Two factors account for most of the gender pay gap. Here’s what HR can do about them.

It’s well known that full-time working women in the US earn less than their male counterparts, bringing in 83 cents on the dollar, on average.

The gap is even wider when accounting for women in part-time roles, a new report from the McKinsey Global Institute finds, with women earning 27% less than men by the 10th year of their career, or 73 cents on the dollar.

MGI researchers identified two factors that explain most of this pay gap: lost time and differing career trajectories. To mitigate this trend, HR leaders should be transparent with workers about how certain career decisions may affect their salary potential, and focus on creating an organizational culture that promotes internal mobility, a lead author of the report told HR Brew.

Why women’s earnings lag behind men’s. While women switch jobs at a similar frequency to men, they take career breaks more often, and for longer periods of time.

In 2022 women worked 37.8 hours a week, on average; by contrast men averaged 40.6 hours. The MGI analysis found women spent 509 days away from paid work, due to career breaks, contributing to a 14% gap of work experience over 10 years, compared to men.

The study doesn’t explore the reasons women spend more time away from their jobs than men, but from separate data we can glean it’s likely due in part to responsibilities that tend to fall more heavily on the female workforce, such as caregiving. Employed US women with children under six years old devoted 2.15 hours a day to caring for them in 2023, according to the Bureau of Labor Statistics, while men spent 1.58 hours a day doing so, on average.

What’s more, women acquire skills and experiences that put them on different career pathways from men, ultimately translating to lower career earnings, MGI found. When women change jobs, they’re more likely to choose lower-paying roles with less competition and more flexibility. This helps explain why a man who starts his career as a customer service representative might ultimately become a financial manager earning a salary in the top quintile, while a woman who begins in the same role might only advance to a sales floor supervisor role earning a third quintile salary.

“Both men and women end up switching around quite a lot, and in America, the labor market is pretty fluid,” Anu Madgavkar, a partner with MGI, said. “So it’s not that you’re stuck or frozen in your entry level job, but it’s the kind of switches and progression that you do that really does determine your pay.”

Where HR plays a role. There are myriad issues that contribute to the gender pay gap, and HR certainly can’t fix all of them.

Simply being transparent about the tradeoffs that come with certain career moves is a good HR practice. If a firm places a pay premium on jobs with a higher level of competition and less flexibility, “that is important information to employers as well as employees,” Madgavkar said. “The starting point is really to be clear about, what is it that we’re valuing in the job, and why are we paying what we’re paying?”

Employers can work toward creating an “organizational culture that promotes people learning and trying new things,” Madgavkar suggested. Without this type of culture, talent pipelines can get clogged and good employees may fall by the wayside, she said.

Designing upskilling programs that are inclusive in nature is another way to boost female representation in senior roles, Sarah Steinberg, head of global public policy partnerships at LinkedIn, told HR Brew last year. Investing in caregiving resources, such as onsite or subsidized, may help as well.