New research from The Josh Bersin Company, a leading human capital advisory firm, reveals that the gender pay gap in the U.S. persists. Despite ongoing efforts, women continue to earn 15% less than men on average. The study, utilizing data from Visier, projects that full pay equality won’t be achieved until 2048. However, there’s a glimmer of hope: female managers could potentially close the gap in 15 years rather than 25.

This data point is particularly significant, as detailed in the full report, The Surprising Truth about Gender Pay Equity. It reveals a crucial aspect of the pay equity issue for the first time: the gender salary imbalance is not solely due to some organizations hiring more women for traditionally “female” and historically lower-paid jobs. Instead, the report shows that even in managerial positions, women earn about 10% less than their male counterparts for the same roles, and this disparity persists even at the executive level.

The experience of even the best-paid women in the American workforce highlights how endemic the gender pay problem is.

On a positive note, the gender pay gap is narrowing. Over the past six years, women have reduced the gap, from 18% to 15%, a 3 percentage point improvement toward parity with their male counterparts. But between 2017 and 2018 and 2022 to 2023, no progress was made, and no progress has occurred since 2020, when the gap was also at 15%.

The gap between female and male managers is closing faster: it has decreased by 4 percentage points over the past six years, dropping from 14% to 10%, which represents a 29% reduction. However, no progress was made between 2019 and 2021, nor between 2022 and 2023.

As a result, the gender pay gap for female managers remained at 10% in 2023. The Josh Bersin Company highlights that this translates to significantly less economic long-term compensation over a career compared to male counterparts with the same skill set and experiences.

The analysis suggests that the situation is likely to change before 2048 due to two key driving forces.

One driving force is the anticipated global impact of the European Union’s forthcoming 2026 Pay Transparency legislation. This legislation will mandate that EU companies, as well as external companies conducting significant business within the bloc, record and share salary information. They will also be required to take corrective action if their gender pay gap exceeds 5%.

The law includes provisions for compensating victims of pay discrimination and imposes significant fines on employers who violate the rules.

However, a far more compelling reason to address pay equity is the undeniable bottom-line benefits that organizations experience. According to the report, companies that have successfully resolved the gender pay equity issue see substantial improvements in market performance, customer satisfaction, employee experience, and innovation. Notably, true pay equity is 13 times more important for employee retention and satisfaction than pay level alone, according to a previous in-depth study of the company on pay equity.

To derive these insights, the advisory firm collaborated with Visier, utilizing the Visier Community Data dataset, which comprises 1.65 million employee records from 113 large U.S. enterprises. The findings underscore that equal pay for equal work could halve poverty among working women in the United States and inject an additional $482 billion into the economy. These results, argue analysts at The Josh Bersin Company, amplify the significance of March’s first-ever U.S. National Equal Pay Day and should also highlight the contribution of American women in the workforce to next month’s International Equal Pay Day.

Kathi Enderes, SVP Research and global industry analyst at The Josh Bersin Company, says:

“There is a ‘carrot and stick’ approach to achieving gender pay equity for good, and legislation certainly plays a role. But I think the organizations that see that complying with the law is the least important aspect here are the ones that will gain the most, as what matters is the tremendous economic and business gains their companies will gain by putting equity at the heart of not just their DEI work but any business decision.”

Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, says:

“Only 5% of companies currently excel at pay equity, with most still working to meet legal and compliance standards. This gap presents a significant opportunity to foster a more equitable environment, drive innovation, and achieve superior business results. However, if progress doesn’t accelerate, can we as a society afford to wait until 2048 to close the pay equity gap? Particularly given that the number of college-educated women in the workforce has now surpassed that of their male counterparts, such a delay would represent a substantial missed opportunity for the U.S. economy.”

The Surprising Truth about Gender Pay Equity study aims to inform and inspire employers seeking to enhance their payment practices. This research offers actionable insights from companies like Salesforce, TetraPak, and SAP, who are actively addressing the gender pay gap. Additionally, the study includes a comprehensive “Pay Equity Action Guide” to assist organizations in implementing effective strategies.vvvv