Pamela Jeffery is a partner and national lead of the inclusion and diversity strategy group at KPMG in Canada.
Women in Canada don't get paid enough.
This is not news. We've been talking for decades about the gap between what men and women are paid. Depending on how you measure it, today, women earn between 74 cents and 87 cents on the dollar compared with men. Those numbers have not changed much over the years.
In fact, over the past 38 years that Statistics Canada has been measuring this, we've only been able to close the gap by 10 cents. This means that while we've talked about fixing this issue for nearly two generations of workers, we haven't even cut the gap in half.
As we saw with recent legislation brought forward in Ottawa and at Queen's Park, both the federal and Ontario governments feel they need to intervene to address the pay disparity.
In the case of Ottawa, extending pay-equity legislation to cover any firm that does business with the federal government will undoubtedly cause some angst among business owners who will now be required to collect and measure data on gender pay levels in order to bid on jobs. In Ontario, new pay transparency laws should help shed light on where systemic and unconscious bias affects how men and women in similar roles are paid.
However, it is far too early to tell whether these government measures will move the dial and whether the additional reporting and operating regulations will be a drag on the economy.
My work in this space recognizes that some firms will only move on this issue when required by law. But there are substantive business reasons why they should make the effort to understand whether they have a pay gap, and to fix it if they do.
There are many views on why women are paid less than men and why we've not been able to make much headway in reducing the gap. Some will argue it is simply a case of supply and demand. Women make less because they tend to work in lower-paying industries, they suffer gaps in their careers from taking time off to start and raise a family, and are more likely to hold an unskilled part-time job. These contribute to the gap. But they don't tell the full story.
The reality is women, on average, are more educated than men are today. Back in 1971, less than one-third of university grads in Canada were women. Today, more women enroll and graduate from university than do men – and in the past 25 years, the number of women with university degrees has nearly tripled. Yet, despite closing the gap and overtaking men in terms of education, the pay gap has remained stubbornly wide.
On the whole, Canadians see ours as a just and fair society – a society that would see it as fundamentally unfair that someone would be paid less just because of their gender, race, religion, sexual orientation or because of anything but merit and performance.
When I began my career, I discovered that I was being paid less than my male colleague who had a position identical to mine. I didn't want to risk losing my job right after graduating with my first degree, so I said nothing. After two years, I resigned to pursue an MBA in order to propel my career, increase my earnings and lessen the likelihood this would happen again.
I know my experience is not unique. Today, more women in Canada hold both bachelor and master's degrees than men do, yet women remain woefully underrepresented in senior management positions. According to the Canadian Board Diversity Council 2017 Annual Report Card co-sponsored by KPMG each year, women held only 19.6 per cent of executive roles in Canada's largest 500 organizations. So, despite gaining the education, women are largely still being shut out of the C-suite. The same goes for boards of directors in Canada: Women held 22.6 per cent of board seats in 2017. There are many capable women in Canada who could and should serve on boards who just aren't getting the opportunity.
In today's highly competitive environment, it is imperative that companies create environments that not only attract the best and brightest, but get the most out of its people once they come in the door:
- Millennials will make up 50 per cent of Canadian workers by 2020 and are changing the way business is done. Empowered by technology and social media, they are exerting their leverage as employees and customers at organizations to create inclusive and diverse workplaces. If companies don’t adapt, they risk costly turnover.
- We regularly lament the lack of innovation and productivity in Canada – and that our companies are too conservative and staid. The reality is we are not going to foster the kind of ideas needed to compete if we devalue the worth of almost 50 per cent of our work force.
- It is estimated that by 2020, there will be a global talent shortage of 85 million high-skilled and medium-skilled workers. Without cultures where women are valued as equal contributors, employers will find it challenging to replace older workers as they retire.
Almost every conversation I have with our clients centres on the role inclusion and diversity plays in driving innovation. Companies cannot expect to come up with innovative solutions if they don't create an inclusive environment that values the perspectives, experiences and voices of all their employees. The companies that understand this seek out and reward viewpoints that drive better business solutions. And, they help mitigate the growing financial, legal and brand risks associated with discrimination and harassment in the workplace.
Addressing the gender pay gap is the right decision for society – all women deserve to earn a decent living and be paid what they are worth. And it is also the right decision for business.