Citi shows progress on closing pay gaps

Dive Brief:

Women at Citi are paid on average more than 99% of what men are paid, when job function, level and geography are taken into account. There also is no statistically significant difference in adjusted compensation for US minorities and non-minorities, the company said in a Jan. 15 statement.
When those numbers are unadjusted, however, they fall to 73% (up from 71% last year) and 94% (up from 93%), respectively. "Continuing to reduce our raw pay gap requires that we make progress on our representation goals – to increase representation at the Assistant Vice President through Managing Director levels to at least 40% for women globally and 8% for Black employees in the US by the end of 2021 – which we are committed to doing," Sara Wechter, head of human resources, said in the statement.
To achieve that goal, Wechter said the company will use data to diagnose pain points and areas of opportunity; it also will create increased accountability for representation goals among managers.

Dive Insight:

Two years ago, Citi announced plans to close its gender pay gaps; the company rolled out its 40% representation goal a year later.

The moves came as other large employers announced their intention to end pay disparities based on gender and race. In fact, a 2019 WorldatWork and Korn Ferry study revealed that 60% of employers were actively engaged in similar efforts, and 23% who identified discrepancies were undertaking remediation efforts. Only 7% of respondents said pay equity was not a priority.

Inaction on this front could set back the earning potential of women and nonwhite workers for decades, research shows. According to the IBM Institute for Business study, Women, Leadership, and the Priority Paradox, women won’t gain parity until 2073 unless employers act to eliminate disparities.

The lack of parity gains for women also could have long-term, adverse effects on businesses, according to a 2019 paper published in The Economic Journal. The research found that women in leadership roles can bolster an organization's performance and return on investments.