Are Millennials Closing the Gender Pay Gap? New Insights from the Small Business Employment Watch
A lot has been written about millennials, and not all of it is flattering. The generation born between about 1981 and 1997 has been a popular scapegoat for the decline in chain restaurants, diamond engagement rings, and loyalty to a single employer, among other supposed calamities.
But a special report of the October 2017 Paychex | IHS Markit Small Business Employment Watch uncovered data that might surprise some of the generation’s detractors. Millennials may be closing the gender pay gap.
Why focus on millennials?
There are more millennials working in the U.S. right now than any other generation. And where they work, what they do, and how much they make all provide valuable insights into current and future employees. That’s why it was important for Paychex and IHS to determine specific employment trends for that particular segment of the workforce. And the results were worth it.
A surprise in the employment data
At this year’s HR Tech Conference in Las Vegas, Frank Fiorille, Paychex vice president, risk, compliance, and data analytics; and Jim Diffley, senior director, industry services and consulting group, IHS Economics, presented their findings to an audience of HR professionals and industry analysts.
According to the Paychex | IHS Markit report, The Rise of the Millennial Employee, the national gender pay gap is $6.64 per hour. By anonymously analyzing the payroll data of approximately 350,000 Paychex clients, they found that full-time millennial women earn $20.44 per hour compared to $23.03 per hour for full-time millennial men. That’s a gap of just $2.59.
In other words, the gender pay gap is almost 40 percent smaller among millennials.
Is the pay gap closing?
When Paychex and IHS analyzed the wage growth data, they discovered that millennial men’s wages are growing faster than millennial women’s by a ratio of 6.2 percent to 5.3 percent. This means the pay gap could widen again over time as men’s wages outpace those of their women co-workers.
How HR leaders can address the pay gap
HR is in a powerful position to use the monthly data provided by the Small Business Employment Watch to help their companies make more equitable decisions about employee pay.
As the influence of millennials on the workplace grows alongside the accelerating retirement of baby boomers and generation X, consider focusing your recruiting and retention efforts on this influential generation. How you recruit them and the opportunities you offer could help bring wage growth in line and help further shrink the gender pay gap, while making your company a more attractive career destination.
Tips for recruiting and hiring millennials
Paychex HR professionals offer our clients best practices on important topics around recruiting and hiring employees. Here’s what some of them had to say about attracting, engaging, and growing millennial talent:
“Listen to what millennials are looking for in a workplace. Be transparent and clear in your expectations, too.”
“Don’t rush, but move quickly in the recruitment process. Millennials don’t like to drag out their job decisions.”
“Millennials appreciate goal-oriented feedback that is effective and personalized with a focus on results.”
“Provide millennials with opportunities for development, whether a special project, exposure to other departments, or classes and training outside of the workplace. Provide tangible opportunities that will naturally elevate them to the next level.”
To lead the way, follow the data
Even as your company hires more millennials, employment trends will continue to change. Make sure you have access to the latest workforce analytics and employment data to help ensure that your company stays competitive.
You can start by reading our full report on millennial wages, geographic distribution, and industry preferences. And be sure to subscribe to receive the latest Paychex | IHS Markit Small Business Employment Watch each month. The more you know, the better you can prepare for what’s next in HR.