SMEs gave women smaller raises than men in 2021: survey

The average salary increases given to men this year were nearly double the amounts received by women, a new survey has found.

The survey of more than 4,000 small- and medium-sized businesses by Toronto-based HR software company Humi found the average salary increase women working for small- and medium-sized businesses saw in 2021 was 5.3%, while men received a 10.3% salary increase.

“As scary as this stat is in 2021, the numbers were also pretty bleak in 2020,” said Andrea Bartlett, Humi’s human resources director.

That year, Humi found the average monthly salary for a woman was anywhere from $1,000 to $2,000 less than what men earned and men were about 10.7% more likely to get a boost than women.

In 2021, there was a slight improvement. Men were 4.4% more likely to receive a raise than women, Humi found.

The disparity in pay raises at small- and medium-sized businesses over the last year was the latest pain in a “she-cession” that economists say has left women underpaid, overworked and often shut out of job opportunities.

They’ve warned that droves of women have left the workforce over the course of the pandemic with many attributing their departure to uneven parenting responsibilities, a lack of flexibility in their job and layoffs.

They say the pandemic exacerbated inequality in a labour market already known for paying women 89 cents for every dollar made by a man and long derided for its “motherhood penalty” — a term used to describe the ways women who have children are treated by employers.

About 1.5 million Canadian women lost their jobs in the first two months of the pandemic and 45% of women in the country experienced a decline in hours worked, the Royal Bank of Canada said last July.

“Women have had to scale back their careers,” said Bartlett.

“The loss of women in the workplace this pandemic has created is only exacerbating the pay gap.”

Her report says the difference between how men and women are compensated at small- and medium-sized businesses may be fuelled by corporate power structures, the style in which people negotiate and the lack of women in executive and other leadership roles.

Humi found only 21% of respondents have women in C-suite positions.

“There’s certainly enough information that shows that when women are in leadership positions, it’s not only a more inclusive workplace, but it also does tend to change the trends of compensation distribution and equitable compensation processes between female and male employees,” Bartlett said.

Adding to the problem is the fact that half of the survey respondents say they don’t have equity, diversity and inclusion plans.

This disappointed Bartlett because she sees such plans as being the bare minimum companies can do to promote diversity and she hoped their interest in upping equity would be higher a year after George Floyd, a Black man in Minneapolis, was killed in police custody, bringing global attention to systemic racism.

It also came three years after the birth of the MeToo movement, when women started coming forward with sexual misconduct allegations against powerful men.

“It can be daunting to think about an equity, diversity and inclusion strategy, let alone policy but … it doesn’t mean that companies can’t start small,” Bartlett said.

Once they get into the rhythm of addressing these issues, they can tackle bigger policies that could address equity like parental leave.

Humi found 64% of survey respondents said their company does not offer a maternity and paternity leave policy above the Employment Standards Act requirements.

For companies that provide some sort of top up, almost half are offering just slightly above the act’s requirement, which equates to a salary top up between 10 and 25%.