Mind the Gap… Why it pays to address the gender pay balance

16 Sep 2019

Business

The gender pay gap is often misconstrued as an equal pay issue, but paying men and women differently for the same job description or role has, at least on paper, has been unlawful since the Equal Pay Act came into place in 1970.

The gender pay gap is a measure which shows the difference in earnings between men and women. The reason for its existence is actually complex and involves a wide set of societal and cultural issues.

So why does a gender pay gap exist?

Generally, there are many more women than men in lower-paid occupations, and more men tend to operate in lucrative industries, such as engineering, offshore and finance. Women are also more likely to work part-time, which tend to be lower paid jobs on a per hour basis. Of course, it is also a fact that women are far more likely to take a career break, either from having children or caring for relatives. These factors limit women’s career progression; the gender pay gap also widens significantly after women have children.

Research shows that a pay gap between genders also widens with age. Women dominate the entry-level roles (73%) but this drops off the higher up the echelons of business, with women only occupying just 32% of director-level positions. This means there is an acute shortage of women in mid management and senior roles.

The above discrepancy has given rise to a number of “Returner programmes” like Reignite Bootcamp that focuses on helping talented females back into work following a career break, but more on this later.

According to research conducted by the Government Equalities Office, male managers are 40% more likely than women to be promoted into higher-paying roles, and despite the equal pay act, there’s also a big pay gap between men and women in like-for-like roles, and the gap rises with seniority.

Change begins with organisational culture

If companies need an incentive to improve their gender pay gap, they only need to look at research by McKinsey who deduced that organisations with higher gender diversity are 15% more likely to out-perform their industry average.

This is one reason many companies are now keen to engage with programmes like Reginite Bootcamp.  The reality is the value of the female returner market has never been higher. In 2017 the UK became one of the first countries in the world, to introduce mandatory gender pay reporting for all companies operating with 250 employees or more. The above legislation for the first time provided an opportunity for companies to really focus on the root causes of gender pay disparity, with all figures been made available in the public realm.

Larger employers therefore, are becoming more switched on the opportunity of employing female returners, a market that contains a raft of high calibre female professionals, who already have a vast set of professional skills and transferable life experience.

Barriers still to overcome

The UK gender pay gap is now at its lowest level ever – currently at 13.3%, although in the last 12 months there has been little improvement with the rate stagnating. In 1997 though, the gender pay gap was 27.5%, so a drop of a third is of course progress, but there is clearly a long way to go.

There are however, still barriers to progress. Maternity itself, is not necessarily the root cause of progress, as many women are being restricted from progressing through the management ranks because of attitudes and assumptions about motherhood.

Perhaps more alarming is the research that claims 80% of managers have witnessed gender discrimination in their work-place environment in the past 12 months. Cultures in organisations perhaps need to change first, before tackling the greater issues of promotion and pay scales.

To change culture and behaviours, you have to encourage people to engage with the reasons for tackling the gender pay gap in the first place.
Systemic behaviours may need to be challenged and also the perception of a good “role model” needs to be redefined. For instance, a manager, who excels in work but needs to finish early to make their child’s sports day, should be praised for a good work/life balance, rather than being questioned.

Companies also need to promote a more balanced recruitment programme, flexible working and look to retain and develop female managers.
Culturally for the gender pay gap to be minimised, everyone in an organisation should be aware of the progress the company is making in tackling their gender pay gap.
In effect, it is the collective responsibility of the company rather than the decision of a few senior people. After all, what you can measure, you can manage.

With cultural changes and more companies waking up to the vast value of the female returner market, there is a real opportunity for UK companies to not only equalise the gender pay balance but to improve their company in the process.

For more information on hiring through St Helens Chamber contact the Workforce Development Team on 01744 742333 or email workforce@sthelenschamber.com