The world’s most trusted human capital advisory firm, The Josh Bersin Company, has released an in-depth analysis of the true state of the progress American women are making in closing the gender pay gap. The findings reveal that, despite longstanding efforts, women continue to earn, on average, 15% less than men. At the current pace, full pay equity is not projected to be achieved until 2048.
The research—produced leveraging data from Visier—indicated that better-paid female managers will still need approximately 15 more years, rather than a full quarter-century, to close the pay gap.
This data point is particularly significant, as detailed in the full report. It reveals a crucial aspect of the pay equity issue for the first time: the gender salary imbalance is not solely due to some organizations hiring more women for traditionally “female” and historically lower-paid jobs. Instead, the report shows that even in managerial positions, women earn about 10% less than their male counterparts for the same roles, and this disparity persists even at the executive level.
The experience of even the best-paid women in the American workforce highlights how endemic the gender pay problem is.
On a positive note, the gender pay gap is narrowing. Over the past six years, women have reduced the gap, from 18% to 15%, a 3-percentage point improvement toward parity with their male counterparts. But between 2017 and 2018 and 2022 to 2023, no progress was made, and no progress has occurred since 2020, when the gap was also at 15%.
The gap between female and male managers is closing faster: it has decreased by 4 percentage points over the past six years, dropping from 14% to 10%, which represents a 29% reduction. However, no progress was made between 2019 and 2021, nor between 2022 and 2023.
As a result, the gender pay gap for female managers remained at 10% in 2023. The Josh Bersin Company highlights that this translates to significantly less economic long-term compensation over a career compared to male counterparts with the same skill set and experiences.
The analysis suggests that the situation is likely to change before 2048 due to two key driving forces.
One driving force is the anticipated global impact of the European Union’s forthcoming 2026 Pay Transparency legislation. This legislation will mandate that EU companies, as well as external companies conducting significant business within the bloc, record and share salary information. They will also be required to take corrective action if their gender pay gap exceeds 5%.
The law includes provisions for compensating victims of pay discrimination and imposes significant fines on employers who violate the rules.
However, a far more compelling reason to address pay equity is the undeniable bottom-line benefits that organizations experience. According to the report, companies that have successfully resolved the gender pay equity issue see substantial improvements in market performance, customer satisfaction, employee experience, and innovation. Notably, true pay equity is 13 times more important for employee retention and satisfaction than pay level alone, according to a previous in-depth study of the company on pay equity.
“Only 5% of companies currently excel at pay equity, with most still working to meet legal and compliance standards. This gap presents a significant opportunity to foster a more equitable environment, drive innovation, and achieve superior business results,” says Josh Bersin, global industry analyst and CEO of The Josh Bersin Company. “However, if progress doesn’t accelerate, can we as a society afford to wait until 2048 to close the pay equity gap? Particularly given that the number of college-educated women in the workforce has now surpassed that of their male counterparts, such a delay would represent a substantial missed opportunity for the U.S. economy.”
