar (or worse). A 2017 study by ADP Research Institute found that evaluating total compensation, including variable pay such as bonuses, shows men making 28% more than women across all industries.
Beyond the obvious compliance and social responsibility arguments inherent in pay equity, fair compensation for women is a key strategic element of organization-wide recruiting and retention plans. Pay equity can be a serious weapon in the arsenal of companies engaged in the war for talent.
Starbucks leading by example
“I don’t think I quite realized the potential when I first came to Starbucks,” said Sara Bowen, director of the company’s Inclusion, Diversity, Equity and Accessibility (IDEA) team that designed the pay equity system. “For one thing, we employ hundreds of thousands of people. Even if all we did was make things right and fair and equitable for those people, it would be satisfying. But what’s even greater than that is that we can lead.”
The approach taken by Starbucks and advocated by other pay equity leaders and organizations such as the Society for Human Resource Management (SHRM) shares several key elements:
- CEO Commitment: Start at the top to make pay equity a priority, ensure an inclusive workplace and develop succession plans to make sure there are women in the pipeline on their way to the top. At Accenture, top global leadership and the Board made public statements about their intention to achieve pay equity.
- Stop asking candidates for salary histories: A growing number of cities and states now prohibit employers from asking applicants about salary history to alleviate historic gender pay discrepancies. Base pay instead on market data as it relates to specific experience and skills. “One of the most important things to get right is starting pay,” Bowen says. “If a woman comes into a company low, she tends to stay low.”
- Rely on data and comprehensive analytics: Focus on the behaviors and systems that drive equity, not just the number. Hiring just one high-level male executive who starts at a higher salary than a female counterpart will disrupt 100% equity.
- Be transparent about wages: A recent study by PayScale, Inc. found employees who rate their employers poorly on pay transparency are 80% more likely to say they want to leave in the next six months.
- Conduct regular audits: Consider using a third-party and annually report progress across the organization. Proactively discuss unexplained differences in pay between women and men performing similar work when discrepancies are found.