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Published on: Reward

Addressing the Gender Pay Gap

I recently attended an excellent webinar hosted by The Global Institute for Women’s Leadership on how to push for progress on the UK’s gender pay gap. It covered research about the current state of the gender pay gap and steps businesses should take to address pay inequality. The topic of how to identify and solve pay inequality is one I have worked with for many years, and I found this a very informative webinar from experts in this field.

Should you wish to listen to the webinar yourself you can do so on YouTube. However, if you are pushed for time, I have summarised the key points here.

The Importance of Addressing the Gender Pay Gap

Occasionally there can be some resistance when looking at the issue of gender pay inequality. So why is it important to focus on this area? 

The gender pay gap illustrates the lack of positions of power within the business. It illustrates a lack of female economic empowerment throughout society. The result of the ongoing gender pay gap is women and children living in poverty, pensioner poverty, a lack of financial security & stability and overall it makes women more vulnerable to other insecurities over their lives. Often the cause of the gender pay gap is placed with women, with their choices being highlighted as the cause. But in reality, it is much more systemic than that, and to really have a choice, women need economic security. 

This point is built upon by Jess Phillips – MP Birmingham Yardley & Shadow Minister for Domestic Violence and Safeguarding. She explains that a lot of the discriminations faced by women come from a lack of power, and suggests economic power plays a significant role.

Gender Pay Gap Research by Kings College London

King’s College London carried out research to explore the gender pay gap in the UK as compared with a range of comparable countries. This research suggests that during the pandemic progress in this area has stalled and has had an unequal impact on the economic health of women.

The study looked at 6 countries – the UK, Sweden, Spain, France, South Africa and Australia. Over 80 key stakeholders across government, employers, trade unionists, academics and gender equality advocates. were interviewed alongside analysis of data, legislation and academic literature. 

Each country was ranked using 11 indicators, (not just the headline pay gap) and the UK came joint last using these metrics. The results showed that while the UK performs well in terms of transparency and compliance, the legislation ‘lacks teeth’, in that it focuses more on monitoring the problem than solving it. When looking at the countries that rank higher on the list, such as France and Spain, processes are in place to ensure change is implemented. Spain even goes as far as expecting employers to detail how they intend to solve the pay gap – simply reporting you to have one is not enough.

Following these findings, King’s College London highlighted four key recommendations the UK Government should consider to improve the reporting legislation.

  • Establish a legal obligation to publish action plans
  • Lower the minimum employee threshold which currently sits at 250. In Spain, everyone needs to look into the gender pay gap but only those with over 50 employees need to take action. in South Africa they also consider turnover as well as the number of employees
  • Consider automatic fines for non-submission of pay gap reports. Both France and Spain implement fines, and in France such fines can be up to 1% of turnover
  • Increase the capacity of the Government’s Equality Office and Human Rights Commission to provide better support and guidance and conduct more rigorous monitoring and analysis

Action Plans That Work

An important theme raised by all participants is the importance of having well thought out actionable plans that tackle the issues, and that can be held accountable in review. Ann Francke OBE, CEO of the Chartered Management Institute outlines what she believes to be essential to this process.

In addition to supporting the earlier recommendations, she largely addressed the “ Glass Pyramid”  – where organisations start with an even proportion of men and women at junior/entry-level roles, but the proportion shifts in favour of men as you move through the seniority levels.  Most companies start with 50/50 representation at the junior level, and at best achieve 75/25 M/F by the most senior level.  In my experience, this is the primary driver of almost all gender pay gaps I have personally reviewed. 

Therefore, a key priority to address in almost all action plans is to improve your recruitment, development and promotion practices and ensure you are promoted proportionally.  Ann Franck’s specific recommendations were:

Practical Implementation

  • Sponsorship and mentorship programs. Ensuring that women have advocates and sponsors for when they are not in the room to encourage and support women to move through the ranks
  • Be open to working from home and continue with flexible working. This will allow people to excel and work around the demands of their lives. The traditional working splits can make it more difficult for women. If you are a senior leader, lead by example. Focus on outputs, not hours spent
  • Implement a process of anonymous CVs, so you are only influenced by who is the best fit for the role

Ending Salary History

Felicia Willow,  Fawcett Society Interim CEO, added to these recommendations with a focus on removing salary history from recruitment processes. . Salary history is the process of asking for your current salary when applying for a new role. Often, this is used as a benchmark of what your next salary will be. Because salaries for women are likely to already be lower, it means that using this as a measure for their next salary, rather than experience, performance or skills, simply perpetuates the problem.

Ultimately, when you make your workplace better for women, you make it better for everyone. 

You improve your employee engagement, you improve your culture, you improve your financial results, and you’re creating more opportunities for everybody.