During a recent talk in Washington, Google's “people operations” chief Laszlo Bock said something notable about fixing the equal pay conundrum. While he admitted that men tend to negotiate more than women, what he didn't do was suggest — as is so often the case — that solving the gender wage gap is simply a matter of women negotiating more. Rather, he said, “large companies could totally fix this problem.”
Here's his reasoning. When people start at Google, Bock said, “we figure out what the job is worth, not the person." While that may mean some people take a pay cut while others get a raise, the actual starting salaries for both men and women at Google "are identical or statistically identical,” Bock said. Large companies are the wage setters in this country, he added, so they have the power to fix the issue by paying based on a job's market value. “If you do that instead of starting from where somebody is today, the problem goes away.”
Good for Bock. Though he wasn’t clear how Google determines a job's worth or what kind of salary information Google asks from candidates (the company did not provide more detail on this question when requested), his remarks seem to suggest another way companies can do their part to help solve the persistent and enigmatic problem of the gender pay gap:
Stop asking, "What's your salary history?"
If companies relied less on what people made in their past jobs, and more on the actual market value of the job being filled, they’d be less likely to perpetuate the gap between men's and women's salaries. After all, when employers base someone's new salary off of their former salary elsewhere, they just compound any past biases or negotiation disadvantages.
Think about it this way. Unequal salaries can be “self-perpetuating,” said Molly Anderson, founder of the consulting firm Exponential Talent. Employees who negotiate a higher salary early in their career — or are awarded one due to some kind of unconscious bias — benefit for years as they get promoted or take on new jobs.
Higher salaries also have what's known as a “branding” impact. Just as consumers think pricier products are better quality, recruiters and managers can have the same reaction when a job candidate has a higher past salary, Anderson explained. “It may trigger a conviction that one hire is lower quality than another, even if that isn’t the reality.”
It’s such an awkward thing to discuss anyway. Of all the questions job applicants hate to answer, the worst may be: “How much did you make in your last job?” Entire corners of the Internet are devoted to helping people tiptoe through this minefield of a topic, or politely refuse to answer it entirely.
Whether the question is about salary history or salary requirements for the job (as many companies put it), throwing out that first number tends to be more stressful and cringe-worthy for women, said Laura Kray, a professor at the University of California, Berkeley. Her research has shown that women are more relieved when the first number they submit in a negotiation is accepted, whereas men are more likely to feel regret.
If more companies were to start with an initial offer and then let the candidate make the case for why more is deserved, Kray said, it could help mitigate the problem. "That could at least not put [women] in the position of having to put out their first number," she said, which "we know in job negotiations can lead women to undersell themselves."
In other words, the idea of not focusing on salary history or salary requirements doesn't mean there's not then room for negotiation. "Your premise — that we need to get rid of that anchor dragging [women] down over the course if their careers — is correct," said Margaret Ann Neale, a professor at Stanford Graduate School of Business who focuses on gender and negotiation. Yet "it's not sufficient," she added. There's still the need to negotiate once an initial offer is made. "I cannot say enough about how it’s important for people, women and men, to get a good sense of what their jobs are worth."
Companies, after all, have much more than a good sense of what jobs are worth. Most large corporations have reams of highly detailed data on pay ranges for every job imaginable in every geographic region where they operate. Most also already have set a specific range for the job's pay before they start interviewing candidates.
The assumption, of course, is that employers like the asymmetry of information. When they know what someone has made in the past, they have more leverage to low-ball those who've been low-balled before. As a result, it might seem that such questions about salary history won't be going away any time soon.
But that may be short-sighted. More and more companies are waking up to the idea that they have a role to play in solving the equal-pay problem. Federal contractors now must to share compensation data based on gender and race. Shareholder activists are encouraging companies to disclose their wage gap. Some companies, like Gap, Inc., are having independent firms like Exponential Talent audit their pay data. Reddit interim CEO Ellen Pao—Silicon Valley’s recent poster woman for gender issues—recently said she has even taken negotiating out of her organization's hiring process.
"You'd really have to be unaware of the larger world to not at least be taking a look at this issue," said Anderson of Exponential Talent.
And of course, smart companies realize that resolving any gender pay gap that exists unfairly in their ranks should help them create a better culture, recruit more talented women and retain the kind of diverse workforce that could help the bottom line.
Fixing it is an incredibly complicated task that won't come from any one solution. But less of a focus on job candidates' salary history, and more of a focus on what the job is actually worth, could be a powerful step forward. Plus, it would have the very welcome side effect of eliminating that frustratingly awkward moment in interviews.