The “Real” Gender Pay Gap in FQHCs

If you’re reading this to find an expose’ about how Federally Qualified Health Centers have problems with how they pay male vs. female employees in the same job, you’ve come to the wrong article.  More and more studies across all industries debunk the concept that there is systematic deliberate discrimination in pay, and that certainly seems to hold true in the FQHC world.  That does not mean that FQHCs do not have issues to be concerned with, and actions that should be taken NOW, in anticipation of legislation (or business evolution) that will almost certainly come eventually.  What needs to be addressed, not just from a “moral” point of view, but from a practical business perspective, is ensuring that labor market gender bias is not perpetuated, because it leads to decisions that are not in the best interest of serving our patients.

A very significant finding in our research on compensation practices in FQHCs shows that when all the appropriate factors are controlled for, compensation for female top executives is comparable to, and often exceeds, that of their male counterparts.  In our experience working with FQHC clients across the country, we also find consistently that there is little if any evidence of deliberate gender pay inequity.   However, there is an aspect of gender pay inequity that is deeper, and more structural — the market.  FQHCs that are relying on the labor market alone for establishing their ranges and rates of pay are actually perpetuating this structural inequity, and also engaging in business practices that undermine what should be a strength — the quality of the “entry level” staff.

It is no secret that professions and different “jobs” that are predominantly held by women are frequently paid less than those held predominantly by men.  In a simple gender equity comparison, we look at what individuals in the same jobs make, and conclude that if it is equitable, we don’t have a gender equity problem.   In a real gender equity study, however, we need to look at the value of the jobs themselves, and determine whether our compensation systems provide pay opportunities that are comparable to those job values.  This is when we find that many of the supposedly “reliable” methods of proving we’re being fair in our pay practices fall apart.

In the last twenty years, we’ve found that every one of our clients who had been relying solely on the labor market had been paying employees in “female dominated” jobs less than “male dominated” jobs with comparable value, and certainly paying female dominated jobs less than what their own value systems said they should be paying.  This does not mean that they were discriminating, in fact, by relying on the labor market, they were following the one significant “defense” against gender discrimination that still exists — our findings and recommendations were not based on the idea that they had to change to pay women more, but to provide opportunities to attract more qualified individuals regardless of sex.  Not surprisingly, this has led in all cases to a stronger, more effective workforce, with employees approaching a higher standard of living.  Relying on the labor market alone is better than having no system at all, but honestly, its not a good way to do business.

Years ago, we were all taught to fear the doctrine of “comparable worth” as some sort of feminist propaganda that would doom business.  For twenty years, ElementOne has been advocating the use of internal equity methods that ensure that employees are paid according to the value of their jobs to the organization — which is exactly the tool that comparable worth proponents say they are seeking.  The process is so compelling that it is actually required by law in Canada.  It’s going to be required here eventually, if not through legislation, than through the sheer fact that it works — it ensures the availability of higher quality staff, more effective organizational performance, and true fairness.

If your compensation program is built solely on the market, I can safely guarantee you that it isn’t the best answer to an effective system, or an effective organization.  It’s just easier.  As we all know, the easiest answer is rarely the best.

For more information on internal equity and compensation program design, visit our website at www.elementoneconsulting.com, or contact me by email (ebura@elementoneconsulting.com) or by phone (248-507-4670).