What is the gender pay gap, and how can we bridge it?
By midnight tonight, all companies with 250+ employees must declare their gender pay gap or face investigation by the Equality and Human Rights Commission.
However, it’s one thing to legislate for transparency, but another to delve into the resulting data and build an accurate picture of this nebulous gulf between men and women’s pay. Particularly when the data alone can’t give us all the answers: although we know that the gap is driven partly by a higher proportion of men in senior roles, the Office for National Statistics reports that two thirds of the UK’s gender pay gap is ‘unexplained’.
To be clear, the pay gap is not the same as equal pay. For more than 40 years, it has been a legal requirement that men and women are paid the same for the same work. The pay gap actually refers to the difference in average hourly earnings across the whole organisation. In 2017 the gap among full-time workers was 9.1%, rising to 18.4% when part-time workers are included. Some companies report a smaller divide; others, a substantially larger one.
Businesses can do a lot to address the issue and many are already taking steps. Our clients are starting to ask the hard questions, investigating how career aspirations differ between genders and what can be done to equalise progression. But because it’s impossible to pinpoint a single root cause of the pay gap, there isn’t a quick fix. Change needs to go deeper than simply appointing more women at board level. It’s a wider societal issue that should be tackled at home and in the education system too.
For example, we know that children internalise gender norms very early by mirroring what they see around them, so it follows that the career paths they grow up to pursue are shaped by socialisation. Indeed, a large-scale study from UCL’s Institute of Education found that teenage girls aspired to lower-paid jobs than boys, and both genders leaned towards fields dominated by their own sex, perpetuating inequalities in the workforce. Giving career advice that encourages pupils to stretch their imaginations and aspirations, going beyond gender stereotypes, could counter this.
Gender norms are also borne out in behaviour and mindsets, consciously and unconsciously. Studies cited by Linda Babcock and Sara Laschever in Why Women Don’t Ask: Negotiation and the Gender Divide consistently find that “women are more likely to believe that their circumstances are controlled by others while men are more likely to believe that they can influence their circumstances and opportunities through their own actions”.
The authors list several examples of women who are on lower salaries simply because they didn’t think to ask, instead accepting the salary as though it was “like a price on an item in a store”. Mentoring in colleges, universities and in the workplace can encourage women at the beginning of their careers to speak up on their own behalf, which is especially important if they come from disadvantaged / less privileged social backgrounds.
The ‘motherhood penalty’ from the impact of having children also can’t be ignored. The wage gap for men and women in their twenties is much smaller but begins to diverge after the first child is born. Taking time out and/or entering the part-time workforce after having children takes a heavy toll on career prospects and salary growth. New approaches to flexible working and shared parental leave options will help to create a business culture that encourages work-life balance. But it still won’t make a difference to the pay gap if women are paid proportionally less or miss out on promotion opportunities because they work part-time.
The issues (and solutions) aren’t straightforward, by any means. Everyday sexism, our attitudes to part-time work, the rise of the precariat and how to better incorporate transgender employees into gender pay reporting are just a few related rabbit holes. But the new legislation has already generated timely, lively discussion; hopefully it will also be a catalyst for positive change.
Based on findings from one of the largest studies of employee opinion and experience during the Covid-19 crisis, our latest report reviews how well UK business leaders are measuring up.