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Salesforce Closes the Gender Pay Gap

February 28, 2018

In a study by the Institute for Women’s Policy Research (April, 2012), on average, women earn 82.2% of what men earn in the 20 most common occupations for women. In software development, applications and system software, the percentage is higher: women earn 86.4% of what men earn. But the percentage of female workers in this occupation is only 18.1%.

One common explanation for the wage gap is that women take more time off and work fewer overall hours, consequently accumulating less work experience over time. But this study by the United States General Accounting Office states that even “after accounting for factors affecting earnings, women earned an average of 80 percent of what men earned in 2000.”

The California Equal Pay Act of 1949 (EPA) stated that “No employer shall pay any individual in the employer’s employ at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs”.  Over 38.8 billion dollars is lost due to the wage gap between men and women. On October 6, 2015, Governor Jerry Brown signed the bill into law and the amendment took effect on January 1, 2016. An additional amendment was signed that prohibits employers from justifying a sex-, race-, or ethnicity-based pay differences solely on the grounds of prior salary and took effect  January 1, 2017.

The Equal Pay Salary Assessment

Citing Equality as a core value, Salesforce states that businesses can be powerful platforms for social change and that its higher purpose is to drive Equality for all. From a business perspective, Salesforce believes that diverse companies are more innovative and better positioned to succeed in the Fourth Industrial Revolution. One of the Salesforce’s four core pillars of Equality is Equal Pay.

To address the Equal Pay pillar, Salesforce regularly assesses the salaries of its global employees to eliminate pay discrepancies across the entire organization. It conducted inaugural salary assessment in 2016.

Salesforce sorted employees with comparable roles into groups and analyzed salaries of those groups to determine whether there were statistically significant wage differences between women and men based on objective factors that determine pay, such as job function, level and location. If there were unexplained differences, salary adjustments were made for both men and women as needed.

As a result of the first salary assessment, approximately six percent of Salesforce employees required a salary adjustment, and roughly the same number of women and men were impacted. Salesforce has spent nearly $3 million dollars to eliminate statistically significant differences in pay.

The next year, Salesforce increased the scope of its assessment, evaluating salaries, as well as bonuses globally. It also looked at differences in pay for not only gender, but also race and ethnicity in the U.S. Eleven percent of employees received adjustments following the second assessment, resulting in additional $3 million to address any unexplained differences in pay.

CEO Accountability

The news of the Salesforce salary assessment ignited an industry conversation about CEO accountability in closing the gender wage gap. “Every CEO needs to look at if they’re paying men and woman the same,” Salesforce CEO Marc Benioff said at the World Economic Forum. “That is something that every single CEO can do today.” Salesforce also committed to the Glassdoor Equal Pay Pledge.

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