Oct 15, 2019 9:00 AM

How Salesforce Closed the Pay Gap Between Men and Women

In an excerpt from his new book, CEO Marc Benioff says he initially didn’t believe any gender-based pay disparities were pervasive in the first place.

In March 2015, when Salesforce’s employee success chief, Cindy Robbins, arrived at my home for one of the regular meetings I host with my senior executives, I could tell that something was a little off. Not only did she seem oddly reserved, even a bit anxious, she’d taken the unusual step of bringing backup, namely another senior woman executive, Leyla Seka.

They sat down and got right to the point. They’d come to tell me they suspected that women employees at Salesforce were being paid less than men for the same work.

I’m sure the look on my face betrayed the mix of indignation and astonishment I was feeling. I’ll admit, my defensiveness was welling up. For starters, I’d been working hard at this problem for three solid years. In 2012 I’d begun to notice, with horror, that when I called a meeting, the number of women in the room was often close to zero. I soon discovered that less than 29 percent of Salesforce’s total employees were women, and they made up only 14 percent at the leadership level. To make sure talented female employees were being considered for leadership roles, I’d announced that going forward, at least 30 percent of the participants at any meeting, from a large management session to a small product review, should be women.

Holding equality as a value is not just a matter of fairness or doing the right thing. Nor is it about PR or “optics” or even my own conscience. It’s a crucial part of building a good business, plain and simple. And there is an endless amount of research to prove it. A McKinsey & Company study, for example, showed that companies with more gender diversity on their executive teams were 21 percent more likely to outperform less diverse teams in terms of profitability. And a global survey of more than 20,000 publicly traded companies by the Peterson Institute for International Economics found that the number of women holding executive positions in corporate management correlated with increased profitability.

Back in 2015, I knew we still had a long way to go on this issue, but I was utterly convinced that Salesforce belonged to the tiny minority of tech companies that truly valued gender equality. I simply did not believe that pay disparities could be pervasive. “Impossible,” I told them. “That’s not right. That’s not how we operate.” Cindy leveled her gaze. Then, in the measured tone she’d used to talk me out of wrongheaded positions in the past, she explained that she’d invited Leyla to join her at this meeting because they had both independently arrived at the same concern. “Look, Marc,” Leyla jumped in. “Men at my level are buying expensive Teslas. Maybe it’s just a feeling that men make more than women. But maybe it’s an ugly fact.”

I knew she wasn’t implying that any pay disparities were deliberate. Unequal pay is a stubborn, slippery problem in business, and Cindy had brought studies showing that in 2014, a woman working full-time earned, on average, about 79 percent of what a man did, according to the US Department of Labor. “We can either lead on pay equality or we can follow,” Cindy said. We’re not a company that follows.”

Cindy and Leyla hadn’t come to my house just to rattle my cage. They had a proposal. Why not order an audit to conclusively determine whether men and women were being paid equally? Convinced that the data would be vindicating, I immediately agreed to commission a salary review for all 17,000 Salesforce employees we had at the time.

“Let’s go from top to bottom,” I said, “one person at a time.”

For a brief moment, Cindy looked relieved. Then I saw a flicker of worry creep back onto her face. Before we went ahead, she told me, she wanted to make sure this audit wouldn’t be a hollow exercise. In other words, she wanted me to commit to acting on the results, no matter the price tag; did she have my word that if a wage gap was found, we would close it, immediately?

Upon hearing this, I’ll admit I started thinking like the CEO of a publicly traded company. What if they’re right? I wondered. Could it be a $10 million hit? Or $50 million? I had always thought I was more progressive on gender equality than most male technology executives. Now I was about to get the chance to prove it. “OK, I agree.” I said. “Let’s do this.”

We assembled a cross-functional team and developed a methodology with outside experts that analyzed the entire employee population to determine whether there were unexplained differences in pay.

When the results came back a few months later, they were tough to swallow. Salesforce did have a pay gap; glaring differences were scattered throughout every division, department, and geographical region. The virus, in other words, was everywhere.

I couldn’t help but hang my head. I was disappointed and, frankly, chastened. These problems were so close to home that I’d failed to see them clearly. That day, I informed my board and executive team that Salesforce would soon be incurring some additional expenses.

In all, we found that 6 percent of employees, mostly women, would need their salaries adjusted upward, and the total cost of these adjustments worked out to about $3 million. That’s not a small sum, but given how profoundly appropriate and necessary this was, it seemed like a relative bargain.

In the months that followed, I began to speak out about pay equality—everywhere from a dinner at the Los Angeles home of actress Patricia Arquette to an innovation summit in Tokyo to the White House. So you can imagine my astonishment and, to be honest, embarrassment, when Cindy came to see me again.

One year after conducting our first audit, we’d run the numbers again. Turned out we needed to spend another $3 million adjusting the salaries of employees whose compensation had fallen out of whack since the last audit. “How can this be?” I asked.

It gave me some relief to discover that these figures were largely a consequence of growth. We’d recently gotten about 17 percent bigger after buying two dozen companies, and it turned out that in the process we hadn’t just inherited their technology but their pay practices and culture, too.

Realizing that this had the potential to become a recurring problem, we decided to take more stringent measures. We devised a new set of job codes and standards and applied them to each newly integrated company, to make sure everyone performing similar work was similarly compensated from day one. From there, the Employee Success team began reviewing merit increases, bonuses, stock grants, and promotions to root out disparities there, too.

Equalizing pay wasn’t an easy process, or a cheap one: After our third pay assessment, we’d spent a total of $8.7 million addressing differences in pay based on gender, race, and ethnicity.

But it has already begun to pay off in incalculable ways, and its benefits will continue to accrue for years. Already, our commitment to equality has helped land us the number one spot on Fortune’s list of best companies to work for, as well as the top spot on People magazine’s list of “Companies That Care” two years in a row. And it has contributed to our ability to attract the very best and brightest talent in the country.

Since Cindy and Leyla walked into my office in 2015, I’ve learned a great deal about how a company’s culture can breed inequality in ways small and large. “Unconscious bias” is a big one, and unfortunately it’s also a swamp you can step into even when your intentions are good. And step into it I still sometimes do. During a March 2017 event at Salesforce headquarters, I hosted a session to introduce our new product road map. We were also celebrating Salesforce’s 18th birthday, so my wife, Lynne, came along.

There were to be four speakers, all Salesforce executives. The first three were men, and when I called each one individually to the stage, I shook their hands and thanked them. When the fourth speaker, a woman, came to deliver her remarks, however, I gave her a quick hug.

After the presentation, Lynne pulled me aside. “You didn’t hug the men, so why hug the woman?” she said. “That diminished her; they are all professionals.” She was right, of course. I had treated my female executive differently, and until that moment I had zero awareness of it.

I was learning that unconscious bias shows up in all kinds of ways, especially in industries like tech that have historically been largely male dominated. Ellen Kullman, the former CEO of DuPont and co chair of Paradigm for Parity, once pointed out something that’s both encouraging and, to me, rather daunting. Since men hold the majority of leadership roles in the corporate world, she said, they play a critical role in advocating for women and mentoring them. “Until you level that playing field,” Ellen says, “you’re going to get that same outcome.”

Mentorship is something I’ve always been comfortable with, and I eagerly encouraged Cindy to pilot a mentoring program targeting high-potential women at the company. When the feedback came back, the reaction was unexpected. While the women appreciated the investment being made, they didn’t want to be in a program just for women. These rising stars wanted to be part of a mentoring group for high-potential employees—men and women. So today we have “co-ed” programs in place in both our tech and sales departments.

These missteps have taught me that I have to be more conscious of how I interact with women employees, even when I’m trying to be helpful and more inclusive. Recognizing that I was likely not alone in this, I decided we needed to take measures to proactively address unconscious bias and provide all employees—including top leadership—with the tools needed to drive inclusion in the workforce. So in 2016 we launched a workshop called Cultivating Equality, available at our offices around the world, as well as a Trailhead online learning course on unconscious bias. I don’t believe we should be hiring any woman who applies simply for the sake of meeting a quota. But I do insist we go the extra mile to find those highly qualified candidates who we believe would be the best fit for the role, and strive to take unconscious bias out of the hiring process.

In the end, the most important thing leaders can do to promote equality is to open themselves up, take an honest inventory, listen to people, and never be too proud or defensive to make corrections. There are three mistakes to avoid. First, never convince yourself that you know everything. Second, never refuse to search for the truth. And third, don’t forget that there’s often a strong correlation between your ability to make progress and your willingness to ask others for help.

It took some tinkering to get these policies right, but they eventually became part of the Salesforce firmament. Still, equality is a moving target, and we are well aware that our work is far from finished.

Excerpted from TRAILBLAZER, by Marc Benioff and Monica Langley. Copyright © 2019 by Marc Benioff and Monica Langley. Excerpted by permission of Currency, an imprint of Penguin Random House LLC. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

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