Women typically lag men in overall representation in the workplace, time off, and pay. A Zenefits study reveals a change in these trends due to COVID-19.
It has been a full year since U.S. businesses have been severely impacted by COVID-19. While national trends and headlines have demonstrated that gender pay gaps and benefits are historically worse for women year after year, new data from Zenefits suggests that during COVID-19 opposite gender inequality trends emerged for many small businesses.
Zenefits utilized its anonymized database of more than 7,000 small and mid-sized businesses nationwide which use the company’s platform to track pay, benefits, and HR essentials like vacation and sick time off.
Here are 3 key areas where Zenefits found that small business women gained traction during the pandemic, bucking national trends from prior years.
COVID-19 Effects on U.S. gender pay gap favors women
The most recent Census Bureau data from 2018 shows women of all races earned, on average, just 82 cents for every $1 earned by men. This calculation is the ratio of median annual earnings for women working full time, year round to those of their male counterparts, and it translates to a gender wage gap of 18 cents.
According to the Center for American Progress, U.S. working women are not expected to reach parity with men’s pay until 2059.
The period of March 2020 – March 2021 was marred by the pandemic. Businesses were forced to make tough choices with furloughs, layoffs, pay decreases and hiring freezes.
The Zenefits SMD data shows that women working in small businesses actually made pay gains during the pandemic.
Zenefits analyzed salary data for the years prior to 2020 and into the pandemic period. Here are some trends that emerged:
- In October of 2019, the gender pay gap was 23.56% – by July 2020, the gap decreased .53% to 23.01%
- The Northeast region holds a small lead nationwide on the lowest pay gap by about .5-1%
- Women in leadership roles (those running departments, leading teams and reporting to the c-suite) continue to make the most strides to shrink the pay gap with a 2% gain since 2020. The gap between their male peers is now down to 15%.
- The overall gap in pay saw a small step forward shrinking a bit from 23.46 to 22.24% from October 2019 to March 2021.
Disparity in pay by Job level
Historically, female workers have gained little ground in promotions. According to a study by McKensie in 2019, women lost ground at the first step up to manager over the previous 6 years. For every 100 men promoted to manager, only 85 women were promoted—and this gap was even larger for some women: only 58 Black women and 71 Latinas were promoted.
As a result, women remained significantly outnumbered in entry-level management at the beginning of 2020—they held just 38 percent of manager-level positions, while men held 62 percent. However, the Zenefits data shows a different emerging story among their small business sample.
Zenefits data shows that women made small gains in promotions and corresponding pay during the pandemic
- As is the case nationally, entry level roles have the smallest gap in pay between the genders at between 4-6%, (sadly we saw that gap grow a bit from 4.7 to 5.7 %).
- That gap blows up at the next career rung with individual contributors moving to almost 30%. We saw that shrink from 29.8% to 27.5 y/y. As women moved into managerial roles, the gap starts to shrink again, to about 19% for new managers, and as noted above, 15% for department heads.
- Unfortunately, there is a whiplash at the C-Suite and women revert to a whopping 25% gap. (That number nudged downward a tiny bit since 2020 but nothing statistically relevant).
Equal Pay Day
Equal Pay Day was developed by the National Committee on Pay Equity (NCPE) in 1996 as a public awareness event to illustrate the gap between men’s and women’s wages. This date symbolizes how far into the year women must work to earn what men earned in the previous year. Because the wage gap is wider for women of color, multiple dates exist corresponding with women belonging to different racial/ethnic groups.
The Equal Pay Day date for this year is March 24, 2021.
This gap, which amounts to a typical loss of $10,086 per year for a working woman—or $403,440 over a 40-year career—means that women have to work 15 months, until April 10, to make what men did in the previous 12-month calendar year.
However, if the current pandemic-related trend continues, Zenefits estimates that the new Equal Pay Day could be as early as February 28th in 2025.
2. Men lead the trend in time off during COVID-19
The uneven expansion of access to paid sick days has been a steady trend. In 2018, 34.2 million (25%) of private-sector workers did not have access to paid sick days. The disparity in access has historically been worse for some types of private-sector workers: 61 percent of part-time workers, 69 percent of workers in the lowest-wage jobs, and 48 percent of service workers may not have access to paid sick days.
Also counter to national reporting, women in small businesses weren’t taking typical amounts of time off to care for themselves or family during the pandemic. Historically, women take 50% more time off than men to care for loved ones.
The Zenefits data shows that men edged out their female counterparts in both sick time off taken and overall PTO every month of 2020.
These time off trends held up pretty consistently regionally as well. Men in the South and Northeast took the most time off, and women in the Western half of the U.S. took the least.
3. Women gained overall workforce representation during the pandemic
Zenefits data shows that overall, women gained a full 2% representation in the workforce. In October 2019, small businesses reported 55% of jobs were held by men, and by March 2021, that had narrowed to 53%.
In other words, the Zenefits SMB data shows that in 2020, Women actually made up 2% more of the total SMB workforce in March 2021 than in March 2020, which is, again, counter to national reports.
In conclusion, despite the continued national news headlines about pervasive gender inequality, there is fresh small business data to suggest that the pandemic may not have been as hard on women’s pay as previously suggested, although women still under-perform in raises, promotions, time off and job loss.
Zenefits examined data across small businesses in their HR platform to analyze in aggregate. Extrapolating data points from the last 18 months, our datasets were able to reveal trends segmented by gender, title, location, and other relevant data points. By comparing the changes in the datasets and comparing them to national data, Zenefits was able to determine disparities and similarities as described above.
Center for American Progress, “Wage Gap by the Numbers,” January 6, 2009, available at https://www.americanprogress.org/issues/women/news/2009/01/06/5460/wage-gap-by-the-numbers/; Valeria Lacarte and Jeff Hayes, “Women’s Median Earnings as a Percent of Men’s 1985-2018 (Full-time, Year-Round Workers) with Projections for Pay Equity, by Race/Ethnicity” (Washington: Institute for Women’s Policy Research, 2019), available at https://iwpr.org/publications/pay-equity-projection-race-ethnicity-2019/