No one has a better eye for knowing when and how to disrupt the status quo than VCs, and the gender pay gap needs disrupting. It hasn't budged in 15 years, and top talent, state legislation, and vocal media are clamoring for change.
A recent survey of 500 high-growth executives reveals the path that VCs can champion to evolve the startup landscape. Following are the main takeaways.
Pay equity is a top organizational priority.
The majority (74%) of high-growth executives say pay equity is important and nearly two-thirds (64%) believe pay equity is a top priority at their organization.
But CEOs are unaware that their teams lack resources to address the problem.
CEOs aren’t in tune with the reality that most of their teams (61%) lack adequate resources to address pay equity. In fact, CEOs are 15% more likely to be unaware of this fact than HR leaders.
There are 7 ways VCs can end gender pay disparity by 2027.
No group is better positioned to advance pay equity than CEOs building the future and the ecosystem that supports them. Here are seven best practices that VCs can encourage in their portfolio companies:
- Post pay ranges in job postings (38%). Address pay equity issues off the bat and is becoming more widely required by state-level pay transparency laws.
- Share pay ranges during the interview process (32%). Providing pay ranges upfront reduces information inequity and potentially negates the need for negotiation.
- Document & communicate criteria for bonuses, promotions, and benefits (31%). Help candidates and employees understand how they’re able to grow throughout their time with the company.
- Don’t ask candidates for salary history (28%). Avoid expanding the mistakes of past employers. Basing comp on previous salaries continues unfair pay practices
- Conduct pay audits to spot pay gaps (27%). When it comes to pay equity measures, “set it and forget it” doesn’t work. Periodically assess pay equity to reveal what's working and what needs to change.
- Proactively budget to correct for pay discrepancies (31%). Correcting pay inequities may require budget. Understand market benchmarks to know what’s actually fair.
- Have informal internal discussions (26%). Don’t limit pay conversations to hiring and annual reviews. An open-door policy creates room for inequities to surface instead of fester.
Investors hold the key to change.
Systemic change can only happen when CEOs and their support networks champion institutional change from the top down. And for high-growth leaders looking to meet this moment, access to data and best practice resources is essential and something that they can solve for.
For the most up-to-date research and expert tips to progress pay equity, join OPEN Imperative: a coalition of 100s of other high-growth leaders who are taking action to close the gender pay gap in their organizations by 2027.
Emily Sweet is Entrepreneur in Residence and OPEN Imperative Lead at OpenComp. She writes about topics including pay equity and diversity, equity & inclusion (DEI). A board member of the National Council of Jewish Women, Emily was a 2013 Leadership Greater Chicago Fellow and the 2013 recipient of the Jewish Federation of Chicago’s Samuel A. Goldsmith Award. Connect with her on LinkedIn here.