Treating the Disease

first year. They kept it pretty simple. They looked only at base salaries people with the same job type, broken down by gender. They found that six percent of Salesforce's employees were being underpaid for no apparent reason. It wasn't because they were working fewer hours or didn't have a lot of experience. They working pairing software developers to software developers, receptionists to receptionists. So did they then pay those people

more money? Yep, Salesforce spent three million dollars that first year bumping people up. Granted, its revenue that year was six point seven billion, but still that's a lot of money. And not just women got races. There were some men who were being underpaid too, So then everything was fixed. Yep,

the end. No, actually it was the exact opposite. When they did the audit again the following year, they added race to the equation, factored in bonuses in addition to base pay, and found another eleven percent of people who are underpaid. Fixing that cost the company another three million dollars.

Here's Cindy Robbins, the head of HR at Salesforce. That second year was also a big learning for us because it was a year that we had just finished acquiring some of our biggest acquisitions, four team companies that we acquire the previous year. So when you acquire fourteen companies, you acquire also their pay practices. So they keep bumping up people's salaries. But are they doing anything to keep the paygap from coming back again and again? Yeah, they are.

They figured out that those eleven percent of people, a lot of them were new to the company and had basically arrived at Salesforce already underpaid, and Salesforce had been naively basing their salaries off their old ones. Are recruiting organization is no longer asking the question what is your current compensation. Now it's what is a compensation you expect, which is making candidates pause and think about it, And we're not forcing them to answer it on the spot.

They may need some time to do their own level of research and come back to us. Yeah, but asking someone what they think they should make still puts the burden on them to say what they deserve exactly. And if you're underpaid but don't know it, you might low all your own offer. So it's not a perfect solution. No, And when they did the analysis again this year, Salesforce found another six percent gap, costing another two point seven

million dollars. Part of the problem is that there's so many factors that go into creating the pay gap, Plus Cindy keeps thinking of new factors to add to her analysis. I never thought to myself, oh, should I look at how we distribute merit? Oh should I look at how we distribute promotions at the beginning of the year, by gender, by pay practices. It sounds like Salesforce is trying and has made some strides, but it hasn't fixed the pay gap. No, and the company doesn't expect to fix it as then

eliminate the entire issue. Anytime soon. The pay gap is just a numerical reflection of the way or society and economy are set up. No matter what size your company is, you're probably going to encounter at least some of the factors that lead to the pay gap. That's something Cindy says has been hard for people to understand. You know, do we still want to be fixing six percent of the population. No, But you know, it's an audit and

data is being inputed, Assumptions sometimes are being made. I think you're always going to have to do the audit every single year, and that they're always there's always going to be some level of room for error, and that's the error you want to identify and you want to fix. But our systems perfect to ensure that we are paying everyone equally, not yet, and that's what we're working on. When you look at the world, you know what the population like, Where is our place like? Where is our value?

Women deserve equal for equal work and nation one, the median salary for men is greater than women in nine point six percent of major occupations women do they want. We want to end gender inequality, and to do this we need everyone involved. It's a concept called information a symmetry. If you don't know what the going rate is for your salary, it's easier for the company to rip you off. Girl Power equalization between the sexy. I ask no favor for my sex. All I ask of our reden is

that they take their feet or fur lex. Welcome back to the paycheck. I'm Rebecca Greenfield. Salesforces struggle brings up an important point about fixing the pay gap. One company paying women more money is like taking advil for a broken bone. The pain is going to come back until the bone heals. That's why Salesforce has to do it's

pay audits year after year. It doesn't exist in a vacuum, and it also only addresses one facet of the pay gap, not the issue of the highest paying jobs generally being held by men. But there are solutions to the pay gap that attempt to heal the bone. Take how Salesforce no longer asks new hires what they made at their previous jobs. Women tend to start out at lower salaries than men, so basing salaries on what people were paid

before only perpetuates that inequality. They're about a dozen places, including Massachusetts, California, and New York City, where asking about a job applicants previous salary is illegal. But the solution isn't perfect. Like I talked about with Player, women can still end up making less than men for other reasons. They might low ball their offers, they might be perceived as too aggressive during a negotiation. They might still not

ask for enough money. But there's more than one way to treat paid disparities at a deeper level, like total salary transparency. If everyone knew how much everyone else was making, then it would be tough for employers to get away with paying certain people less for no reason. And if you know what you could be making, you're more likely to ask for what you deserve. Total pay transparency is kind of extreme. People generally don't like talking about money,

and right now employers take advantage of that. It allows them to keep a chunk of salaries below market rate, and that saves the money. One person who refuses to buy into that social taboo is Jen Schiffer. She's a software engineer in New York, and she talks about her salary about as freely as other New Yorkers talk about real estate prices. But I've always been super like transparent with people who asked me to be with my salary, which kind of got me in trouble of my last

job without like Trump, troubles of fake idea. But I did have coworkers who are upset at how much I was talking about and trying to talk about. Luckily, Jen now works at fog Creek, a small software company that last to your instituted a policy known as radical pay transparency, everyone within a company knowing what everyone else is making more or less. I decided to investigate, you know, for me at a personal level, it was about treating workers right. That's a Neil dash the CEO of fog Creek. He

took over the company in December. He came with a mission to make fog Creek and tech in general more fair to people, regardless of gender or race. You know, I grew up in a household with you know, my mom being in the union her whole life, and and

you know, understanding the importance of respecting workers. I don't think it's any secreted women and other underrepresented groups in tech that end up trying to negotiate their way to face fair salaries may or may not get there and really sort of ending up behind right when they start, and that permanently impacts the trajectory of your whole things over your lifetime. The company only has about three dozen employees,

but still that's no guarantee people were being paid fairly. Transparency, in theory, would not only reveal any pain equalities that had cropped up in the twenty years fog Creek existed before and Neil got there, it would also help ensure that things stayed equal over the long term by holding the company accountable. Here's Jessica Moy, the head of culture,

which is like hr at fog Creek. I was a little nervous that going from you know, not transparency to transparency it was going to kind of like create adverse reactions for certain people because I just didn't know. I mean, people reactively differently to sharing financial information and people's level of comfortability. It's very different. Like I said, people don't like talking about money, people who make too much money don't want to feel guilty about it, and people not

making enough don't want to feel like dupes. That's why fog Creek decided to take transparency slow, and Neil sent out a survey asking people what kind of salary information they'd be okay with sharing. He found out not everyone was as enthusiastic about pay transparency as he was. There were some people that were just sort of like, I don't know how I feel about this. I've never encountered

this question before. I don't know what the implications are about talking about my pay and and and in some cases really going deep into it with some of our team members, and they were like, you know, my family has never talked about pay, and I'm you know, I'm worried about like open salary transparency because like my brother and I don't know what each other makes, and like I don't want that to be awkward at Thanksgiving. Even gen Scheffer, who talked a big game about salary transparency,

had some anxiety. I'm like, are there other engineers here comparing themselves to me? And if they find out I'm making like more than them, will they feel slight? And if I'm making less than them, will they feel like that's fair? Like I I don't know, Like I don't know. I'm the I'm the only woman on my team, and so there's not many women engineers at the company. I am always very insecure about whether guys I work with or alongside, would think that I am as valuable as

a company says I am. Still not a single person said they preferred the status quo. The company wanted more pay transparency. The next step before telling anybody anything about what their colleagues were making was to do an internal audit of compensation at fog Creek, and we found that we had inequities. I mean, I think any any company that's been around for more than five minutes is going to if they're being honest. And Neil used the data to help and figure out what constituted fair pay. In

the first place. He looked at what people on each team we're making, and then he compared that information for similar positions that he found on sites like pay scale. Using all of that, he decided on a range that made sense for each job title. I was curious to know if, as expected, women had ended up making less than men. Yeah. I think the majority of people that were at the high end of the range or men for sure, But I think the people that weren't the

low end of the range two were also men. So like, it's probably reflecting more the fact that we don't have as good a gender balance as you should to men are over indexed on both the high end low end of the spectrum. He raised the salaries of two people he found out weren't making enough money even before making all the pay data public, But there were also some people he found who were making too much money. Those people got to stay where they were rather than go

for truly radical pay transparency. Bog Creek decided to share just those salary ranges with no names attached, just job titles, and Neil wouldn't tell me what those were exactly, But finally last September he was ready to share them with the rest of the company. At one of their monthly town hall meetings, he gathered everyone together. Some people were actually in the office but others were remote, and he put all the data up on the screen and there

wasn't a mutiny, but not everyone was happy. You know, some stuff we screwed up, Like we have some departments as a small company that are one person, so we listed a salary range for the role of the only person in that department and they're like, okay, well, my salary is basically out there like everybody else is in a team, and it's a range. But they're like, if if this is the only person in this role, everybody knows exactly what I make to within a five thousand

dollar band. Jessica moy was one of the people who didn't have anonymity. I'm the only person in my position, so it's pretty clear, like my this is Jessica's Valerie band, and everyone knows that's my job. And I never had any issue with that, So for me, it wasn't like a thing to process. I was like, this is what I make. Even though Jessica didn't mind that everyone knew her salary, you can see why some people might. Jun Scheffer was also in a range of her own, but

she had a different problem him. I think it was like, some of these ranges are pretty wide, but I would feel more comfortable of bringing in other underrepresented people into the company once I know it's like completely fair and Neil knows he has more work to do. To Jen's point, after the town hall, fog Creek decided to put salary ranges on all of its job postings so that people

know they're getting hired on a level playing field. You can't build trust just by saying trust me and not showing anybody the work, especially in in tech, whereas so many people have come from other companies that weren't treating them right there weren't weren't you know, being fair to them, UM, and so transparency is just the foundation upon which you build a relationship between an employer and a worker that is trusting. And you know, we try to do that

and everything we do. Given how much anil believes in pay transparency, I asked him how transparent he planned to be with his own salary. It was absurd because I said, this is the range that I make the bottom of it. So I like, UM, made a structure for any future CEO. I guess, but I was. I just sort of disclosed my personal salary because I was like, I don't I want to model the thing I want people to feel comfortable doing. Up to now, we've just been trying to

solve the pay gap by looking at the numbers. But there are all kinds of things that happen at the office and at different points in women's careers that make a big difference over time in the amount of money they make. And the biggest thing of all is motherhood. Nothing trash is your earning potential, like having a kid. Men and women start their careers making about the same amount of money, But the pay gap really starts to show up when men and women hit their late twenties.

That is, when employers think women are about to have kids. One study found that the bulk of the pay gap happens between ages twenty six and thirty three for college educated women. And this isn't just because women cut back their hours to pick up slack at home. Mothers make proportionately less than men based on ours worked, research has found. So what if we could do something about that, make sure women could have kids and keep earning as much

money as their male colleagues. Adobe, the San Jose based company that makes design software and also the flash plug in you used to watch videos on the internet, last year announced that they closed their gender pay gap one percent in the US. That's for men and women doing the same jobs, But that still doesn't mean the working environment was perfectly equal, especially for women and men who

have kids. My colleague Ellen Hewitt explains, Caitlin Azzie works at Adobe as a recruiter, but right now she's on maternity leave. So Dylan was born on New Year's Eve, so she squeaked in there. We got the tax right off and everything. So and she was ten pounds six ounces, huge baby. Yeah, we have big babies in our family. Both men and women at Adobe get sixteen weeks of paid paternal or maternal leave, regardless of whether they're the

primary caregiver. Birth Mothers get an additional ten weeks of medical leave. That's compared to less than six weeks at the average private company in the US that offers paid leave for a new child, so already they're doing pretty well. On top of that, the company gives employees the option to take a more flexible work schedule, like when they come back from leave. They call it Adobe Flex Time. This is Ellen Ellen. I met with Caitlin along with

Rosemary Arianta Keiper, who oversees the flex Time program. Here's Caitlin. I'm learning with me in a new mom It's like you can plan for the you know, every single thing,

but nothing really goes to plan. So just having it be you know, maybe I need to work from home a couple of times a month, or you know, three times in this one week, or just having that to me is really really I can see be very helpful when I return back to work, coming back to work after having a child can be really hard, no matter how much time you got from eternity leave, you're just starting to figure out what being a mom is like, or how to juggle caring for the kids you already

have plus the infant you just brought home. Without the flexibility to ease back into full time work, some women might decide to downshift to part time, which drastically limits their earning potential. That usually involves a job switch, and if going back to your old job with a new baby is difficult, finding a new job is much much harder, especially when you factor in the cost of daycare. In the US, lots of women decide that it's just too

much and stay home for good. When Caitlin comes back to work this month, she plans to take a day each week to work from home so she can spend the afternoons with her daughter. Adobe has offered the flex time option for years, but it was only in the last year that they started promote doing it internally and training managers how to talk to their employees about it. For Caitlin, that was a hugely important change. She was already nearing her due date by the time she found

out the option existed. I think, um, before they rolled out this program and the framework was more standardized, I don't necessarily think people first knew that this was an option. I think it gives people, at least me, a little bit more of empowerment to think about what I need first. Before they rolled it out, I just assumed I'd come back full time and you know, you would be a hard couple of weeks and then you just get thrown back in and that's that. And um, that was sort

of my assumption. And so I just don't think people want to ask for for more unless they, you know, unless it's something that they can say, hey, it's a point to a policy or point to something that's more normalized, because I think there is a you know, there is always pressure to be here if you can and things like that. Rosemary knows that pressure well. As the vice

president of Global Rewards for a OBI. She knew that even though the option for a flexible schedule was out there, a lot of people who might benefit from it weren't taking it. Yeah, I think there was the sentiment of not realizing that they could take it. It does seem to give permission and lend itself to the ability to be able to say, look, this is documented somewhere, it's kind of a formal policy. They're promoted. So it does seem to give more permission to individuals to feel like

they can ask for it. You know, oftentimes the type of relationship you have with a manager and kind of the value system or or what they believe is important dictates oftentimes how much they're willing to provide flexibility. And what we realized was in some organizations it happened seamlessly, it wasn't an issue, and in others, um managers weren't as willing um to do it because they felt like they had demands or or weren't sure how they could

um manage the program equitably across the organization. Since making Adobe flex time more of a formal policy less September, Adobe has seen a ten increase in the number of people choosing it. Rosemary says that the more normal a flexible work schedule seems, the less likely it is that people who take advantage of it will be implicitly penalized

for doing so. Because here's what's worrisome right now. Even though both parental leave and flex time are offered to men and women, men are still taking way less time off. What we're seeing is is most men, on average are taking closer to one month. And the feedback that we've got is is is because you know I've got we don't both need to be at home. Is essentially the response that we've gotten, even though they both have the

ability to be at home. The point of encouraging men to use programs like parental leave and flex time isn't just so that women have some help at home, although it's that too. The point is so that women and men share the burden of childcare more equally, including the workplace penalties that come with it. When you miss a may your career opportunity because you're at home taking care of the kids. That can be frustrating. But right now, women still do twice as much of the childcare in

the US. That means that those missed opportunities are falling disproportionately on them. I'd love to see more men start taking the time off right and taking advantage of these programs, because I think that act in itself will also kind of level the paying field. Two parents each with the flexibility to balance work and home life. It does sound

pretty idyllic, It's also good for women's earnings. A study in Sweden found that for each month of paternity leave the father takes, the mother's income rises by an average of seven percent. But in the US, at least, we're a long way from that kind of thing being normal. Only of private sector workers get any paid for rental leave at all. Changing the way we deal with women and men and work isn't something that happens all at once.

Paid discrimination has been illegal since the sixties, but that hasn't stopped companies from paying women less over the years. That's because sexism is a way bigger problem than the pay gap. No one company is going to solve sexism for everyone, but Rosemary is right. The more places where gender equality is the norm, the harder it is for

everyone else to keep treating men and women differently. Next week on The Paycheck, we're going to talk about how individual women are trying to solve the pay gap for themselves. Some are even resorting to motivational chanting. You are not going to want to miss it. Thanks for listening to another episode of The Paycheck. If you like the show, please head on over to Apple Podcasts or wherever you

listen to rate, review, and subscribe. This show was reported by Ellen Hewitt Claire Subteth and hosted and reported by me Rebecca Greenfield. It was edited by Jillian Goodman and produced by Liz Smith. We also had help from Francesca Levie, Janet Paskin, and Magne Henrickson. Our original music is by Leo Sidron, carry Vanderyott did the illustrations on our show page, which you can find at bloomberg dot com Slash the Paycheck. Francesca Levie is Bloomberg's head of Podcasts