Originally published at adp.com. ADP ranked No. 14 on The Fair360, formerly DiversityInc Top 50 Companies for Diversity list in 2022.
For decades, global trends have shown that women consistently earn less than their male counterparts. And while progress has been made on the pay gap since the Equal Pay Act was signed in 1963, there is evidence that shows the gap still remains. A recent study from the ADP Research Institute shows that women are paid more than 20% less than men.
Some industry-leading organizations are demonstrating their leadership by addressing this important issue. These organizations feel pressure from consumers, shareholders and their own conscience to pay workers fairly. But there’s one important part of the conversation few organizations are having, and that’s how the pay gap is even harder on Latina women.
In discussions about the gender pay gap, the focus tends to be on comparing women to men, but a closer look at the data reveals that an even larger gap exists for women of color, particularly Latina women. According to research from Sheryl Sandberg’s Lean In Institute, it takes Latina women 23 months to catch up to the annual earnings of white men. And on average, Latina women are paid 46% less than white men, and 31% less than white women. Latina women are also paid less than their Asian women counterparts, despite their experience, education level or location.
“There’s a lot of activity and focus now on addressing the pay gaps that impact women across their careers — and of course that includes Latina women,” says Helena Almeida, VP-Managing Counsel at ADP and Chair of ADP’s Adelante business resource group. “While there are different approaches on how to fill the gap, we can all agree that paying Latina women fairly and equally not only benefits Latinas, but also the companies we work for.”
Why Do Latina Women Experience a Larger Pay Gap?
One reason why Latina women experience a bigger pay gap is that they are overrepresented in the lower wage service occupations. According to the American Association of University Women (AAUW), they make up almost one-third of the service industry, where workers are typically paid at the lower end of the hourly pay scale.
However, this isn’t the whole story. The Latina population is also underrepresented in higher-paying positions, making up only 1% of high-paying engineering and computing jobs, as the AAUW notes. Even when they have the same educational credentials as white and Asian women, they are still paid less. These issues are compounded by the discrimination Latina women experience around hiring, opportunities for promotion and access to mentorship.
What Can Your Organization Do About It?
More than ever, it is critical for organizations to create a work environment that is diverse and inclusive. Not only is it the right thing to do, but it can also benefit your organization with greater employee engagement and retention, as well as higher financial returns, according to the World Economic Forum.
Here are four simple but influential steps organizations can take to address the pay gap against all women, especially Latina women:
Conduct a pay audit. Review your payroll data and analyze it by gender and race to identify potential pay gaps, and then work with HR and other executive stakeholders to make a plan to remedy them.
Incorporate staffing data to avoid bias. Approach staffing from a data-driven perspective to eliminate as much unconscious bias as possible. This will also give your hiring managers access to anonymized workforce data and increase their likelihood of identifying and onboarding the right candidates.
Audit your hiring procedures. Every organization should be moving toward more equitable hiring practices. A good first step is to evaluate the performance review process and how your business assigns promotion opportunities to identify and eliminate potential sources of systematic bias.
Circulate the results of your efforts. Be as transparent as possible about what you’re doing to create more equitable hiring and promotion policies. Share insights from these audits and establish specific criteria for your staffing and promotion processes that work to close the gap.
Understanding the Latina pay gap and how it affects your business is a critical part of being a leader in your industry. Organizations striving to build cultures that welcome not just Latina women, but people of all backgrounds, will be better positioned to attract and retain diverse talent and enjoy greater prosperity in business.
