Gender pay gap

Posted on Thursday, May 13, 2021 by Clementina Christopher

Gender pay gap is one of those business terms that feels as if it's been around forever, frustratingly.

It's entered the corporate lexicon as if it's just a thing that has to be accepted now; a fact of business life, like year end or a tax return.

But how did we get to this and more importantly what needs to happen to eradicate the gender pay gap permanently?

The Equality Act 2010 was designed to bridge the unfair gap once and for all. 

It stated that men and women in the same employment performing equal work must receive equal pay, unless any difference in pay can be justified. This is the law and employers must follow it.  Failure to do so can result in an expensive employment tribunal case and of course brand and reputational damage. Occasionally we see the issue exposed and exploding publicly with high profile cases such as the BBC V Samira Ahmed in January 2020.

The equality act set out a series of conditions which must be met for all private and voluntary sector organisations with 250 or more employees.  

These employers need to publish calculations relating to 6 key areas:

  • mean gender pay gap in hourly pay
  • median gender pay gap in hourly pay
  • mean bonus gender pay gap
  • median bonus gender pay gap
  • proportion of males and females receiving a bonus payment
  • proportion of males and females in each pay quartile

Companies with 250 or more employees are now expected by law to publish an annual report into their gender pay gap on both their own website and the government gender pay gap reporting website (link below).

But as you start to investigate further, all sorts of other questions begin to arise around accountability.

Whilst the figures submitted are very transparent, what happens if a company misses its own targets for reducing the gap?  It seems to be common practise to just extend deadlines by a few years but this isn't really tackling the problem.

Where a company has at least been brave enough to publish targets these can also be surprising.  To truly eradicate the pay gap one would assume that the target has to be 50/50 total equality regardless of race or gender.  But targets can sometimes be set much lower, particularly in the areas of bonus payments.  How can this make sense if the goal is true equality?

Debate can rage long and hard as to how the pay gap even originated in the first place.  Fear is an oftcited reason.  Fear of investment in female employees only to see that investment disappear if the woman opts to have children.  There is still a lingering sense that even if a woman returns after maternity leave, she will somehow be less invested, or available for a business.

As more and more men take a period of paternity leave, a different attitude is beginning to emerge.  Many parents return with a completely different perspective, which can actually be a huge benefit to a business in terms of outlook and approach.  Not to mention enhanced soft skills such as patience, empathy and relationship building. 

Another reason often put forward is cultural in origin.  That women are somehow less likely to stand up for themselves in pay negotiations.  The meek, demure stereotype still prevails despite the phenomenal success of high profile CEOs such as Carolyn McCallt, Sheryl Sandberg etc.

A combination of these two factors is also undoubtedly having an effect in terms of legacy.  A Forbes article even as far back as 2012 highlighted there being an anticipated salary gap amongst American MBA students set to graduate.  There is almost a belief that things have always been this way, so that is how it is supposed to be.

But just as huge strides have been made around race and pay, it doesn't always have to be this way for the gender pay gap.

In April 2020 the ONS reported that:

The gender pay gap among all employees was 15.5% in 2020, down from 17.4% in 2019. Perhaps most importantly, the gender pay gap remained close to zero for full-time employees aged under 40 years but was over 10% for older age groups.

Signs of progress for the next generation, but what more can be done?

Familiarise yourself with your company report.  Is there a gender pay gap?  If so, what is the roadmap for equality?

Find out what accountability mechanisms are in place for targets missed etc?

Seek out senior personnel who can champion the equality agenda.

Don't be afraid to whistleblow on malpractice.  

2020 has meant profound seismic shifts in the global economy and business is changing.  The gender pay gap needs to be consigned to history, and people of all sexual orientations need to play their part.

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