Closing the gender pay gap with behavioral insights

Achieving gender pay equality is an ongoing challenge for organizations worldwide. While many companies are committed to closing the gender pay gap, traditional methods alone are often insufficient to address the subtle biases that drive inequity. Behavioral insights provide a powerful additional toolkit for tackling this complex issue, helping organizations design systems that naturally promote fairness. In this post we explore evidence-based approaches to improve gender equality in pay, including real-world examples of interventions that have shown measurable success.

Why behavioral insights matter for gender pay equality

Behavioral insights focus on the ways human behavior is shaped by environmental cues, social norms, and mental shortcuts. In the context of workplace equality, behavioral insights can help identify and mitigate the hidden biases in recruitment, promotion, and pay-setting practices that may otherwise go unnoticed. For example, research shows that women are often discouraged from negotiating salaries, overlooked for promotions, and penalized for career breaks due to caregiving. Behavioral science-based interventions can address these patterns by reshaping processes to be more inclusive and transparent, without needing to fundamentally change people’s attitudes or beliefs.

Case Study 1: Increasing female applications by advertising flexible roles

One effective approach to promoting gender pay equity is increasing women’s representation in senior roles. Research shows that women are more likely to apply for positions that offer flexibility, which can support them in balancing work with care-giving responsibilities. However, many organizations do not explicitly mention flexible work options in job advertisements, resulting in a less diverse applicant pool.

In an intervention by Zurich Insurance and John Lewis & Partners, both organizations began advertising senior roles as open to part-time and job-sharing arrangements. This shift acknowledged the demand for flexibility among female candidates and made it explicit that these companies were committed to supporting diverse work arrangements.

This change led to a 19% increase in applications from women for senior roles at Zurich Insurance and a 35% increase at John Lewis & Partners. By making flexible options clear upfront, these companies attracted a broader and more diverse pool of candidates, helping to address the under-representation of women in higher-paying positions.

This intervention worked because it addressed a known barrier that discourages women from applying for senior roles: the lack of flexibility. By explicitly communicating that part-time or job-sharing options were available, the companies removed ambiguity and made it clear that they valued work-life balance for all employees. This approach not only expanded the talent pool but also helped to promote gender equality by facilitating women’s access to senior, higher-paying roles.

Case Study 2: Reducing bias against women returning from career breaks

Another common obstacle to gender pay equality is the bias against women who have taken career breaks, often for caregiving. This bias can lead to lower callback rates, fewer opportunities for advancement, and ultimately a widening of the gender pay gap. Behavioral insights suggest that this issue can be mitigated by changing how experience is presented on resumes and in hiring practices.

In an experiment by The Behavioural Insights Team, employers allowed candidates to list their experience in terms of years rather than specific dates. For example, rather than stating “2016–2020” for a role, candidates could simply list “four years.” This subtle change helped to refocus hiring managers’ attention on the length and relevance of a candidate’s experience, rather than on potential gaps.

This adjustment increased callback rates by 15% for women returning to work after a break to care for children. By emphasizing experience rather than specific dates, the intervention allowed employers to assess candidates based on relevant skills and competencies, reducing the impact of negative stereotypes associated with career breaks.

Listing experience by years rather than dates worked by minimizing attention to career gaps and highlighting the candidate’s relevant skills. This change addressed unconscious bias, ensuring that returners were considered for roles based on their professional qualifications rather than assumptions about their career trajectory. For organizations, this adjustment is a simple, cost-effective way to attract skilled, experienced women back into the workforce, thereby improving gender balance and helping to close the pay gap.

Creating an inclusive environment through behavioral insights

These case studies illustrate how behavioral insights can support gender pay equality by addressing specific barriers in recruitment and hiring processes. By removing biases that disproportionately impact women—such as assumptions around flexibility needs or career breaks—organizations can create a more inclusive and equitable workplace. Below are additional strategies grounded in behavioral science that companies can adopt to drive gender pay equity:

1. Structured interviews for fairer evaluation:

Unstructured interviews can allow unconscious biases to influence decisions, especially when hiring for higher-paying roles. By using structured interviews with standardized questions and scoring systems, companies can ensure that all candidates are evaluated based on the same criteria. This method has been shown to reduce gender disparities in hiring outcomes.

2. Transparent pay bands:

Establishing and publicizing pay bands for roles can help close gender pay gaps by ensuring that salaries are based on objective criteria rather than negotiation outcomes. Women are statistically less likely to negotiate their salaries, and transparent pay bands remove the guesswork, promoting fairer and more consistent pay practices.

3. Encouraging salary negotiations:

Research shows that, unlike their male counterparts, women are often perceived as “difficult” when negotiating their salary. To address this, organizations can clearly indicate in job advertisements that salaries are negotiable and encourage candidates to engage in open discussions about compensation. Studies indicate that this practice can significantly contribute to reducing the initial pay gap between men and women.

Conclusion

Pay equity is not only a matter of social responsibility; it also enhances organizational performance by ensuring that talent is recognized and rewarded. Behavioural insights offer practical solutions for addressing biases that contribute to pay disparities. The experiences of Zurich Insurance, John Lewis & Partners, and The Behavioural Insights Team demonstrate that achieving gender pay equity does not require sweeping changes. Instead, small, evidence-based adjustments to hiring and compensation practices can have a significant impact. By integrating behavioural insights into organizational policies, companies can work towards narrowing the gender pay gap and creating a fairer, more inclusive work environment for all employees.