gender pay gap

Reddit Bans Salary Negotiations. You’ll Never Guess Why.

There was an interesting move in the fight for gender pay equality this week, with the CEO of news blogging site Reddit announcing the company will no longer allow new staff to negotiate their salaries.

The reason being, studies have shown that women don’t fare as well as men in negotiations.

In explaining her decision, Reddit CEO Ellen Pao said the company will simply come up with an offer they think is fair and aren’t going to reward people who are better negotiators.

Now, obviously there are potential benefits for the company too, with a firm policy like this getting them off the hook from sharp-nosed negotiations that can sometimes cost a tonne. But it’s an interesting approach to consider, nonetheless, especially as our national gender pay gap continues to widen.

The latest Australian Bureau of Statistics data shows males on average are earning 19 per cent more than their female counterparts, which is the widest gap since the ABS began collecting the data in 1994. The March release from the ABS had average weekly full-time earnings of men at $1,587.50, while women were about $298 worse off.

The reasons for such a gulf are many; different job and sector preferences, educational biases, workplace practices and discrimination, gender roles and traditions, family commitments and the number of women in senior roles.

And it’s not just a bloke-focussed Australian problem. As you might expect, there are significant gender pay gaps right around the world. This graphic highlights some of the hot spots.

Global Gender Pay Gap

So, what’s the solution?

The European Union has flirted with mandatory quotas for the number of female executives in board rooms, while others say high quality early childhood care and education will get to the root of the problem. Of course, pay transparency would also go a long way in levelling the negotiation field too.

But, given there is no proven model for achieving a level paying field, we’d like to hear your thoughts. If you were king for a day, what would you do to close the gender pay gap?

Image: hyperspace328, via Flickr